author: Branch, Judge.

text:
    A15A0116.
    ETOWAH ENVIRONMENTAL GROUP, LLC v. WALSH et al.
    (774 S.E.2d 220)
   Branch, Judge.

In August 2006, defendant Highstar Capital Fund II, LP (“High-star”) acquired Advanced Disposal Services, Inc. (“ADS”) for $470 million. In a lawsuit later filed against ADS, plaintiff Etowah Environmental Group, LLC (“Etowah”) claimed that ADS had presented Etowah with an artificially low price for Federal Road, a Forsyth County waste management facility owned by ADS and Etowah, and that ADS had thus induced Etowah to forego its right to “tag along” in Highstar’s acquisition of ADS. An arbitration panel later found that ADS had breached its fiduciary duty to Etowah in the context of the ADS acquisition and awarded Etowah approximately $19 million for the value of Federal Road.

In February 2012, after collecting the arbitration award, Etowah brought this action for fraud and other claims, and seeking punitive damages and attorney fees, against Highstar and its principals Michael Walsh and Christopher Beall, as well as Highstar’s subsidiary Adstar Waste Holdings Corporation (“the Highstar defendants”). The Highstar defendants moved for summary judgment on the ground that the issue of the value of Federal Road had already been determined by the arbitration panel such that Etowah was collaterally estopped from raising that issue in its action against the High-star defendants. On appeal from the trial court’s grant of the High-star defendants’ motion, Etowah argues that the issue of the value of its share of Federal Road is not precluded. Etowah also argues that the trial court erred when it granted summary judgment as to Etowah’s claims for other compensatory and punitive damages against Highstar and when it excluded documents produced by Highstar’s consultants as privileged. We conclude that although the trial court did not err when it barred Etowah from relitigating that portion of its fraud claim that would have involved the issue of Federal Road’s value and when it excluded the documents, genuine issues of fact remain as to Etowah’s claim for attorney fees and costs incurred before the arbitration panel in discovering the extent of Highstar’s fraud, and thus as to punitive damages arising from that claim. We therefore affirm in part and reverse in part.

To prevail at summary judgment under OCGA § 9-11-56, the moving party must demonstrate that there is no genuine issue of material fact and that the undisputed facts, viewed in the light most favorable to the nonmoving party, warrant judgment as a matter of law. OCGA § 9-11-56 (c). A defendant may do this by showing the court 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 plaintiff’s case.

Lau’s Corp. v. Haskins, 261 Ga. 491 (405 SE2d 474) (1991).

Thus viewed in favor of Etowah, the record shows that in 2001, Etowah and Advanced Disposal Services, Inc. (“ADS”) agreed to form Federal Road, LLC, which would acquire and operate the Eagle Point landfill in Forsyth County. ****&ADS held a 75% interest in Federal Road, with Etowah owning the remaining 25%. Section 10.6 of Federal Road’s operating agreement provided for Etowah’s “tag-along right” as follows:

(a) In the event a Member elects to transfer ... all or a portion of its [Federal Road] Interest (the “Selling Member”) to an unaffiliated third party ... , all remaining Members (“Non-Selling Members”) shall have the right to cause the Selling Member to effect the transfer of such Non-Selling Members’ respective [Federal Road] Interest to such Third Party at an incremental price and on the same terms and conditions (“the Offer”) as the Selling Members proposes to transfer its [Federal Road] Interest to such Third Party (the “Tag-Along Right”).

Section 10.10 of the operating agreement, entitled “Consent to Merger,” provided in relevant part:

[E]ach Member hereby irrevocably consents to the merger or consolidation by any legal means of [Federal Road] with [ADS] (or its successor) upon (i) the election of [ADS] (or its successor); and (ii) the adoption of a plan of merger or other consolidation by Majority Vote which provides Units of relatively equal value in [ADS] or successor entity in exchange for the [Federal Road] Interest held by each Member.

Section 10.10 also provided that the “unit value” to be used in calculating each Federal Road member’s interest “shall be made in accordance with paragraph 10.9 (b),” which provided in relevant part:

The Unit Value of Units issued by [Federal Road] and the Unit Value of Units issued by [ADS] shall be determined to arrive at the ratio of units in [ADS] exchanged for Units in [Federal Road] pursuant to a Unit Exchange. The Unit Value . . . shall be determined: (i) by agreement by and between each Member of [Federal Road] and [ADS], or (ii)... by an appraiser[, who] shall determine that total fair market value of [Federal Road] and divide that amount by the total Units outstanding and after considering voting rights and applicable discounts and premiums, arrive at the Unit Value of the Units issued by [Federal Road] to such Member to be exchanged for Units in [ADS].

On May 5,2006, Highstar sent ADS’s principal, Charles Appleby, a written offer to buy ADS for $425 million “less the balance of [ADS’s] existing debt,” with Federal Road accounting for at least $62 million of ADS’s value. On May 10, Highstar increased its offer for ADS by $25 million, to $450 million, but decreased the value of Federal Road to between $45.5 million and $47 million. On May 19, Highstar increased its written offer for ADS by another $20 million, to $470 million, but also created a second offer letter, addressed to ADS, that purported to be an offer for Federal Road alone at a price of $45.5 million. According to Etowah, Highstar created the second May 19 letter for the purpose of deceiving Etowah as to the terms of High-star’s offer for ADS, including the value of Federal Road.

On June 12, 2006, Highstar and ADS met in New York to discuss Highstar’s offer. On the following day, ADS met with Etowah and showed its representatives Highstar’s second offer letter (but not its first) as well as an analysis showing how much Etowah would receive were it to “tag along” to the $45.5 million offer for Federal Road. As a result of being shown this letter, and because it felt that the $45.5 million offer for Federal Road was too low, Etowah declined to exercise its tag-along right. A merger plan dated June 30, 2006, provided that Etowah would merge into ADS, with Etowah’s 25% interest in Federal Road to be exchanged for ADS shares.

In August 2006, Highstar acquired ADS for $470 million. On September 21, 2006, Etowah was merged into ADS in accordance with Delaware law. On May 19, 2007, ADS merged Etowah out of its minority ownership of ADS shares. On June 1, 2007, Etowah sued ADS and others, but apparently not the Highstar defendants, in Forsyth County Superior Court for fraud, breach of contract, and other claims arising from Highstar’s acquisition of ADS. On September 26, 2007, Etowah also filed a petition for appraisal in Delaware’s Court of Chancery seeking “a determination of the fair value of its shares of ADS common stock.” In March 2009, this Court affirmed the trial court’s grant of ADS’s motion to compel arbitration in the Forsyth County lawsuit according to the operating agreement’s arbitration clause. Etowah Environmental Group v. Advanced Disposal Svcs., 297 Ga. App. 126,130-131 (1) (676 SE2d 456) (2009). The Forsyth County and Delaware actions were then consolidated in arbitration.

Etowah’s arbitration demand alleged that ADS had breached the operating agreement by “failing] to disclose” its discussions with Highstar as part of a “scheme” to acquire Etowah’s interest in Federal Road for less than its fair value; by merging Federal Road into ADS; and by “forcing” ADS into a “tainted” appraisal process. Etowah also alleged that as a result of this “scheme,” ADS “obtained cash for the entire value of Federal Road, rather than just 75% of it, and then promised Etowah ADS stock, and not cash, resulting in a windfall to ADS,” which received the value of Etowah’s share in cash at the time of the acquisition. The parties soon stipulated, however, that the panel would determine “the value as of [August or September] 2006 ... of Etowah’s 25 percent interest in Federal Road.” (Emphasis supplied.)

On the issue of the “value” of Etowah’s 25% interest in Federal Road, ADS contended to the arbitration panel that Sections 10.9 and 10.10 of the operating agreement provided it with the right to merge Federal Road into ADS and to convert Etowah’s shares of Federal Road into shares of ADS. ADS also asserted that the arbitration panel was required to accept an appraisal, prepared by Houlihan Lokey, opining that Etowah’s share of Federal Road was worth less than $8.6 million. By contrast, Etowah argued that ADS had breached a fiduciary duty when it failed to negotiate in good faith with Etowah in the Highstar transaction. In its closing argument to the arbitration panel, for example, Etowah contended that it should have been informed of ADS’s first May 5, 2006 letter to Highstar, which valued Federal Road at $62 million or more, and that the arbitrators should increase the lost tag-along value of Federal Road to 25% of $72 million, or $18 million.

On July 1, 2010, the arbitrators awarded Etowah over $19 million “as the value for Etowah’s interest in Federal Road.” The panel accepted Etowah’s argument that ADS had breached its fiduciary duty to ensure that the Highstar transaction was “fair to Etowah as to the details of the transaction and the price to be paid to Etowah for its minority interest in Federal Road.” The panel also rejected ADS’s argument that under Section 10.9 (b) of the operating agreement, Etowah was bound by the Houlihan Lokey appraisal. Rather, the panel concluded that under Delaware law, which enables courts to make a minority shareholder whole after a breach of fiduciary duty, an “entire fairness” standard applied, under which Etowah, as a “beneficial owner of ADS shares,” was entitled to a “proportionate share” of ADS. The panel rejected Etowah’s claim under OCGA § 13-6-11 for attorney fees and costs, however, due to its “concern” as to “Etowah’s delay in attempting to circumvent arbitration” as well as the difficulty of distinguishing between Etowah’s bad faith and other claims against the ADS defendants, which the panel found “impossible [to do] in this case.” But the panel also awarded Etowah prejudgment interest, nominal damages, $3.9 million in punitive damages against ADS, and $250,000 in punitive damages against Appleby, for a total award, after set-off, of $26.4 million. Etowah collected the award and filed a notice of satisfaction with the panel.

In February 2012, however, Etowah brought the instant action against the Highstar defendants, alleging that they had participated in the scheme with ADS and Appleby to obtain Etowah’s interest in Federal Road for less than its “true value.” This second action included a claim that Highstar’s principals had intentionally misrepresented Federal Road’s value and that Etowah had reasonably relied on these misrepresentations to its detriment. In August 2012, the trial court denied Highstar’s first motion for summary judgment on the ground that in light of the “limited record” before it, the question whether Etowah was estopped from asserting the issue of Federal Road’s value did not yet have a definitive answer.

In the course of discovery in its action against the Highstar defendants, Etowah produced the testimony of an appraiser, Christopher Mercer, to the effect that because Highstar’s offer to ADS had combined the values of ADS and Federal Road into one price, a determination of Federal Road’s value in the Highstar transaction required an “allocation of value based on economic contribution.” In December 2013, Highstar filed a second motion for summary judgment on grounds including that the issue of the value of Federal Road had been conclusively determined in the arbitration such that Etowah was precluded from raising the issue in its second action. After a hearing, the trial court granted the motion on the ground that the issue of Etowah’s “interest” in Federal Road had been “litigated and determined in the arbitration proceeding.” The court specifically rejected Etowah’s attempt, via Mercer, to “concoct another valuation opinion” by “reverse-engineer[ing] a methodology strikingly similar to that performed by the panel” in order to reach “a value [Mercer] opines should be afforded to Federal Road based on the ADS purchase price.” The trial court also accepted the panel’s finding that fees and expenses were “impossible” to calculate in the case. This appeal followed.

1. In two related assertions of error, Etowah argues that the trial court erred when it concluded that Etowah was precluded from re-litigating the issue of the “actual value” of its interest in Federal Road as a part of its new fraud claim against the Highstar defendants.

As a preliminary matter, we note that these assertions of error raise a question of collateral estoppel, or issue preclusion, and not one of res judicata, or claim preclusion. “The doctrine of res judicata prevents the re-litigation of all claims which have already been adjudicated, or which could have been adjudicated, between identical parties or their privies in identical causes of action.” Body of Christ Overcoming Church of God v. Brinson, 287 Ga. 485, 486 (696 SE2d 667) (2010) (citation and punctuation omitted; emphasis supplied). By contrast,

the related doctrine of collateral estoppel precludes the re-adjudication of an issue that has previously been litigated and adjudicated on the merits in another action between the same parties or their privies. Like res judicata, collateral estoppel requires the identity of the parties or their privies in both actions. However, unlike res judicata, collateral estoppel does not require identity of the claim — so long as the issue was determined in the previous action and there is identity of the parties, that issue may not he re-litigated, even as part of a different claim.

Id. (citation and punctuation omitted; emphasis supplied). Under Georgia law, the doctrines of claim and issue preclusion apply to arbitration proceedings. Bennett v. Cotton, 244 Ga. App. 784, 785 (1) (536 SE2d 802) (2000). A party may therefore be precluded from raising a claim or an issue previously arbitrated “even if some new factual allegations have been made, some new relief has been requested, or a new defendant has been added.” Id. (citation and punctuation omitted). To prevail on a collateral estoppel claim, however, a party “must prove that the contested issues, even though arising out of a different claim, were actually litigated and decided and were necessary to the prior decision.” Boozer v. Higdon, 252 Ga. 276, 278 (1) (313 SE2d 100) (1984) (citations omitted).

Although Etowah asserted a lack of identity between the defendants to its ADS and Highstar actions as a bar to Highstar’s defense of collateral estoppel, the trial court held that as co-conspirators against Etowah, ADS and the Highstar defendants were in privity with each other such that Highstar could assert issue preclusion against Etowah as to the value of its Federal Road shares. Etowah has not challenged this part of the trial court’s ruling on appeal, and we pass no judgment on it here. Rather, Etowah insists that the issue of the “actual purchase price” Etowah should have been offered and should now receive for its share of Federal Road has never been litigated, even if the issue of Federal Road’s “fair market value” was decided by the arbitration panel. We disagree.

No “actual purchase price” can be said to exist for Etowah’s share of Federal Road because Highstar purchased ADS and Federal Road by means of a single offer, which did not allocate the value of Federal Road within that offer. Further, Etowah has always sought to recover the value of its property interest in Federal Road, first lost when Etowah was fraudulently induced to surrender its tag-along rights under Section 10.6 of the operating agreement, and not recouped when it failed to receive an appropriate appraisal for the value of its Federal Road shares. In other words, as the arbitration panel noted at the outset of its ruling, the issue before it was “the value of Etowah’s minority interest in Federal Road as a result of a merger of Federal Road into ADS ... and to decide various tort claims asserted by Etowah against ADS and Mr. Appleby.” By necessity, then, the arbitrators were charged by both parties with deciding the issue of Federal Road’s “value” in the specific factual context of the Highstar acquisition of ADS, including both Etowah’s tortiously induced decision to decline its tag-along right (the subject of the Forsyth County lawsuit against ADS) and its remedy of an appraisal of the value of the ADS shares Etowah should have acquired (the subject of the Delaware action). Whatever evidence may have gone into the calculation of that value, the fact remains that the arbitrators were required, in the end, to determine a specific but hypothetical “value” in compensation for the economic loss Etowah sustained as a result of the undervaluation of its Federal Road shares. As Etowah itself characterized the matter in its post-hearing brief to the arbitration panel: “This dispute is over what proportional value Etowah should be tagging along at.”

In its efforts to overcome its own characterization of the matter, Etowah first points to the expert Christopher Mercer, who testified that the issue of Etowah’s recovery for the value of Federal Road required a “relative allocation of value based on economic contribution.” Mercer explained that this method was “not a completely unusual” means of “providing] a value for a company that has subsidiaries,” and of “allocating] that value between the subsidiaries based upon relative economic contribution.” Mercer also noted, however, that in identifying this valuation method, he was “not talking about a purchase price allocation,” but was rather applying an “interpretation” of the agreement between Highstar and ADS “from business and valuation perspectives,” including a calculation of the “price increment for the relative attractiveness of Federal Road as a part of the [Highstar-ADS] Transaction.”

These contentions are contrary to well-established law that a party “ ‘cannot avoid issue preclusion simply by offering evidence in the second proceeding that could have been admitted, but was not, in the first.’ ” In re Sonus Networks, Inc. Shareholder Derivative Litigation, 422 FSupp.2d 281, 293 (III) (3) (D. Mass. 2006), quoting 18 Moore’s Federal Practice § 132.02 [2] [d] (punctuation omitted); see also Restatement (Second) of Judgments, § 27, comment c (when a party has litigated an “ultimate fact,” and when that issue has been decided, “new evidentiary facts may not be brought forward to obtain a different determination of that ultimate fact”). Etowah proffers Mercer’s testimony without explaining why that testimony could not have been offered in its initial action against ADS. Even with such an explanation, however, the ultimate factual issue of the value of Etowah’s Federal Road shares as a factor in the number of ADS shares it should have acquired has been previously litigated by the parties to the ADS action and decided by the arbitration panel. As a result, Etowah is barred from raising that issue in this second action against Highstar.

In short, Etowah’s acceptance of an award of over $20 million in the wake of the arbitration panel’s decision as to the ultimate issue of Federal Road’s value thus precludes the re-litigation of that issue in its second action, which features a new fraud claim against a new defendant (Highstar) based on a new expert’s admittedly “unusual” methodology for calculating the damages Etowah suffered. The voluminous record before us, including the arguments and decision of the arbitration panel, authorizes the trial court’s factual determination that Etowah was accorded a full and fair opportunity to litigate the issue of Federal Road’s value in its action against ADS, and that the issue of how much Etowah should have received for its share of Federal Road was actually decided in the arbitration. Because the issue of Federal Road’s value “may not be re-litigated, even as part of [Etowah’s new fraud] claim” against Highstar, the trial court did not err when it granted Highstar summary judgment on that issue. Body of Christ Overcoming Church of God, supra, 287 Ga. at 487-488 (affirming grant of summary judgment on the ground of collateral estoppel rather than res judicata when the issue raised in plaintiff’s new action “had been resolved on the merits in prior litigation”); see also Corey v. New York Stock Exchange, 691 F2d 1205, 1213 (II) (6th Cir. 1982) (imposing collateral estoppel to bar plaintiff’s reasserted claims as to an issue already decided in arbitration with another defendant; plaintiff “may not transform what would ordinarily constitute an impermissible collateral attack into a proper independent direct action by changing defendants and altering the relief sought”).

2. Etowah also argues that the trial court erred when it granted summary judgment as to Etowah’s claims against Highstar because the issue of attorney fees and expenses incurred by Etowah due to Highstar’s concealment of its role in the fraud on Etowah was not decided in the arbitration. We agree.

(a) Pointing to the arbitration panel’s denial of Etowah’s request for fees, Highstar argues that the issue of all fees arising from the ADS acquisition was determined in the earlier suit such that Etowah is estopped from seeking them against Highstar. But the doctrine of collateral estoppel precludes only “the re-adjudication of an issue that has previously been litigated and adjudicated on the merits in another action between the same parties or their privies.” Body of Christ, 287 Ga. at 486 (citation and punctuation omitted). Highstar was not a party to Etowah’s suit against ADS and Appleby, and could not have been made a party to the arbitration that followed, even after evidence as to Highstar’s role in deceiving Etowah was discovered. See OCGA §§ 9-9-2 (c) (Georgia Arbitration Code “shall apply to all disputes in which the parties thereto have agreed in writing to arbitrate,” with certain exceptions not applicable here), 9-9-6 (b) (1) (“a party who has not participated in [an] arbitration . . . may apply to stay arbitration” on grounds including that “(1) [n]o valid agreement to submit to arbitration was made”); see also Tillman Park, LLC v. Dabbs-Williams Gen. Contractors, 298 Ga. App. 27, 32 (679 SE2d 67) (2009) (owner of LLC who was not a party to the LLC’s contract with plaintiff could not move to compel arbitration under OCGA § 9-9-6 (a)). Further, the issue of the attorney fees and costs incurred by Etowah investigating Highstar’s role in the fraudulent acquisition of ADS was not actually settled by the arbitration panel, which decided not to award Etowah its fees and costs as against ADS under OCGA § 13-6-11. The panel noted that a decision to award fees under OCGA § 13-6-11 is “discretionary even when there is bad faith”; registered its concern “about Etowah’s delay in attempting to circumvent arbitration”; and noted that any allocation of “expenses between successful and unsuccessful claims asserted and those tainted by bad faith” would be “impossible in this case.”

It is true that Highstar cannot be liable for any damages, including attorney fees, that were not proximately caused by its own conduct in concealing its fraud from Etowah. See Whiteside v. Decker, Hallman, Barber & Briggs, 310 Ga. App. 16, 18-19 (1) (712 SE2d 87) (2011) (“To establish proximate cause, a [tort] plaintiff must show a legally attributable causal connection between the defendant’s conduct and the alleged injury[, and] must introduce evidence which affords a reasonable basis for the conclusion that it is more likely than not that the conduct of the defendant was a cause in fact of the result.”) (citation and punctuation omitted). As a general rule, moreover, “[a]ttorney fees [and expenses of litigation] are recoverable only where authorized by some statutory provision or by contract.” Glynn County Fed. Employees Credit Union v. Peagler, 256 Ga. 342, 344 (3) (348 SE2d 628) (1986) (citation and punctuation omitted).

But this Court has repeatedly recognized an exception to this general rule against the recovery of attorney fees and costs: “ ‘attorney fees and expenses of litigation in an underlying action are recoverable as real damages incurred as the result of defendants’ malfeasance or misfeasance.’ ’’Atlanta Woman’s Club v. Washburne, 215 Ga. App. 201, 202 (1) (450 SE2d 239) (1994) (citations and punctuation omitted; emphasis supplied), quoting Marcoux v. Fields, 195 Ga. App. 573, 574 (1) (394 SE2d 361) (1990).

The effect of this exception is to put a plaintiff in the same position he would have occupied had the plaintiff not been forced to litigate with a third party[, and] permits a plaintiff to recover all losses flowing from a defendant’s alleged misfeasance or malfeasance, except in cases where expenses accrued in the cause of action where recovery is sought.

Atlanta Woman’s Club, 195 Ga. App. at 202 (citationomitted); see also Restatement (Second) of Torts, § 914 (2) (“One who through the tort of another has been required to act in the protection of his interests by bringing or defending an action against a third person is entitled to recover reasonable compensation for loss of time, attorney fees and other expenditures thereby suffered or incurred in the earlier action”).

To avoid summary judgment on its fraud claim against Highstar, then, Etowah needed only to show that it might be able to prove a single dollar of actual damages arising from Highstar’s concealment of its fraud which is not precluded by our holding in Division 1. Zieve v. Hairston, 266 Ga. App. 753, 759 (2) (c) (598 SE2d25) (2004) (a fraud plaintiff must prove that actual damages resulted from the fraud, including any damages “which the law presumes to flow from any tortious act”) (citation and punctuation omitted). Here, Etowah has pointed to some evidence that it incurred a “substantial amount” of attorney fees and costs in arbitration as a result of Highstar’s failure to produce evidence of its role in the negotiations between Etowah and ADS. Because the issue of Highstar’s concealment of its role in the fraud on Etowah was not litigated before the arbitration panel, the decision by the arbitrators not to award Etowah attorney fees as against ADS “is not a bar against the recovery of legal fees and expenses of litigation incurred... as a proximate result” of Highstar’s own tortious conduct. Marcoux, 195 Ga. App. at 576 (authorizing plaintiff to recover attorney fees incurred in plaintiff’s first action on the note of the purchasers of plaintiff’s condominium as damages in a second action against realtors who counseled plaintiff to accept the note).

(b) Because the trial court erred when it granted Highstar summary judgment on the issue of damages incurred by Etowah in the course of discovering Highstar’s participation in its fraudulent acquisition of ADS, the trial court also erred when it concluded that Etowah was not authorized as a matter of law to recover punitive damages pursuant to that claim. Bedsole v. Action Outdoor Advertising JV, 325 Ga. App. 194, 202 (4), n. 28 (750 SE2d 445) (2013) (reversing grant of summary judgment as to claim for punitive damages when grant of summary judgment as to breach of fiduciary duty was also reversed); see also PenneCom B.V. v. Merrill Lynch & Co., 372 F3d 488, 494 (2) (2d Cir. 2004) (plaintiff who prevailed in arbitration with first fraudster may seek punitive damages against second fraudster in a new action; “even if... collateral estoppel bars [plaintiff] from relitigating the amount of its loss against [the second fraudster], such a determination should not necessarily preclude punitive damages” against the second fraudster) (emphasis supplied).

3. Etowah also argues that the trial court erred when it denied Etowah’s motion to compel the production of over 1,800 documents written by or addressed to “consultants” to Highstar on the ground that the documents were protected by the attorney-client privilege. We disagree.

We review a trial court’s decision as to discovery matters, including the application of the attorney-client privilege, only for an abuse of discretion. De Castro v. Durrell, 295 Ga. App. 194, 204-205 (3) (671 SE2d 244) (2008) (trial court did not err in denying motion to compel the production of 77 documents as protected by the attorney-client privilege or not reasonably calculated to lead to admissible evidence).

Although Etowah argued below and repeats on appeal that some of the documents could yield evidence of what Highstar actually paid for Federal Road, Highstar’s counsel submitted affidavits attesting that the documents in question were generated by counsel’s agents in the course of the representation. The trial court held that these documents were privileged because Highstar’s communications to the outside consultants were “sufficiently connected to the provision of legal advice” to render the documents part of a “network of agents and employees of both the attorney and the client” used “to facilitate [Highstar’s] legal representation.” See St. Simons Waterfront, LLC v. Hunter, Maclean, Exley &Dunn, P.C., 293 Ga. 419, 422 (1) (746 SE2d 98) (2013) (“once an attorney-client relationship has been duly established between an attorney and his corporate client, the legal advice confidentially communicated to the authorized agents of the client is by statute protected from discovery”) (citation and punctuation omitted).

Although Etowah asserts that the trial court erred in failing to hold an in camera hearing concerning the documents, it has failed to cite any specific page of the record showing that it requested such a hearing, and has also failed to cite to any part of Highstar’s privilege log, which presumably details the authors and recipients of some of the documents described in counsel’s affidavits. Because Etowah has thus failed to show error by the record as required by Court of Appeals Rule 25 (c) (2), we deem this assertion of error abandoned. See Rice v. Lost Mountain Homeowners Assn., 288 Ga. App. 714, 716-717 (4) (655 SE2d 214) (2007).

Decided July 15, 2015 —

Reconsideration denied July 29, 2015

McGuireWoods, H. WaynePhears, J. Malcolm Cox, for appellant.

King & Spalding, David L. Balser, Lawrence A. Slovensky, Kathleen A Sacks; Bruce P. Brown, for appellees.

Judgment affirmed in part and reversed in part.

Andrews, P. J., concurs. Miller, J., concurs in judgment only.

       Rather than citing to evidence as it may appear in an admittedly “unwieldy 78-volume record of more than 13,000 pages (not including voluminous deposition transcripts), Etowah cites only its own statement of material facts filed below as to some of the events at issue. See Court of Appeals Rule 25 (a) (1) (“Record and transcript citations shall be to the volume or part of the record or transcript and the page numbers that appear on the appellate record or transcript as sent from the trial court.”), (c) (2) (i) (“Each enumerated error shall be supported in the brief by specific reference to the record or transcript. In the absence of such reference, the Court will not search for or consider such enumeration”). We also remind Etowah that “[c]ontentions as to undisputed material facts under [Uniform Superior Court] Rule 6.5... are not evidence for purposes of summary judgment, nor does any lack of response to such contentions amount to an admission of fact.” Southern Gen. Ins. Co. v. Davis, 205 Ga. App. 274, 275 (421 SE2d 780) (1992) (citation omitted); see also Cincinnati Ins. Co. v. Perimeter Tractor & Trailer Repair, Inc., 192 Ga. App. 243, 244 (1) (384 SE2d 449) (1989). We have accepted Etowah’s account of these matters only because Highstar has not controverted that account. See Court of Appeals Rule 25 (b) (1) (“Except as controverted, appellant’s statement of facts may be accepted by this Court as true.”).

       Etowah has not explained why Highstar was not named as a defendant in its lawsuit against ADS, which had apparently become a wholly owned subsidiary of Highstar at the time Etowah filed its first action. Nor can we determine the identity of all the defendants to Etowah’s first complaint because Etowah has failed to provide a citation to that complaint as it appears in the appellate record.

       The arbitrators reached this figure by multiplying Federal Road’s estimated income over the 12 months preceding the merger “by a factor of 9.8,” for a valuation of more than $81 million, minus a deduction for debt, for a total “one-quarter interest in the value of Federal Road” of $19,174,545.

       We can imagine that had Highstar actually purchased Federal Road separately, or purchased ADS with a specific amount allocated to Federal Road, Etowah could conceivably raise the issue of the “actual purchase price” it should have received for its Federal Road shares. This is not the case before us, however.


source: Caselaw Access Project

author: McMlLLIAN, Judge.

license: Public Domain

text:
    A15A0334.
    MARKS et al. v. FLOWERS CROSSING COMMUNITY ASSOCIATION, INC.
    (773 S.E.2d 814)
   McMlLLIAN, Judge.

This appeal arises out of a protracted dispute and ensuing litigation between homeowners’ association Flowers Crossing Community Association, Inc. (the “Association”) and homeowners Elizabeth Marks andH. Edward Marks (singularly referred to as “Edward” and “Elizabeth” and collectively referred to as the “Marks”) in which the Association sought injunctive relief and damages for alleged violations of certain restrictive covenants, recovery of past due homeowners’Association assessments, and attorney fees. The jury subsequently returned a verdict in favor of the Association, and the trial court granted its request for injunctive relief. The Marks filed a motion for new trial, which the trial court denied, and then the present appeal in which they challenge, inter alia, the damages award and the imposition of an injunction. We agree with the Marks that they are entitled to a new trial and, accordingly, vacate the judgment and remand for further proceedings consistent with this opinion.

The record shows that the Marks purchased their home in the Flowers Crossing community in 1996, and that they were aware that they were subject to the restrictive covenants and conditions contained in the Declaration of Covenants, Conditions and Restrictions for Flowers Crossing (“Declaration of Covenants”) at the time they purchased their home. In 2002, the Marks erected a fence enclosing a portion of their back yard without first obtaining approval of the Association’s Board of Directors (“Board”), and in 2003 the Association sent the Marks a letter requesting that they tear down the fence. The Marks refused to comply with the Board’s request, and in May 2003, Edward Marks appeared before the Board to address the issue of the fence. The Board did not approve the fence as constructed, and the Marks quit paying Association dues around that time.

In November 2005, the Marks installed a new garage door. In January 2006, the Marks received a request to appear at the February meeting of the Board, at which time the Board notified the Marks that they had failed to obtain proper approval before they replaced the garage door and that the door needed to be painted to match the trim on the house. The Marks disputed that the architectural standards or any other provision of the Declaration of Covenants required their garage door to exactly match the trim on their house and refused to paint the door, which also remained unchanged and unapproved at the time of trial. In April 2006, the Board, acting through its manager Dean Donald, sent the Marks a letter notifying them they were being assessed fines of $25 per day beginning April 11, 2006 based on their failure to submit an architectural change request form, although the letter did not specify the change for which the form was needed. However, Edward Marks testified that these fines were in addition to the fines which were already being imposed for the fence violation, and Dean Donald testified that it was “logical” that the letter referred to the garage door.

In 2009, the Association filed a complaint against the Marks in the State Court of Gwinnett County seeking to recover past due assessments (“2009 action”). While this action was pending, on March 19, 2010, the Association sent the Marks written notification that they had violated the restrictive covenants contained in the Declarations by: (1) constructing a fence on the property without the proper prior approval and which was not in keeping with the existing standards of the community; (2) installing a new garage door without the proper prior approval and which was, in essence, the wrong color; (3) storing debris, trash cans and other junk on the exterior of the property; (4) failing to maintain the property in a neat and attractive condition including allowing the paint on the exterior of the house to wear; (5) haphazardly maintaining window screens on some, but not all, windows; (6) failing to properly maintain the lawn and prune shrubs and allowing vines to grow around the front of the house; and (7) failing to pressure wash exterior stairs and walkways. The Marks were given 30 days to correct the alleged violations and placed on notice that failure to remedy the violations would result in the imposition of fines of $25 per day per violation.

Edward appeared before the Board to address the violations on April 12, 2010, and the next day the Board notified the Marks that it would begin imposing fines for the violations. On May 7, 2010, the Board sent the Marks another letter, advising them that the failure to correct the violations within 30 days of the March 19, 2010 letter, or by April 19, 2010, had resulted in the imposition of fines in the amounts previously indicated and could result in the initiation of legal action.

Around the same time, the Association filed a motion to amend the 2009 complaint and to transfer the case to superior court. The motion was granted, and the case was transferred to Gwinnett Superior Court in May 2010. After the transfer, the Association struck its original complaint in its entirety and filed an amended and recast complaint reasserting its claim for past due assessments and adding claims for injunctive relief and damages for the alleged covenant violations (“2010 action”).

The Marks answered and filed a counterclaim, asserting, among several other claims, that the Association’s actions toward them were arbitrary and capricious. Apparently, at some point the parties pursued mediation, and in February 2011 the Association voluntarily dismissed its complaint without prejudice; in May 2011, the Marks signed a general release in settlement of all their claims against the Association, which may have arisen before May 11, 2011.

In August 2011, the Association filed another complaint, which was essentially the same as the 2010 complaint, with the exception that the 2011 complaint did not seek damages or injunctive relief based on the installation of the fence (“2011 action”). The 2011 complaint initially was not served on the Marks, but in November 2011, the Marks acknowledged service. On December 19, 2011, the Marks filed their answer and another counterclaim, reasserting their contention that the Association had acted, and continued to act, in an arbitrary and capricious manner and that they were entitled to attorney fees and expenses of litigation under OCGA § 13-6-11.

The Association filed separate motions for summary judgment on its complaint and the Marks’ counterclaim, and the Marks filed a motion for partial summary judgment on some but not all of the covenant violations, and on their counterclaim. In three separate orders, the trial court (1) granted the Association’s motion for summary judgment on the Marks’ counterclaim; (2) denied the Association’s motion with respect to its claims against the Marks; and (3) denied the Marks’ motion for partial summary judgment. The jury subsequently returned a verdict in favor of the Association and awarded $31,325 in damages for fines based on the covenant violations, $5,123.75 for past due assessments, and $41,117.58 in attorney fees. The trial court entered judgment on the verdict and issued a permanent injunction requiring the Marks to remedy all but one of the alleged covenant breaches. Following the denial of their motion for new trial, the Marks filed the present appeal in which they raise multiple evidentiary and legal challenges to the jury’s verdict and the trial court’s grant of injunctive relief; additionally, the Marks assert the trial court erred by granting summary judgment to the Association on their counterclaim.

1. The Marks first challenge the grant of injunctive relief and the imposition of fines for the alleged covenant violations, arguing those claims were either time-barred or without evidentiary support.

(a) The Marks contend the covenant violation claims pertaining to the garage door and window screens were time-barred. We agree.

OCGA § 9-3-29 sets out the statute of limitations applicable to actions for breach of a restrictive covenant. That section provides in relevant part:

(a) All actions for breach of any covenant restricting lands to certain uses shall be brought within two years after the right of action accrues, excepting violations for failure to pay assessments or fees, which shall be governed by subsection (b) of this Code section. . . .
(b) In actions for breach of covenant which accrue as a result of the failure to pay assessments or fees, the action shall be brought within four years after the right of action accrues.
(c) For the purpose of this Code section, the right of action shall accrue immediately upon the violation of the covenant restricting lands to certain uses. . . . This Code section shall not be construed so as to extend any applicable statute of limitations affecting actions in equity.

Id.

As an initial matter, we must determine when the Association first brought their breach of covenant claims for these alleged violations. The Association contends that the limitations period should be calculated using the date of filing of the 2009 complaint, arguing that the 2011 complaint was a renewal of the 2010 complaint, and the 2010 complaint, which was initiated when the case was transferred from state to superior court, was simply a continuation of the 2009 complaint. As more fully set forth below, we reject this contention.

[T]he question of relation back of the amendment turns on fair notice of the same general fact situation from which the claim arises. It is apparent that the strict rule of no relation back of the amendment to the time of filing the original complaint because of the assertion of a new cause of action is no longer applicable unless the causes of the action are not only different but arise out of wholly different facts.

(Citation omitted.) Godwin v. Mizpah Farms, LLLP, 330 Ga. App. 31, 36 (3) (766 SE2d 497) (2014).

Although the 2009 complaint is not part of the record on appeal, it appears undisputed that the only claim asserted in the 2009 complaint was for past due homeowners’ Association assessments, which were unrelated to any alleged covenant violations. Because the claims for damages and injunctive relief based on the various alleged covenant violations asserted both a new cause of action and arose out of entirely different factual circumstances than the claim for past due assessments, there was no relation back to the 2009 action. Thus, even assuming the 2011 action was a renewal of the 2010 action, the Association’s claims would only relate back to when it first asserted the covenant violations in the 2010 action.

The Association also argues the covenant violations at issue were “chronically repeated and continuing,” and under the authority of Marino v. Clary Lakes Homeowners Assn., 322 Ga. App. 839 (747 SE2d 31) (2013) and Black Island Homeowners Assn. v. Marra, 263 Ga. App. 559 (588 SE2d 250) (2003), gave rise to a new cause of action for each alleged violation. This contention is also unavailing. Although the viability of the continuing violation rule set out in Marino and Black Island has recently been drawn into question, see S-D RIRA, LLC v. The Outback Property Owners’ Assn., 330 Ga. App. 442 (765 SE2d 498) (2014), these cases remain good law. Id. at 468 (on motion for reconsideration). And as Presiding Judge Barnes explained in her special concurrence, the continuing violation rule applies only where there are separate and distinct repetitive acts giving rise to the cause of action. Id. at 463-464. Thus, the continuing violation rule does not apply in cases involving fixtures, or where no separate and repetitive act constituting the violation is shown. Id. at 464-465. Rather, in cases not involving separate and distinct violations, “[t]he right of action accrues Immediately upon the violation of the covenant.’ ” (Citation omitted; emphasis in original.) Helmley v. Liberty County, 242 Ga. App. 881, 884 (2) (531 SE2d 756) (2000). In the case at hand, the violations at issue •— specifically the window screens and garage door — were in the nature of fixtures. Moreover, even if they were not, neither violation involved separate, repetitive or distinct acts. Accordingly, the continuing violation rule has no application here.

In light of these determinations, we now turn to the specific issue of whether claims related to the garage door and window screens were time-barred. As set out above, the evidence established that the Marks replaced the garage door in November 2005, the Association gave notice of the alleged covenant violations sometime around January 2006, and Edward Marks appeared before the Board in February 2006 to address the alleged violation. Thus, even under the four-year period which arguably applies to the imposition of any fine for this violation, this claim was time-barred at the time the Association filed its complaint in May 2010.

We come to the same conclusion with respect to the claim based on the mismatched window screens. The undisputed evidence shows that screens were missing from some of the windows when the Marks moved into the house in 1996 and that they last removed a screen from a window in 2005. Although the Association did not provide the Marks with notice of any violations concerning the screens until 2010, as stated above, under OCGA § 9-3-29 (a), the right of action accrued “immediately upon the violation of the covenant.” (Emphasis in original.) Helmley, 242 Ga. App. at 883-884. Accordingly, this claim is also time-barred.

(b) The Marks also challenge the jury’s verdict and grant of an injunction on several of the other remaining claims, arguing that they cured the covenant violations respecting the vines, shrubs, trash and debris by April 12, 2010, and that the Association failed to introduce any evidence to support its claim that the steps and sidewalks were “filthy.” The Association introduced pictures taken around the time of the alleged violations in 2010, and they introduced other pictures that were taken immediately before trial. These pictures demonstrate that the debris and such had been substantially cleared, and that the sidewalks were, even according to the view of a witness for the Association, acceptable. However, pictures at the time of trial did show portions of the house that were either in need of painting or pressure washing, and that the yard was not perfectly maintained and that some overgrowth remained. The jury also heard testimony from Edward Marks that he had remedied the problems in April 2010, but the Board had declined his invitation to come out and view the property at that time. On the other hand, the Board presented evidence that its representative and the Association manager had viewed the property at the time of the violations and during the intervening years, and that the property remained in basically the same condition and the violations remained unremedied. These conflicts were for the jury to resolve, and they did so in favor of the Association to the extent they awarded damages in some amount. Thus, we cannot say this verdict was without evidentiary support.

Nevertheless, we conclude the Marks are entitled to a new trial. The amount the jury awarded for the covenant violations corresponded exactly to the amount of fines that would be authorized for a single violation based on a fine of $25 per day calculated from April 2010 until shortly before trial, which was the example given to the jury by the Association’s attorney during closing argument. However, because the jury entered the award on a general verdict form, we have no way of knowing whether this award was for the time-barred claims or the other claims. Moreover, it also appears the trial court imposed injunctive relief on a time-barred claim, and may have ordered the Marks to remedy certain violations that no longer existed. Accordingly, the portion of the jury’s verdict awarding fines and attorney fees based on the alleged covenant violations must be vacated and a new trial had on these claims. Likewise, the trial court’s order granting injunctive relief must be vacated and a new order conforming to the jury’s verdict must be entered after the retrial. See Atlantic Coast Fed. Credit Union v. Delk, 241 Ga. App. 589, 591-592 (4) (526 SE2d 425) (1999); Crews v. Wahl, 238 Ga. App. 892, 899 (3) (520 SE2d 727) (1999); Bowdish v. Johns Creek Assoc., 200 Ga. App. 93, 97 (5) (406 SE2d 502) (1991).

2. The Marks also contend that the trial court erred by ordering equitable relief because the Association slept on its rights, had unclean hands, acted unfairly and unreasonably and in an arbitrary and capricious manner. Although our holding in Division 1 renders these contentions moot, we note these arguments and defenses may be reasserted upon retrial.

3. The Marks further contend that the trial court erred by submitting the issue of whether the statute of limitations had run and whether the action had been renewed to the jury and by failing to require the jury to make specific findings of fact. However, we have ruled in the Marks’ favor on the statute of limitations defense and the related issue of whether the claims related back, and nothing remains to be retried on those issues. Further, although the Marks did not request a special verdict form or that the jury make specific findings of fact in the first trial, they will be free to do so upon retrial.

4. The Marks also contend that certain evidence admitted at trial was not properly authenticated. Because we cannot predict the evidentiary posture upon retrial, we will not consider this enumeration. However, we point out that this case was tried, and will be retried, under the new Evidence Code, under which the authentication of evidence is governed by OCGA §§ 24-9-901 through 24-9-924.

5. The Marks argue that the trial court erred by granting the Association’s motion to quash their subpoena for production of documents. Although we find no abuse of discretion in the trial court’s decision to quash their subpoena, which requested voluminous documents on the eve of trial, we note the Marks will have the opportunity to reassert their request before the case is retried.

6. Since we have granted a retrial on other grounds, we also need not address the Marks’ assertion that the trial court should have granted a mistrial based upon the intentional misconduct of the Association’s counsel at trial. Moreover, the transcript shows that the trial court sustained the Marks’ objection to the alleged improper character evidence concerning Edward Marks, properly ruling such evidence inadmissible. Thus, we would not anticipate this error to occur upon retrial.

Decided July 15, 2015 —

Reconsideration denied July 29, 2015 —

Wood & Craig, J. Blair Craig, for appellants.

Lazega & Johanson, Panton P. Pou, for appellee.

7. It is necessary, however, for us to address the Marks’ contention that the damages awarded by the jury for past due assessments may have included amounts that were time-barred. We agree that the Association’s evidence on this issue was confusing and may have misled the jury, and that this award should be recalculated by a new jury upon retrial. Because an award for past due assessments in some amounts was clearly proper, only the issue of the amount of the award should be submitted to the jury upon retrial inasmuch as the evidence has established that an award in some amount was proper.

8. Lastly, the Marks contend the trial court erred by granting the Association’s motion for summary judgment on their December 2011 counterclaim. We agree in part. It appears the trial court granted the motion based on the general release and settlement the Marks executed prior to the filing of the August 2011 complaint, finding there had been an accord and satisfaction on all issues set out in the Marks’ counterclaim. However, the general release was specifically limited to claims which occurred on or before May 11, 2011, or which were pleaded or might have been pleaded before that date. Thus, although summary judgment was proper to the extent the Marks’ claims were based on incidents which occurred before the cut-off date stated in the release, to the extent the Marks have asserted claims based on actions the Association took after that date, the order must be reversed.

Judgment affirmed in part, reversed in part, and vacated in part.

Barnes, P. J., and Miller, J., concur.

       Although the Board is the governing body of the Association, unless otherwise noted, we will refer to the Association and the Board interchangeably.

       The dismissal does not appear in the appellate record, and we derive certain procedural facts from the testimony presented at trial.

       As more fully set out in this opinion, the Association withdrew its request for injunctive relief as to the omitted covenant violation.

       We note that this appeal was originally filed in the Supreme Court, but that court transferred the case to this Court on the basis that the “appellants do not challenge the propriety or scope of the equitable relief granted [but ijnstead... argue, in relevant part, that the record did not support a finding of any violation of the covenants and that relief should have been barred by laches or by the appellee’s unclean hands.”

       In this regard the Marks point out that the 2011 action was not styled as a renewal action and that the claims were not identical since the claim based on the installation of a fence was not reasserted in the 2011 complaint.

       The Association withdrew its request for equitable relief based on this claim prior to the time the case was submitted to the jury, and a special interrogatory concerning the garage door was removed from the verdict form. However, because the Association did not withdraw its request for damages, we must still consider whether this claim is time-barred.

       It does not appear that screens were added to any of the windows.

       During closing argument, the Association’s attorney “condensed” the claims to five by joining the claim respecting the sidewalk with the claim respecting the yard maintenance issues.

       Obviously, there would have been changes in these conditions between 2010 and 2013.


author: ANDREWS, Presiding Judge. MILLER, Judge,

text:
    A15A0348.
    GRAVITT et al. v. OLENS.
    (774 S.E.2d 263)
   ANDREWS, Presiding Judge.

Samuel S. Olens, Attorney General of the State of Georgia, brought a civil action in the Forsyth County Superior Court pursuant to OCGA § 50-14-5 of the Open Meetings Act (OMA) (OCGA § 50-14-1 et seq.) seeking to enforce the OMA. The action against the City of Cumming and the City’s mayor, H. Ford Gravitt, individually, alleged negligent violations of the OMA by refusal to allow a member of the public to attend and videotape a meeting of the City Council, and sought the imposition of civil penalties and the award of attorney fees pursuant to the OMA. The trial court: (1) denied the defendants’ motion to dismiss the action on the basis of sovereign and official immunity, and (2) granted summary judgment in favor of the attorney general, ruling that the defendants violated the OMA, and imposing civil penalties and attorney fees against the defendants pursuant to the OMA. The City and Gravitt appeal. For the following reasons, we affirm in part, reverse in part, and remand.

On April 17, 2012, Mayor Gravitt convened a scheduled meeting of the Cumming City Council, and a member of the public, Nydia Tisdale, was in attendance at the meeting with a camera she was using to videotape the meeting. After the meeting was convened, it is undisputed that Gravitt announced that videotaping the meeting was prohibited, and, at Gravitt’s direction, the City’s chief of police removed Tisdale’s camera, and the tripod on which it was mounted, from the meeting area and prevented Tisdale from videotaping the meeting with the camera. According to Gravitt, he did not order that Tisdale be removed from the meeting, and she was not removed from the meeting. A City police officer testified that, at the mayor’s direction, the camera and tripod were moved to the rear of the meeting area, at which point Tisdale left the meeting and appeared to make a cell phone call, and that Tisdale then returned to the meeting and started using a different handheld video camera to record the meeting. The officer said that, without further direction from Gravitt, he approached Tisdale and reminded her that the mayor had asked her not to record the meeting, but that he took no action to stop Tisdale from recording the meeting with the second camera, and that she appeared to continue recording. The City’s chief of police stated that Tisdale initially resisted the removal of her video camera and tripod by shouting at the mayor, and that, because of this resistance, he asked her to step outside the meeting so he could explain the removal to her without disturbing the meeting. According to the chief of police, when he moved Tisdale’s camera to the rear of the room, Tisdale ceased her resistance; that he no longer felt it was necessary at that point to explain the removal to Tisdale outside the meeting; that no one physically touched Tisdale; and that neither he nor anyone else required that Tisdale leave the meeting. Tisdale provided an affidavit in which she testified that Mayor Gravitt ignored her protests that his order to remove her video camera violated the OMA; that the chief of police and his deputy “then forcibly and physically removed both me and my video camera from the auditorium’s meeting area” while Gravitt watched and made no attempt to stop the officers. Tisdale further stated in her affidavit:

[A]fter being forcibly removed from the meeting, I was able to return and observed the remainder of the meeting... [but while doing so] I attempted to photograph and take short film clips (without sound) of the meeting using [another] camera. I did so from the front row of the meeting auditorium and in direct view of Mayor Gravitt as he continued to conduct the meeting. Yet, I was ordered to stop this recording before the meeting ended by [a City police officer]. Mayor Gravitt observed this order, but did not insist that I be permitted to continue recording the meeting on my camera.

It is undisputed that the OMA provided for the City Council meeting to be “open to the public”; that “[t]he public at all times shall be afforded access to meetings declared open to the public”; and that “[v]isual and sound recording during open meetings shall be permitted.” OCGA § 50-14-1 (a), (b), (c). The OMA further provided pursuant to OCGA § 50-14-5 (a):

The superior courts of this state shall have jurisdiction to enforce compliance with the provisions of this chapter... [and that,] [i]n addition to any action that may be brought by any person, firm, corporation, or other entity, the Attorney General shall have authority to bring enforcement actions, either civil or criminal, in his or her discretion as may be appropriate to enforce compliance with this chapter.

Pursuant to this authority, Attorney General Olens brought the present civil enforcement action against the City of Cumming and Mayor Gravitt, individually, alleging that the defendants violated the OMA by prohibiting Tisdale from videotaping the City Council meeting and by removing Tisdale from the meeting. The enforcement action sought the imposition of civil penalties for negligent violation of the terms of the OMA (OCGA § 50-14-6) as well as the award of attorney fees on the basis that the actions taken in violation of the OMA were without substantial justification. OCGA § 50-14-5 (b).

1. We find no merit to the City’s contention that it was entitled to assert sovereign immunity to bar the OMA enforcement action brought by the Attorney General on behalf of the State of Georgia.

“Sovereign immunity applies to municipalities, unless the General Assembly waives it by law. Ga. Const, of 1983, Art. IX, Sec. II, Par. IX.” Godfrey v. Ga. Interlocal Risk Mgmt. Agency, 290 Ga. 211, 214 (719 SE2d 412) (2011); City of Atlanta v. Mitcham, 296 Ga. 576, 577 (769 SE2d 320) (2015); CSX Transp. v. City of Garden City, 277 Ga. 248, 249 (588 SE2d 688) (2003) (“[T]he legislature has the authority to enact a law that specifically waives a municipality’s sovereign immunity.”). For example, in the context of tort liability, OCGA § 36-33-1 (a) provides a narrow waiver of a municipality’s sovereign immunity by the purchase of liability insurance. CSX Transp., 277 Ga. at 249-250; Godfrey, 290 Ga. at 214. Moreover, OCGA § 36-33-1 (b) also provides a limited waiver of sovereign immunity as follows: “Municipal corporations shall not be liable for failure to perform or for errors in performing their legislative or judicial powers. For neglect to perform or improper or unskillful performance of their ministerial duties, they shall be liable.” As currently set forth in OCGA § 36-33-1 (b), “[t]his provision has for more than a century been interpreted to mean that municipal corporations are immune from liability for acts taken in performance of a governmental function but may be liable for the negligent performance of their ministerial duties.” Mitcham, 296 Ga. at 577-578. Because the acts at issue in this case were taken in the course of conducting a City Council meeting, they were acts of a public nature taken in the performance of a governmental function, and, in the absence of a specific waiver of immunity, the City would ordinarily be entitled to assert the bar of sovereign immunity. Nevertheless, we find that, because the City derives its sovereign immunity from the State, the City had no immunity that it could assert to bar an OMA enforcement action brought by the State.

As a municipal corporation, the City of Cumming “is a political division of the State, and is a public corporation, having for its object the administration of a portion of the power of government delegated to it [by the State] for such purpose.” Spence v. Rowell, 213 Ga. 145, 148 (97 SE2d 350) (1957). A municipality “is held to be a portion of the sovereign power of the State” (Penick v. Foster, 129 Ga. 217, 221 (58 SE 773) (1907)), and “in its public character acts as an agency of the State” while exercising governmental functions within its jurisdiction. Hiers v. City of Barwick, 262 Ga. 129, 131 (414 SE2d 647) (1992) (citation and punctuation omitted), abrogation on other grounds recognized by City of Thomaston v. Bridges, 264 Ga. 4 (439 SE2d 906) (1994); Mitcham, 296 Ga. at 579 (while performing governmental duties, municipal corporation exercises powers pertaining to its “delegated sovereignty”). Accordingly, “[t]he [sovereign] immunity of a municipality is derivative from the State,” and may be asserted when the municipality “undertake [s] to perform for the State duties which the State itself might perform, but which have been delegated to the municipality.” Hiers, 262 Ga. at 131. Sovereign immunity as applied to a municipality pursuant to the Georgia Constitution (Ga. Const, of 1983, Art. IX, Sec. II, Par. IX) is not direct or inherent in the municipality, but derives from the State’s delegated sovereignty. Hiers, 262 Ga. at 131; Mitcham, 296 Ga. at 579. It follows that “it would be illogical to allow a municipality sued by the state to assert its [sovereign] immunity against the very source of that immunity.” 18 McQuillin, The Law of Municipal Corporations, § 53:71 (3d ed.); State v. City of Bowling Green, 313 NE2d 409, 411-412 (Ohio 1974) (because municipal immunity derives from the state, and arises when performing governmental function as agent for the state, this prevents municipality from asserting immunity when sued by the state); Bd. of Ed. of Prince George’s County v. Town of Riverdale, 578 A2d 207, 210 (Md. App. 1990) (same). In the present action, the Attorney General, acting on behalf of the State of Georgia, brought a civil action against the City of Cumming to enforce the OMA. We conclude that the City was not entitled to claim that the sovereign immunity it derived from the State barred the State’s OMA enforcement action. This is not a judicially created waiver of the City’s sovereign immunity under these circumstances — sovereign immunity as applied under the Georgia Constitution may be waived only by legislative act or by the Constitution itself. State Dept. of Corrections v. Developers Surety & Indem. Co., 295 Ga. 741, 744 (763 SE2d 868) (2014). Rather, we find as a matter of law that, because the City derives its sovereign immunity from the State, and because the State’s own immunity cannot be asserted against the State, the City had no immunity which could be asserted to bar the State’s enforcement action. Although the trial court relied on other reasoning to find that the City’s sovereign immunity did not bar the action, we affirm the court on this issue under the right for any reason rule. City of Gainesville v. Dodd, 275 Ga. 834 (573 SE2d 369) (2002). In denying the defendants’ motion to dismiss, and in granting summary judgment in favor of the Attorney General, the trial court correctly ruled that sovereign immunity did not bar the OMA enforcement action against the City.

2. Mayor Gravitt contends that the trial court erred by ruling that official immunity did not bar the action brought against him in his individual capacity.

The doctrine of official immunity, also known as qualified immunity, offers public officers and employees limited protection from suit in their personal capacity. Qualified immunity protects individual public agents from personal liability for discretionary actions taken within the scope of their official authority, and done without wilfulness, malice, or corruption. Under Georgia law, a public officer or employee may be personally liable only for ministerial acts negligently performed or acts performed with malice or an intent to injure. The rationale for this immunity is to preserve the public employee’s independence of action without fear of lawsuits and to prevent a review of his or her judgment in hindsight.

Cameron v. Lang, 274 Ga. 122, 123 (549 SE2d 341) (2001) (citations and punctuation omitted). It follows that Gravitt was entitled to official immunity from personal liability for the negligent performance of discretionary acts within the scope of his authority as City mayor; he may be personally liable if he negligently performed a ministerial act, or acted with actual malice or an intent to injure. Id. at 125 (applying official or qualified immunity to city employees under the same standards applied to county employees); see Ga. Const, of 1983, Art. I, Sec. II, Par. IX (d) (applicable to counties). The Attorney General’s civil enforcement action did not allege that Gravitt acted with actual malice or an intent to injure; rather, it sought the imposition of civil penalties under OCGA § 50-14-6* ** on the basis that Gravitt negligently violated the terms of the OMA. Accordingly, the issue is whether the alleged negligent actions involved discretionary or ministerial action.

A ministerial act is commonly one that is simple, absolute, and definite, arising under conditions admitted or proved to exist, and requiring merely the execution of a specific duty. A discretionary act calls for the exercise of personal deliberation and judgment, which in turn entails examining the facts, reaching reasoned conclusions, and acting on them in a way not specifically directed. Procedures or instructions adequate to cause an act to become merely ministerial must be so clear, definite and certain as merely to require the execution of a relatively simple, specific duty.

Banks v. Happoldt, 271 Ga. App. 146, 149 (608 SE2d 741) (2004) (citations and punctuation omitted). “The determination of whether an action is discretionary or ministerial depends on the character of the specific actions complained of, not the general nature of the job, and is to be made on a case-by-case basis.” Davis v. Effingham County Bd. of Commrs., 328 Ga. App. 579, 584-585 (760 SE2d 9) (2014) (citation and punctuation omitted). The mere fact that a complained-of act was simple and definite does not make it ministerial; for an act to be ministerial, “it must be done in the execution of a specific duty.” Roper v. Greenway, 294 Ga. 112, 114 (751 SE2d 351) (2013) (citation and punctuation omitted). For example, “[a] ministerial duty maybe established by evidence such as a written policy, an unwritten policy, a supervisor’s specific directive, or a statute.” Id. at 114-115 (citations and punctuation omitted). But “[procedures or instructions [in a policy or a statutory directive] adequate to cause an act to become merely ministerial must be so clear, definite and certain as merely to require the execution of a relatively simple, specific duty.” Id. at 115 (citation and punctuation omitted); Murphy v. Bajjani, 282 Ga. 197, 199 (647 SE2d 54) (2007).

As set forth in OCGA § 50-14-1 (c), “[t]he public at all times shall be afforded access to meetings declared open to the public pursuant to [the OMA, and] [vjisual and sound recording during open meetings shall be permitted.” We conclude that the actions mandated by this statutory directive are ministerial because it is “so clear, definite and certain as merely to require the execution of a relatively simple, specific duty” in accordance with the OMA. See Roper, 294 Ga. at 115. Moreover, “it is reasonable to expect appellants in the proper performance of their duties to possess sufficient knowledge of the [OMA] so as to enable them to recognize [and comply with these OMA directives].” Hicks v. McGee, 289 Ga. 573, 577, n. 8 (713 SE2d 841) (2011). Accordingly, to the extent Gravitt took action which negligently violated the above directives, his actions were ministerial, and he was not entitled to official immunity. In denying the defendants’ motion to dismiss, and in granting summary judgment in favor of the Attorney General, the trial court correctly ruled that official immunity did not bar the OMA enforcement action brought against Mayor Gravitt, individually.

3. The City of Cumming claims that the trial court erred in finding that the City is a “person” subject to imposition of civil penalties pursuant to OCGA § 50-14-6.

The trial court assessed civil penalties against the City pursuant to OCGA § 50-14-6 of the OMA, which provides:

Any person knowingly and willfully conducting or participating in a meeting in violation of this chapter shall be guilty of a misdemeanor and upon conviction shall be punished by a fine not to exceed $1,000.00. Alternatively, a civil penalty may be imposed by the court in any civil action brought pursuant to this chapter against any person who negligently violates the terms of this chapter in an amount not to exceed $1,000.00 for the first violation. A civil penalty or criminal fine not to exceed $2,500.00 per violation may be imposed for each additional violation that the violator commits within a 12 month period from the date that the first penalty or fine was imposed. It shall be a defense to any criminal action under this Code section that a person has acted in good faith in his or her actions.

It is undisputed that the City of Cumming is a type of corporation — a municipal corporation. Thus, the issue is whether the trial court correctly interpreted the term “person” in the statute to include the City as a municipal corporation.

In the interpretation of all statutes, the courts shall look diligently for the intention of the General Assembly. OCGA § 1-3-1 (a). Legislative intent is determined from consideration of the entire statute; thus we consider a statutory provision not in isolation, but in the context of the other statutory provisions of which it is a part.

Abdel-Samed v. Dailey, 294 Ga. 758, 763 (755 SE2d 805) (2014). The Attorney General argues that the trial court correctly found that the term “person” in OCGA § 50-14-6 includes the City of Cumming as a municipal corporation because: (1) OCGA § 1-2-1 provides that “[t]here are two classes of persons: natural and artificial [and that] [corporations are artificial persons ...” and (2) OCGA § 1-3-3 (14) provides that, “[a]s used in this Code or in any other law of this state, the term ... ‘[p]erson’includes a corporation.” But “[a] corporation is not impliedly within a statutory provision applicable to persons, if it is not within the purpose and intent of such provision, or if an attempt to exclude it otherwise appears.” Ga. R. Bank & Trust Co. v. Liberty Nat. Bank & Trust Co., 180 Ga. 4, 12 (177 SE 803) (1934).

When other provisions of the OMA are considered, it is clear that the legislature did not intend for the term “person” in OCGA § 50-14-6 to include a municipal or any other kind of corporation. The OMA does not define the term “person.” Under OCGA § 50-14-1 (a) (1), the OMA defines the term “agency” as follows:

(a) As used in this chapter, the term:
(1) “Agency” means:
(A) Every state department, agency, board, bureau, office, commission, public corporation, and authority;
(B) Every county, municipal corporation, school district, or other political subdivision of this state;
(C) Every department, agency, board, bureau, office, commission, authority, or similar body of each such county, municipal corporation, or other political subdivision of the state;
(D) Every city, county, regional, or other authority established pursuant to the laws of this state; and
(E) Any nonprofit organization to which there is a direct allocation of tax funds made by the governing body of any agency as defined in this paragraph which constitutes more than 33 1/3 percent of the funds from all sources of such organization; provided, however, that this subparagraph shall not include hospitals, nursing homes, dispensers of pharmaceutical products, or any other type organization, person, or firm furnishing medical or health services to a citizen for which they receive reimbursement from the state whether directly or indirectly; nor shall this term include a subagency or affiliate of such a nonprofit organization from or through which the allocation of tax funds is made.

Thus, OCGA § 50-14-1 defines the term “agency” to include municipal and public corporations and numerous other artificial entities (and regulates the meetings of every agency subject to the OMA), but the statute does not include the term “person” in the definition of “agency.” To accept the argument that OCGA § 1-3-3 (14) compels the conclusion that the term “person” in OCGA § 50-14-6 includes a municipal or other corporation would construe the OMA to apply the criminal fines and civil penalties in OCGA § 50-14-6 to corporations (as persons), but not to the other noncorporate artificial entities included by OCGA § 50-14-1 (a) (1) in the definition of “agency.” Nothing in the OMA supports this interpretation. To the contrary, various sections of the OMb^ show that the term “person” in OCGA § 50-14-6 refers to a natural person or individual and was not intended to include corporations or any other artificial entity. With respect to criminal enforcement actions, OCGA § 50-14-6 sets forth a defense where “a person has acted in good faith in his or her actions.” (Emphasis supplied.) This plainly uses the term “person” to refer to a natural person or individual. The OMA elsewhere distinguishes between “persons” and the artificial entities included in the definition of “agency.” Subsection (a) of OCGA § 50-14-5 provides with respect to jurisdiction to enforce the OMA: “In addition to any action that may be brought by any person, firm, corporation, or other entity, the Attorney General shall have authority to bring enforcement actions. . . .” And subsection (c) of OCGA § 50-14-5 specifically distinguishes the term “person” from artificial entities defined in “agency” by providing: “Any agency or person who provides access to information in good faith reliance on the requirements of this chapter shall not be liable in any action on account of having provided access to such information.”

It follows that, if the legislature had intended for corporations and other artificial entities included in the definition of “agency” to be subject to the fine and penalty provisions of OCGA § 50-14-6, it would have done so by specifically making “any agency” subject to those provisions. Because OCGA § 50-14-6 subjects “any person” to its provisions, and does not specifically subject “any agency” to its provisions, we find that OCGA § 50-14-6 applies only to natural persons. The trial court erred by finding that the City of Cumming is a “person” subject to imposition of civil penalties pursuant to OCGA § 50-14-6. To the extent the trial court assessed civil penalties against the City-pursuant to OCGA § 50-14-6, the court’s summary judgment order is reversed.

4. On the present record, we agree that a question of fact remains precluding summary judgment on the issue of whether Tisdale was removed from the meeting at the direction of Mayor Gravitt. In granting the Attorney General’s motion for summary judgment, the trial court ruled that the defendants negligently violated the OMA provisions requiring that the City Council meeting be open to the public, and that the public be afforded access to the meeting, when “they wrongfully removed [Tisdale] from the meeting____” As set forth above, sworn testimony from Gravitt and City police on this issue conflicted with sworn testimony given by Tisdale.

To prevail at summaryjudgment under OCGA § 9-11-56, the moving party must demonstrate that there is no genuine issue of material fact and that the undisputed facts, viewed in the light most favorable to the nonmoving party, warrant judgment as a matter of law. OCGA § 9-11-56 (c).

Lau’s Corp. v. Haskins, 261 Ga. 491, 491 (405 SE2d 474) (1991). Construing the record in favor of the defendants, we conclude that a disputed factual issue remains on whether Tisdale was removed from the meeting at the direction of Mayor Gravitt. Id. The trial court’s grant of summary judgment in favor of the Attorney General on this alleged violation, and the use of this violation as a basis for imposition of a civil penalty, is reversed.

5. Mayor Gravitt, individually, contends that the trial court erred by assessing civil penalties against him in excess of those permitted under OCGA § 50-14-6.

Under OCGA § 50-14-6,

[a]ny person knowingly and willfully conducting or participating in a meeting in violation of this chapter shall be guilty of a misdemeanor and upon conviction shall be punished by a fine not to exceed $1,000.00. Alternatively, a civil penalty may be imposed by the court in any civil action brought pursuant to this chapter against any person who negligently violates the terms of this chapter in an amount not to exceed $1,000.00 for the first violation. A civil penalty or criminal fine not to exceed $2,500.00 per violation may be imposed for each additional violation that the violator commits within a 12 month period from the date that the first penalty or fine was imposed. . . .

In its order granting summary judgment in favor of the Attorney General, the trial court ruled that the City and Gravitt negligently violated the OMA “on three separate occasions” at the same City Council meeting on April 17, 2012 — (1) by preventing Tisdale from videotaping the meeting with a camera when the meeting convened; (2) by physically removing Tisdale from the meeting when the meeting convened; and (3) by again preventing Tisdale from videotaping the same meeting with a different camera when she was present during the meeting at a later time. Pursuant to OCGA § 50-14-6, the trial court imposed the following civil penalties in its summary judgment order: (a) against the City — a $1,000 penalty for violation (1); a $2,500 penalty for violation (2); and a $2,500 penalty for violation (3); and (b) against Gravitt, individually — a $1,000 penalty for violation (1), a $2,500 penalty for violation (2), and a $2,500 penalty for violation (3).

As we held in Division 3, supra, the City is not a “person” under OCGA § 50-14-6 and is not subject to any civil penalty (or criminal fine) under this Code section for violation of the OMA. By contrast, as set forth above, OCGA § 50-14-6 subjects “any person” to alternative criminal or civil punishment for violation of the OMA, as follows: a misdemeanor criminal fine not to exceed $1,000 upon conviction of any person for “knowingly and willfully conducting or participating in a meeting in violation of this chapter,” or, “[alternatively, a civil penalty may be imposed by the court in any civil action brought pursuant to this chapter against any person who negligently violates the terms of this chapter in an amount not to exceed $1,000.00 for the first violation.” Furthermore, OCGA § 50-14-6 provides: “A civil penalty or criminal fine not to exceed $2,500.00 per violation may be imposed for each additional violation that the violator commits within a 12 month period from the date that the first penalty or fine was imposed.”

Gravitt does not claim that the $1,000 civil penalty imposed against him for violation (1) exceeded the penalties authorized under OCGA § 50-14-6. He claims that the $2,500 penalty imposed for violation (2), and the $2,500 penalty imposed for violation (3), exceeded the penalties authorized by OCGA § 50-14-6. We agree. Penalties not to exceed $2,500 per violation are authorized under OCGA § 50-14-6 for each additional violation “committed] within a 12 month period from the date that the first penalty or fine was imposed.” This plainly refers to additional violations committed within 12 months after the first penalty or fine imposed for a violation. All of the violations (or alleged violations) in this case were committed at the meeting on April 17, 2012, and the first penalty imposed against Gravitt for a violation was imposed in the trial court’s summary judgment order. None of the violations (or alleged violations) for which the trial court imposed a $2,500 penalty in the summary judgment order were committed by Gravitt within a 12-month period from the date that the first penalty was imposed. Under the plain language of OCGA § 50-14-6, we conclude that the trial court was not authorized to impose a civil penalty against Gravitt in excess of “$1,000.00 for the first violation” of the OMA at the meeting. Accordingly, as to the civil penalties imposed on summary judgment by the trial court against Gravitt, individually, for violations (1), (2), and (3), we affirm the imposition of a $1,000 penalty for violation of the OMA at the meeting, and we reverse the imposition of the additional $5,000 in civil penalties.

6. We find no error in the trial court’s ruling that the Attorney General was entitled to reasonable attorney fees and litigation costs incurred in bringing the enforcement action.

Under OCGA § 50-14-5 (b) of the OMA,

[i]n any action brought to enforce the provisions of this chapter in which the court determines that an agency acted without substantial justification in not complying with this chapter, the court shall, unless it finds that special circumstances exist, assess in favor of the complaining party reasonable attorney’s fees and other litigation costs reasonably incurred. Whether the position of the complaining party was substantially justified shall be determined on the basis of the record as a whole which is made in the proceeding for which fees and other expenses are sought.

As set forth in Division 5, supra, the defendants do not dispute the trial court’s ruling on summary judgment that they negligently violated the OMA by preventing Tisdale from videotaping the City Council meeting with a camera when the meeting convened, and by again preventing Tisdale from videotaping the same meeting with a different camera when she was present during the meeting at a later time. The trial court expressly ruled that there was no substantial justification for these violations of the OMA. We apply a “clearly erroneous” standard of review to a trial court’s determination that there was no substantial justification for violations of the OMA. Evans County Bd. of Commrs. v. Claxton Enterprise, 255 Ga. App. 656, 658 (566 SE2d 399) (2002). We find no clear error and affirm this ruling.

Having found substantial justification for the award of fees and costs, “[t]he court may reduce or eliminate the award completely, however, upon a finding of special circumstances that would, in the exercise of the court’s discretion, justify such a decision.” Evans County, 255 Ga. App. at 657. In the present case, the trial court ruled that the Attorney General was entitled to reasonable attorney fees and costs, and that the amount to be awarded was to be determined at a subsequent hearing. Accordingly, on remand to determine remaining issues and the amount to be awarded for trial or appellate litigation, the court shall consider any special circumstances (including any considered in this opinion) which may affect the award. Id. at 658-659.

Decided July 16, 2015 —

Reconsideration denied July 29, 2015 —

Miles Patterson Hansford Tallant, Kevin J. Tallant, Lauren C. Giles, for appellants.

Judgment affirmed in part and reversed in part, and case remanded.

Miller, J., concurs specially. Branch, J., concurs in Divisions 2, 4, 5 and 6, and in the judgment.

MILLER, Judge,

concurring specially.

Although I concur with the result reached by the majority in this case, I write separately, because I do not agree with all that is said in Division 1. It was not necessary for the majority to apply the right for any reason rule in order to affirm the denial of the City’s motion to dismiss, because the trial court properly ruled below that the legislature expressly waived sovereign immunity by enacting the OMA. OCGA § 50-14-5 (a); Ga. Const, of 1983, Art. IX, Sec. II, Par. IX (General Assembly may expressly waive sovereign immunity by law).

It is important to note that the plain language of the OMA specifically provides that the Attorney General has the authority under the statute to bring an action to enforce the OMA. This is an important duty and essential purpose conveyed on the Attorney General by the legislature in order to maintain open meetings in the interest of the general public. Since the statute expressly allows the Attorney General to bring this action, I would affirm the denial of the City’s motion to dismiss.

Samuel S. Olens, Attorney General, Dennis R. Dunn, Deputy Attorney General, Russell D. Willard, Senior Assistant Attorney General, Jennifer Colangelo, Assistant Attorney General, for appellee.

       The action also named Gravitt as a defendant in his official capacity as mayor of the City. The suit against Gravitt in his official capacity as the City’s mayor asserted an action against the City. Cameron v. Lang, 274 Ga. 122, 126 (549 SE2d 341) (2001).

       A “municipal corporation shall not waive its immunity by the purchase of liability insurance, except as provided in Code Section 33-24-51 or 36-92-2, or unless the policy of insurance issued covers an occurrence for which the defense of sovereign immunity is available, and then only to the extent of the limits of such insurance policy.” OCGA § 36-33-1 (a).

       Even assuming that the City possessed sovereign immunity which it could assert against the State, we find that this immunity was waived by the legislature’s enactment of the OMA, which specifically gave the Attorney General the right to bring the present enforcement action. OCGA § 50-14-5 (a); Colon v. Fulton County, 294 Ga. 93, 95-96 (751 SE2d 307) (2013) (finding waiver of sovereign immunity where, by the enactment of the whistleblower statute at OCGA § 45-1-4, the legislature specifically created a right of action, and entitlement to damages, against a governmental entity that would have otherwise been barred by sovereign immunity); Ga. Const, of 1983, Art. IX, Seo. II, Par. IX (“The General Assembly may waive the immunity of counties, municipalities, and school districts by law.”); CSXTransp., 277 Ga. at 249.

       “[T]he natural and reasonable reading of OCGA § 50-14-6 is that the General Assembly recognized that decisions to comply, or not, with the [OMA] are made by individuals, or ‘persons,’ who are held accountable by the provisions of that Code section.” Lue v. Eady, 297 Ga. 321, 332 (773 SE2d 679) (2015).

       Even if Gravitt intended to do the acts at issue, to remove official immunity based on actual malice or an intent to injure requires more than the intent to do an act which caused an alleged injury. Kidd v. Coates, 271 Ga. 33 (518 SE2d 124) (1999). “[I]n the context of official immunity, actual malice requires a deliberate intention to do wrong” that is consistent with a “deliberate or premeditated design to inflict injury.” Adams v. Hazelwood, 271 Ga. 414, 414-415 (520 SE2d 896) (1999) (citation and punctuation omitted). Merely harboring ill will or having bad feelings about the person at issue is not sufficient. Id. at 415. No evidence in the record shows that Gravitt acted with actual malice or an intent to injure.

       This Court may affirm the judgment of the lower court, even if it is based on erroneous reason, so long as it is right for any reason. See Nat. Tax Funding v. Harpagon Co., 277 Ga. 41, 45 (4) (586 SE2d 235) (2003).


author: MCFADDEN, Judge.

text:
    A15A0357.
    CIRAS, LLC v. HYDRAJET TECHNOLOGY, LLC et al.
    (773 S.E.2d 800)
   MCFADDEN, Judge.

This appeal challenges the trial court’s exclusion of business records at a bench trial. Because the trial court abused its discretion in excluding the evidence, we reverse and remand for reconsideration in light of the admissible evidence.

Ciras, LLC filed suit for breach of a promissory note and corresponding personal guaranties against Hydrajet Technology, LLC, Mark Alexander, Abdel Shehadeh and Nabil Mansour. Ciras moved for summary judgment, alleging that the note in the principal amount of $750,000 and the personal guaranties had originally been executed in favor of Wachovia Bank, that Hydrajet defaulted on the note, that Wachovia assigned all of its rights and interests in the loan to Ciras, that after the assignment Hydrajet made four payments to Ciras, and that Hydrajet and the guarantors then failed to make any further payments to satisfy the debt. The trial court granted summary judgment to Ciras as to the liability of all defendants. Thereafter, a non-jury trial was held solely on the issue of damages.

At trial, Ciras sought to prove damages by offering the affidavit of Margie Flight to authenticate the Wachovia bank records for the Hydrajet loan account. In her affidavit, Flight stated that she is a senior vice president and loan adjustment manager with Wells Fargo and Company; that in performing her duties she is familiar with Wells Fargo’s loan accounting and record-keeping methods; that Wells Fargo acquired Wachovia in October 2008; that as part of that acquisition Wells Fargo acquired various accounts from Wachovia, including the Hydrajet loan account; that the documents attached to her affidavit as an exhibit are true and correct copies of the Hydrajet account obtained by Wells Fargo from Wachovia in the regular course of business as part of the acquisition; that Wells Fargo routinely relies on and integrates such records into its own files; and that the attached loan documents accurately reflect the payment and transaction history of the Hydrajet account.

In the last paragraph of her affidavit, Flight further averred not only that she is familiar with Wells Fargo’s record-keeping, but also that she is familiar with the manner in which Wachovia prepared and kept the attached records. She stated that the records were made at or near the time of the occurrence of the matters set forth therein by a person with knowledge of the matters; that the records were kept in the course of Wachovia’s regularly conducted business; and that the records were reliable.

The defendants objected to admission of the Flight affidavit and attached loan documents, but the trial court reserved ruling until after the close of the evidence. Several days after the trial, the trial court issued its final order, in which it found that the affidavit and attached loan documents were not admissible because Flight, an employee of Wells Fargo, did not have personal knowledge of the record-keeping practices of Wachovia. In the absence of the Flight affidavit and attached business records, the court concluded that there was no evidence of damages as to the three personal guarantors and entered judgment in their favor. However, the court further found that Hydrajet had made admissions in judicio as to the amount of its debt, and the court thus entered judgment in favor of Ciras against Hydrajet in the principal amount of $729,856, plus interest, late fees and attorney fees.

Ciras appeals from the final judgment, contending that the trial court erred in excluding the Flight affidavit and the attached bank records. We agree.

Because the bench trial on damages in this case took place in June 2014, the provisions of Georgia’s new Evidence Code, effective January 1, 2013, apply. See Ga. L. 2011, pp. 99, 214, § 101.

Under [OCGA § 24-8-803 (6) of] our new code, business records may be admissible as a hearsay exception: Unless the source of information or the method or circumstances of preparation indicate lack of trustworthiness, a memorandum, report, record, or data compilation, in any form if (A) made at or near the time of the described acts, events, conditions, opinions, or diagnoses; (B) made by, or from information transmitted by, a person with personal knowledge and a business duty to report; (C) kept in the course of a regularly conducted business activity; and (D) it was the regular practice of that business activity to make the memorandum, report, record, or data compilation, all as shown by the testimony of the custodian or other qualified witness or by certification.

Ware v. Multibank 2009-1 RES-ADC Venture, LLC, 327 Ga. App. 245, 248-249 (2) (758 SE2d 145) (2014) (citation, punctuation and footnote omitted).

Since OCGA § 24-8-803 mirrors Rule 803 of the Federal Rules of Evidence, we may look to federal case law for guidance in interpreting our statute. Ware, supra at 249 (2), n. 11. And as several federal courts have noted under the federal rule, “ ‘employees of successor entities can authenticate business records of their predecessor entities that pass to them by virtue of merger.’ ” Id. at 249 (2), quoting Fed. Deposit Ins. Corp. v. Sri Chakra Group LLC, No. 5:13-CV-268-MTT, 2014 U. S. Dist. LEXIS 12701, at *11 (M.D. Ga. Feb. 3, 2014). Indeed, “[i]t is not necessary that the person who actually prepared the business record testify, nor that the document be prepared by the business which has custody of it, so long as other circumstantial evidence suggests the trustworthiness of the record.” United States v. Hawkins, 905 F2d 1489, 1494 (II) (A) (2) (11th Cir. 1990) (citation omitted). Moreover,

[fjederal courts that have examined the trustworthiness prong of the business record exception to the hearsay rule have noted that, generally, bank records are particularly suitable for admission under Rule 803 (6) in light of the fastidious nature of record keeping in financial institutions, which is often required by governmental regulations.

Ware, supra at 249 (2) (citations and punctuation omitted). Thus, “a successor bank can rely upon and integrate into its own business records its predecessor’s business records so long as a proper foundation is laid under OCGA § 24-8-803 (6).” Roberts v. Community & Southern Bank, 331 Ga. App. 364, 372 (2) (771 SE2d 68) (2015) (citation and footnote omitted).

In the instant case, the Flight affidavit establishes that the bank records in question passed to Wells Fargo as part of its acquisition of Wachovia and were integrated into its own business records. As for the trustworthiness of the records, Flight’s averment that they are accurate is supported by the fact that the records reflect the exact remaining principal balance of $729,856 admitted by Hydrajet. And there was no evidence presented at trial disputing that principal balance. Under these circumstances, we find that the Flight affidavit “has sufficiently authenticated those records she relied on and attached to her affidavit.” Ware, supra (citations omitted). The documents were therefore admissible as business records. See Roberts, supra at 371. See also Lockwood v. Fed. Deposit Ins. Corp., 330 Ga. App. 513, 516 (2) (a), n. 13 (767 SE2d 829) (2014) (when routine, factual documents made by one business are transmitted and delivered to a second business and then entered in the regular course of business of the receiving business, such documents are admissible as business records).

Decided July 13, 2015 —

Reconsideration denied July 29, 2015 —

Raley & Sandifer, John W. Sandifer, Michael A. Sierra, for appellant.

R. Leslie Waycaster, Jr.; McCurry Law Firm, Robert G. McCurry, for appellees.

“It is within the trial court’s discretion to determine whether a proper foundation was laid for application of the business records exception to a particular document[.]” Roberts, supra at 369 (2) (citations and punctuation omitted). Here, the trial court abused its discretion by finding that the business records exception does not apply to the routine bank records authenticated by the Flight affidavit as having been transferred to Wells Fargo, and integrated into its own business records, as part of the acquisition of Wachovia. Accordingly, we reverse and remand for reconsideration of the issue of damages in light of the admissible affidavit and attached records.

Judgment reversed and case remanded.

Ellington, P. J., and Dillard, J., concur.