Dominic Firmani v. Dar-Court Builders, LLC
339 Ga. App. 413
| Ga. Ct. App. | 2016Background
- Stewart and Marcia Weinhoff and their company Dar-Court sued Dominic Firmani and Firmani Pension Services (FPS) and others after a §412(i) pension plan (funded with life insurance) was found by the IRS to be a listed transaction, producing roughly $1.9M in assessments later settled for ~$576k (taxes/penalties/interest). Plaintiffs claimed appellants drafted/failed to amend plan documents and thus caused the loss.
- The Plan documents capped life‑insurance premiums at 49% of the theoretical contribution; after underwriting produced a policy with higher premiums (annual $105,000 v. anticipated $75,000), FPS did not amend the 49% cap to the 66 2/3% regulatory maximum, causing an overfunded plan under the written documents.
- The IRS audited in 2008, assessed, and plaintiffs negotiated a settlement; plaintiffs sought to recover taxes, penalties, interest, and professional fees from Firmani/FPS and others. At trial, jury awarded $735,650 compensatory damages and apportioned fault among defendants.
- Pretrial/discovery disputes: plaintiffs produced redacted attorney bills; at trial unredacted bills and testimony by plaintiffs’ tax counsel (Bush) were introduced. An attorney outline used at Bush’s direct was inadvertently sent with the jury exhibits.
- Defendants offered an expert (Thompson) to show lower damages by offsetting alleged "unanticipated benefits" of the larger policy; the trial court excluded his damages opinion. Defendants also sought admission of an indemnity clause from the Plan; the court excluded it as not covering indemnitee negligence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Inadvertent submission to jury of counsel’s direct‑examination outline (continuing witness rule) | Outline was not part of evidence and could substitute for testimony; its submission prejudiced jury. | Defense reviewed and approved exhibits pre‑submission; any error was induced/waived. | No reversible error; defense approved exhibits at sidebar and waived/induced the error (no preservation). |
| Introduction at trial of unredacted attorney bills produced only redacted in discovery; denial of continuance/mistrial | Waiver of discovery obligations; surprise evidence required continuance or mistrial; admission prejudiced defense. | Plaintiffs waived privilege before trial; unredacted bills were provided to defense days before testimony; defense declined to seek continuance or mistrial. | Procedurally barred: defendants failed to timely move for continuance or mistrial; issue not preserved. |
| Exclusion of defendants’ damages expert testimony and methodology | Thompson’s method showed net damages far lower by offsetting benefits plaintiffs received; court erred excluding it. | Thompson’s causation premise was unsupported: benefits were not "unanticipated" and exclusion would leave plaintiffs undercompensated; expert relied on facts outside/equivocal with record. | No abuse of discretion: expert’s causation basis contradicted the evidence and thus his damage calculation was inadmissible. |
| Admission of indemnity clause to show Dar‑Court must indemnify FPS for negligence | Clause permits indemnity/insurance for plan fiduciaries and could shift responsibility; jury should consider it. | Clause does not expressly indemnify indemnitees for their own negligence; contractual indemnities construed narrowly. | Exclusion proper: clause lacked an explicit provision covering indemnitee negligence; court correctly declined to interpret it as indemnifying negligence. |
Key Cases Cited
- Freese II, Inc. v. Moses, 301 Ga. App. 793 (appellate evidentiary standard for viewing facts in light most favorable to verdict)
- McDaniel v. McDaniel, 288 Ga. 711 (continuing witness rule prohibits documents substituting for testimony)
- Smith v. Stacey, 281 Ga. 601 (failure to object to exhibits forfeits appellate review)
- Sanders v. State, 246 Ga. 43 (approval of exhibits by counsel supports submission to jury)
- Dyals v. Dyals, 281 Ga. 894 (induced error doctrine where counsel approved exhibits)
- Infinite Energy v. Cottrell, 295 Ga. App. 306 (remedy for surprise discovery evidence is postponement or mistrial, not exclusion)
- John Thurmond & Assoc. v. Kennedy, 284 Ga. 469 (damages aim to restore injured party, admissible expert bases must align with evidence)
- Broda v. Dziwura, 286 Ga. (tortfeasor must compensate full harm; benefits to plaintiff do not justify reducing tort liability)
- Amalgamated Transit Union Local 1324 v. Roberts, 263 Ga. (same principle: tortfeasor liability not limited to net loss)
- Ryder Integrated Logistics v. BellSouth Telecommunications, 281 Ga. (indemnity contracts not construed to cover indemnitee’s negligence absent express language)