FEDERAL DEPOSIT INSURANCE CORPORATION v. LOUDERMILK
305 Ga. 558
Ga.2019Background
- FDIC, as receiver for Buckhead Community Bank, sued nine former directors/officers alleging negligence and gross negligence for approving ten commercial real estate loans that caused nearly $22 million in losses and bank closure.
- After this Court’s prior decision (Loudermilk I) limiting ordinary-negligence suits by directors under the business-judgment rule, FDIC proceeded on claims grounded in failures in the decision-making process (failure to exercise ordinary care in how decisions were made).
- At trial, defendants requested jury instructions requiring apportionment of damages among them under OCGA § 51-12-33; the district court denied those requests, and the jury awarded FDIC ~$4.99 million, with defendants held jointly and severally liable.
- Defendants appealed, arguing OCGA § 51-12-33 requires apportionment because the FDIC’s losses are purely pecuniary and thus constitute "injury to person or property." FDIC contended the statute should be read narrowly (tangible property only) and that the common-law concerted-action rule preserving joint-and-several liability survived the statute.
- The Eleventh Circuit certified three questions to the Georgia Supreme Court concerning (1) whether OCGA § 51-12-33 applies to purely pecuniary tort losses against directors/officers; (2) whether § 51-12-33 abrogated the common-law concerted-action rule that imposes joint-and-several liability; and (3) whether board decisions constitute "concerted action" producing joint-and-several liability.
Issues
| Issue | Plaintiff's Argument (FDIC) | Defendant's Argument (Directors/Officers) | Held |
|---|---|---|---|
| Whether OCGA § 51-12-33 applies to tort claims for purely pecuniary losses | § 51-12-33 excludes intangible economic losses because "property" at common law meant tangible realty/personalty | Statute covers intangible property and thus applies to economic losses; apportionment required | Held: Yes — "injury to person or property" includes intangible property; § 51-12-33 applies to purely pecuniary tort claims |
| Whether § 51-12-33 abrogated common-law concerted-action rule (joint & several liability) | Concerted-action liability is vicarious/indivisible and thus cannot be apportioned; it survives the statute | The statute displaced common-law joint-and-several doctrines, requiring apportionment where multiple defendants sued | Held: No total abrogation — traditional common-law concerted action (mutual agency/joint enterprise) survives because fault is legally indivisible; joint-and-several liability remains for that narrow class |
| Whether indivisible/inextricable economic loss prevents apportionment | Indivisible injury from multiple approvals means joint-and-several liability should apply | Damages flowing from a singular injury may still be apportioned among faulted persons | Held: Courts must assess divisibility of fault; singularity of injury alone does not preclude apportionment (Couch controlling) |
| Whether a board’s decision-making necessarily constitutes "concerted action" making all directors jointly and severally liable | FDIC implied board action was concerted and indivisible | Defendants argued liability should be assessed individually and apportionment instructed | Held: Court declined to answer on facts — whether board decision is "concerted action" is record-specific; trial-level factfinder must determine if traditional concerted-action elements are proven |
Key Cases Cited
- Fed. Deposit Ins. Corp. v. Loudermilk, 295 Ga. 579 (Ga. 2014) (explaining business-judgment rule limits ordinary-negligence suits against directors but preserves claims about failures in how decisions were made)
- Couch v. Red Roof Inns, 291 Ga. 359 (Ga. 2012) (apportionment statute displaces common law; injury singularity does not bar apportionment)
- Zaldivar v. Prickett, 297 Ga. 589 (Ga. 2015) (statutory interpretation principles and customary legal meanings inform construction)
- Gilson v. Mitchell, 233 Ga. 453 (Ga. 1975) (Court of Appeals’ rule recognizing concerted action and, historically, broader joint tortfeasor doctrines affirmed)
- Posey v. Med. Ctr.-West, Inc., 257 Ga. 55 (Ga. 1987) (distinguishing traditional concerted-action scenarios from other multi-defendant negligence situations)
- Metro Atlanta Task Force for the Homeless, Inc. v. Ichthus Community Trust, 298 Ga. 221 (Ga. 2015) (civil conspiracy/ concerted-action principles: a conspiracy’s existence can make one defendant liable for acts of others in furtherance of common design)
- Bowers v. Fulton County, 221 Ga. 731 (Ga. 1966) (constitutional and statutory precedents treat "property" to include incorporeal/intangible property)