Georgia Dermatologic Surgery Centers, P.C. v. Pharis
323 Ga. App. 181
| Ga. Ct. App. | 2013Background
- GDSC is equally owned by Pharis and Baucom, who are the sole directors and officers.
- Baucom and Pharis jointly operated GDSC as equal owners, directors, and key physician-employees.
- Pharis was terminated for cause on October 26, 2010, without a board or shareholder meeting.
- Shareholders’ agreement treats a shareholder/employee termination as a “Sale Event” triggering a share sale to the corporation.
- Bylaws require the board to manage the business and for directors to elect officers; president’s authority is limited to day-to-day operations.
- Trial court granted partial summary judgment to Pharis on liability for breach of contract/wrongful termination; GDSC appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Baucom had authority to terminate Pharis | Pharis | GDSC | Baucom lacked authority; termination outside president’s power. |
| Whether Pharis’ share-redemption claim was moot | Pharis | GDSC | moot due to the Pharis termination ruling. |
| Whether bad-faith attorney fees under OCGA 13-6-11 can be awarded | Pharis | GDSC | Triable issue; evidence supports possible bad faith; denial proper. |
Key Cases Cited
- Fournier v. Fournier, 479 A.2d 708 (R.I. 1984) (president lacks power to terminate owner-director/officer)
- Glisson Coker, Inc. v. Coker, 260 Ga. App. 270 (Ga. App. 2003) (president’s general authority does not include suing a 50 percent shareholder)
- Silver Pigeon Properties, LLC v. Fickling & Co., 316 Ga. App. 167 (Ga. App. 2012) (summary judgment standard; de novo review on appeal)