I. A. Group, Ltd. Co. v. Rmnandco, Inc.
336 Ga. App. 461
Ga. Ct. App.2016Background
- RMNANDCO sued I. A. Group, Stephan Fitch, CX5, and others alleging breach of fiduciary duty, fraud, violations of the Georgia Securities Act, and RICO, based on alleged usurpation of opportunities and withheld distributions.
- The trial court sanctioned the four I. A. Group defendants by striking their answers, counterclaims, and third‑party complaints and entering default judgment on liability; only unliquidated damages went to a jury.
- At trial the jury awarded $2.5 million in compensatory damages jointly and severally against the four I. A. Group defendants and $10 million punitive damages against Fitch (plus other awards against non‑appealing defendants).
- The defendants objected pretrial and at trial to the use of a joint‑and‑several verdict form and requested apportionment under OCGA § 51‑12‑33; the trial court refused and instructed the jury to award damages in a lump sum.
- Defendants also moved to arbitrate based on an unsigned operating agreement; the pretrial order signed by counsel stated there were no pending motions, and the court made no ruling on arbitration.
- Defendants appealed, arguing (1) the court should have instructed apportionment rather than joint and several liability, (2) the court improperly barred them from litigating liability/damage issues after default, (3) hearsay evidence of damages was admitted, and (4) the court failed to rule on arbitration. The Court of Appeals reversed and remanded for a new trial based on the apportionment error.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether OCGA § 51‑12‑33 required apportionment of damages instead of joint and several liability | RMNANDCO argued the verdict form and jury instruction for joint and several liability were proper and defendants induced the form by earlier agreeing to the pretrial order | Defendants argued the statute mandates apportionment among multiple liable persons and the court erred by refusing to amend the pretrial order and instruct apportionment | Court held OCGA § 51‑12‑33 mandates apportionment; instructing joint and several liability was error and warranted a new trial |
| Whether a default on liability prevents apportionment or assessment of fault among defendants | RMNANDCO contended apportionment does not apply because default prevented assigning percentages of fault to defendants | Defendants argued the statute requires the trier of fact to assess percentages of fault and apportion damages even when liability was established by default | Court held the statute applies despite a default on liability; apportionment and fault allocation at trial are required |
| Whether court’s refusal to rule on arbitration was reversible error | RMNANDCO relied on the pretrial record showing no pending motions and urged no error | Defendants argued the arbitration clause (in an unsigned operating agreement) required a ruling to compel arbitration | Court held defendants had acquiesced by signing a pretrial order stating no pending motions; no reversible error on arbitration claim |
| Whether other asserted trial errors require reversal (hearsay, limits on contesting liability/damages) | RMNANDCO argued no reversible error beyond apportionment issue | Defendants raised additional evidentiary and procedural errors | Court did not address other contentions because reversal on apportionment required a new trial; left issues for the trial court on remand |
Key Cases Cited
- Eagle Jets, LLC v. Atlanta Jet, Inc., 321 Ga. App. 386 (review of jury charge uses plain legal error standard)
- Cheddersingh v. State, 290 Ga. 680 (preprinted jury verdict forms are part of jury instructions)
- McReynolds v. Krebs, 290 Ga. 850 (statute’s plain language not limited to plaintiff fault; apportionment applies broadly)
- Broadcast Concepts, Inc. v. Optimus Financial Svcs., LLC, 274 Ga. App. 632 (default precludes defendant defenses that would defeat recovery but does not bar apportionment of damages)
- Zaldivar v. Prickett, 297 Ga. 589 (statutory framework for considering fault of all contributors when apportioning damages)