Healthy-It, LLC v. Subodh K. Agrawal
343 Ga. App. 660
| Ga. Ct. App. | 2017Background
- HPN (Healthy Panacea Network LLC) was a 50/50 joint venture between Panacea Medical (Agrawal) and Healthy-IT (Hammady/Fathy) to finish EMR software and integrate TelePax for U.S. sales. Panacea funded operations.
- Healthy-IT worked on EMR development; EMR never generated outside sales, but HPN reported income on tax returns from 2011–2013 (largely Panacea investments and TelePax licensing).
- Relations deteriorated in 2013: Hammady controlled server access, left the office, and Agrawal reported alleged theft to police; Agrawal emailed the data center saying Hammady was under investigation.
- Litigation: AHC/Panacea/HPN sued Hammady/Healthy-IT for multiple claims; Appellants counterclaimed against Appellees and added Agrawal as a counterclaim defendant. Agrawal failed to answer and default was entered but later opened by the trial court under OCGA § 9-11-55(b).
- On cross-motions for summary judgment, the trial court (a) opened default, (b) granted summary judgment to Appellees on Healthy-IT’s breach-of-contract cost claim, and (c) denied summary judgment on several claims (defamation per se, trade-secret misappropriation, promissory estoppel); Healthy-IT lost summary judgment on tortious-interference but the Court of Appeals reversed that part.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Trial court erred in opening default (Agrawal) | Default should not be opened once final judgment; OCGA § 9-11-60(d) applies | Trial court properly opened default under OCGA § 9-11-55(b); no timely objection below | Affirmed: opening default was within discretion; appellant waived argument under § 9-11-60(d) by not raising it below |
| Breach of contract — recovery of Healthy-IT development costs under Operating Agreement | Healthy-IT: Article I ¶9 entitles it to reimbursement from “all income” of HPN (up to $250k) | Appellees: ¶4/¶10 limit reimbursement to sales proceeds of EMR; no EMR sales occurred so no recovery | Reversed: agreement ambiguous (conflicting ¶4, ¶9, ¶10); ambiguity for jury to resolve |
| Defamation per se — email to Cirracore stating Hammady under investigation | Hammady: email was false, unprivileged, caused actionable harm | Agrawal: communicated to data center after police report; factual dispute over falsity and privilege | Affirmed denial of summary judgment: genuine factual issues on falsity, privilege, and harm |
| Trade-secret misappropriation — retention/use of EMR software | Appellees: Appellants improperly retained and failed to return EMR/software, constituting improper means | Appellants: software was provided voluntarily; no evidence of disclosure/use | Affirmed denial of summary judgment: factual dispute whether retention amounted to improper means |
| Promissory estoppel — Panacea relied on promises to make EMR ONC-compliant | Appellees: Panacea invested nearly $900k in reliance on assurances of completion | Appellants: Operating Agreement required Panacea to contribute; reliance not reasonable/exclusive | Affirmed denial of summary judgment: reasonable reliance is a jury question given disputed facts |
| Tortious interference — Healthy-IT’s letters caused licensees to terminate HPN contracts | Healthy-IT: letters were communications, not wrongful interference; was a member/beneficiary of HPN | HPN/Panacea: letters induced licensees to terminate, causing financial injury | Reversed (for Healthy-IT): as 50% LLC member with direct economic interest, Healthy-IT was not a stranger to contracts and summary judgment for Healthy-IT should have been granted |
Key Cases Cited
- Karan, Inc. v. Auto-Owners Ins. Co., 280 Ga. 545 (discretion/standards for opening default under OCGA § 9-11-55)
- Strader v. Palladian Enterprises, LLC, 312 Ga. App. 646 (appellate review of § 9-11-55 issues)
- Shortancy v. North Atlanta Internal Medicine, P.C., 252 Ga. App. 321 (prejudice analysis when default is opened)
- Bd. of Commrs. of Crisp Co. v. City Commrs. of the City of Cordele, 315 Ga. App. 696 (contract construction principles)
- Mathis v. Cannon, 276 Ga. 16 (elements of defamation claim)
- ULQ, LLC v. Meder, 293 Ga. App. 176 (ownership interest prevents actor from being a stranger for tortious-interference analysis)
- Atlanta Market Center Mgmt. Co. v. McLane, 269 Ga. 604 (stranger doctrine and economic interest in contract)