Health Law and Regulation Update Blog Post by Eric Frisch.

The Georgia Supreme Court has affirmed a decision of the Georgia Court of Appeals holding that apportionment of damages only applies in cases involving more than one named defendant. Plaintiff was a limited liability company managed by an individual manager. The manager hired the defendant law firm. The manager embezzled company funds. The company sued the manager and won, but was unable to recover any money.

The company then sued the law firm for legal malpractice and breach of fiduciary duty. The law firm was the only named defendant. The law firm gave notice of a non-party at fault under the apportionment statute, pointing the finger at the former manager. In addition, the law firm pointed the finger at the company itself.

At trial, the jury awarded $2.1 million and apportioned 60% of the fault to the non-party manager, 8% to the company, and the rest to the law firm. The Court ordered the law firm to pay 32% of the total damages. On appeal, the Court of Appeals held that the trial court erred in reducing the damages by the 60% of fault apportioned to the manager, since the apportionment statute only authorizes reduction of damages in cases involving more than one person as a defendant. Here, since the law firm was the only defendant, the statute only authorized reduction of damages by the percentage ascribed to the plaintiff company, or 8%.

The Georgia Supreme Court affirmed based on the same textual interpretation. The General Assembly only authorized reduction of damages by the fault of the plaintiff in a case in which there is only one named defendant. While a jury may apportion fault to a non-party in such a case, the judgment is not reduced by the percentage of fault assigned to a non-party because the statute only authorizes reduction of damages for non-party fault in cases involving “more than one person.”

Significantly, in footnote 2, the Supreme Court wrote that a single defendant is “not without a remedy” because they can seek contribution from a joint tortfeasor under Section 51-12-32(a).

Take-home: the wording of Section 51-12-33 has always been problematic, especially with the strange use of liability, fault, and responsibility. This case highlights yet another textural problem with the statute. It is time for the General Assembly to fix the statute if it intended something different. In addition, contribution appears to be back on the menu.

The case is Alston & Bird, LLP v. Hatcher Management Holdings, LLC, ___ S.E.2d ____ (Ga.Sup.Ct. August 10, 2021).

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