LABMD, INC. v. SAVERA
A14A1540
Court of Appeals of Georgia
March 23, 2015
331 Ga. App. 463 | 771 S.E.2d 148
ANDREWS, Presiding Judge.
Chaunda F. Brock, for appellant. Tracy Graham-Lawson, District Attorney, Elizabeth A. Baker, Assistant District Attorney, for appellee.
ANDREWS, Presiding Judge.
Relevant to the issues in this appeal, the trial court found that LabMD hired Dr. Savera in 2006 as its medical director and chief genitourinary pathologist. On January 22, 2010, Dr. Savera tendered 90 days’ notice of his resignation from LabMD as required by his employment contract. After Dr. Savera provided his notice, he continued working for LabMD but was terminated by LabMD on April 12, 2010 — ten days shy of the conclusion of his 90-day notice term. On the same date, LabMD filed a complaint against Dr. Savera alleging that Dr. Savera breached certain restrictive covenants in his employment contract.1 In five subsequent amended complaints, LabMD asserted additional causes of action against Dr. Savera, including: (i) breach of contract for failure to maintain regular working hours; (ii) breach of fiduciary duty; (iii) misappropriation of trade secrets;
(iv) violation of the Federal Computer Fraud and Abuse Act (
Following trial, Dr. Savera filed a motion for attorney fees against LabMD and LabMD‘s counsel pursuant to
In its order granting Dr. Savera‘s motion, the trial court initially found that Dr. Savera incurred attorney fees totaling $320,062.21. However, the trial court examined each of LabMD‘s eight causes of action and determined that five of them were frivolous and lacked substantial justification. As a result, the trial court apportioned Dr. Savera‘s attorney fees only to those causes of action it found to be frivolous, which resulted in an award of attorney fees in the amount of $168,257.18.2 This appeal followed.
In any
civil action in any court of record of this state, reasonable and necessary attorney‘s fees and expenses of litigation shall be awarded to any party against whom another party has asserted a claim, defense, or other position with respect to which there existed such a complete absence of any justiciable issue of law or fact that it could not
be reasonably believed that a court would accept the asserted claim, defense, or other position. Attorney‘s fees and expenses so awarded shall be assessed against the party asserting such claim, defense, or other position, or against that party‘s attorney, or against both in such manner as is just.
Similarly, a trial court
may assess reasonable and necessary attorney‘s fees and expenses of litigation in any civil action in any court of record if, upon the motion of any party or the court itself, it finds that an attorney or party brought or defended an action, or any part thereof, that lacked substantial justification or that the action, or any part thereof, was interposed for delay or harassment, or if it finds that an attorney or party unnecessarily expanded the proceeding by other improper conduct, including, but not limited to, abuses of discovery procedures available under Chapter 11 of this title, the “Georgia Civil Practice Act.” As used in this Code section, “lacked substantial justification” means substantially frivolous, substantially groundless, or substantially vexatious.
As a threshold matter, LabMD does not challenge Dr. Savera‘s entitlement to an award under
1. In its first enumeration of error, LabMD contends that the trial court erred in awarding attorney fees to Dr. Savera without considering a potential setoff for: (a) the amounts received, if any, from Dr. Savera‘s settlements with LabMD‘s counsel and counsel‘s law firm; and (b) the amounts received from Admiral pursuant to cost of defense payments made under its insurance policy issued to LabMD. See n. 1, supra. We agree.
(a) Settlement of Claims. On January 23, 2013, Dr. Savera filed withdrawals of his motion for attorney fees as it applied to counsel for LabMD and counsel‘s law firm; the dismissals acknowledged that Dr. Savera “settled its attorneys’ fees claim against [counsel and counsel‘s law firm, respectively]” but contained no additional information concerning the settlement agreement. Three days later, the trial court executed its order granting Dr. Savera‘s motion and awarding $168,257.18 in attorney fees.
Although the trial court was aware of the settlement of Dr. Savera‘s claims against LabMD‘s counsel and counsel‘s law firm, the order is silent as to the effect, if any, of Dr.
(b) Payment of Attorney Fees by Insurance Policy. Similarly, LabMD next argues that the trial court failed to apply a setoff of its attorney fees award to account for the defense costs paid by Admiral. Again, we agree.
In its order granting Dr. Savera‘s motion for attorney fees, the trial court awarded fees in the amount of $168,257.18. However, the parties acknowledged that Admiral exhausted its $250,000 policy limit to cover Dr. Savera‘s defense costs. To that end, Dr. Savera introduced evidence that he incurred attorney fees of $315,493.92, or
$65,493.92 in excess of Admiral‘s defense cost payments. In any case, the trial court neglected to analyze the amounts paid by Admiral and, in particular, Dr. Savera, and to determine the proper application of the setoff in view of the fees incurred individually by Dr. Savera. See Lusk, 277 Ga. at 246 (1); Roofer‘s Edge, 295 Ga. App. at 296 (1). As discussed in Division 1, supra, we remand this matter to the trial court for findings of fact and conclusions of law concerning a potential setoff of its award in view of Admiral‘s payments and Dr. Savera‘s attorney fees not covered by Admiral.
2. Second, LabMD argues that the trial court abused its discretion by including in its attorney fees award amounts attributable to, inter alia, the prosecution of Dr. Savera‘s counterclaim and to litigate Admiral‘s declaratory judgment action.
(a) In cases involving attorney fees awards pursuant to
(b) With regard to the fees discussed in items (iii), (iv), and (v) of Division 2 (a), supra, we conclude that LabMD has failed to demonstrate an abuse of the trial court‘s discretion. See
was necessary and proper for Dr. Savera‘s defense in the LabMD litigation. The trial court agreed, and we find no abuse of its discretion.
(d) The fees enumerated in items (i) and (ii) of Division 2 (a), supra, are closer questions. On their faces, these items do not appear to relate to LabMD‘s sanctionable conduct; rather, they appear to encompass more general aspects of Dr. Savera‘s representation. However, in view of our discussion in Division 1, supra, and the remand authorized therein, the trial court should consider whether the following incurred attorney fees are related to LabMD‘s sanctionable conduct and, if so, address the fees in its order adjudicating Dr. Savera‘s motion: (a) litigation of Dr. Savera‘s counterclaim; and (b) assorted correspondence concerning Dr. Savera‘s 401(k) account and other employment benefits.
In sum, we affirm the trial court‘s finding that Dr. Savera‘s counsel‘s representation of Dr. Savera in the Admiral declaratory judgment action and in LabMD‘s separate civil action against Dayley was necessary to Dr. Savera‘s defense in this case because LabMD has failed to demonstrate an abuse of the trial court‘s discretion. We nevertheless vacate the trial court‘s order granting Dr. Savera‘s motion for attorney fees and remand for a hearing to consider: (a) a possible setoff in view of Dr. Savera‘s settlement of his claim for attorney fees against LabMD‘s counsel and counsel‘s law firm; (b) a possible setoff related to Admiral‘s partial payment of Dr. Savera‘s defense costs; (c) the amount of attorney fees paid by Dr. Savera individually and its effect upon the trial court‘s award; and (d) the relationship of Dr. Savera‘s counsel‘s litigation of Dr. Savera‘s counterclaim and representation concerning Dr. Savera‘s employment benefits to LabMD‘s sanctionable conduct.
Judgment affirmed in part and vacated in part, and case remanded for further proceedings. McFadden and Ray, JJ., concur.