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http://www.gaappeals.us/rules
November 15, 2016
In the Court of Appeals of Georgia
A16A0978. RICHARDSON v. LOCKLYN.
BOGGS, Judge.
Freida Latrice Richardson appeals the trial court’s denial of her motion for
attorney fees under Georgia’s “offer of settlement statute,” OCGA § 9-11-68. For the
reasons that follow, we vacate the judgment and remand this case for an evidentiary
hearing on the request for attorney fees pursuant to that Code section.
In May 2014, Quandra Nicole Locklyn sued Richardson for damages allegedly
arising from a 2012 automobile collision. Specifically, Locklyn sought recovery for
her medical bills, lost wages, and pain and suffering. During discovery, Locklyn
produced medical bills totaling $18,927.25. The bills covered ambulance services and
hospital care that she received on the day of the collision, as well as further medical
treatment that she sought later. In July 2014, Richardson sent Locklyn a formal offer
under OCGA § 9-11-68 to settle her claims for $12,500.00. Locklyn rejected the
offer.
At trial, Richardson stipulated to her liability, but she disputed the extent of
Locklyn’s injuries and whether those injuries were caused by the collision. Locklyn
testified that she felt pain in her leg and head immediately after the collision, was
given arm and neck braces in the emergency room, and subsequently followed up
with specialists. She claimed that she had ongoing pain and numbness in her hands
and feet as a result of the collision. Locklyn presented no evidence concerning any
lost wages.
On cross-examination, Locklyn admitted that she had been “disabled” for the
past five years for other reasons, that she had suffered a lower back injury in 2010,
and that she had been in a single-car accident in 2013. Locklyn called no expert or lay
witnesses to provide any further evidence about the nature or cause of her injuries.
The jury returned a $6,948.25 verdict for Locklyn, which was the total amount of her
bills for ambulance services and hospital treatment on the day of the collision.
After trial, Richardson filed a motion for attorney fees and litigation expenses
pursuant to OCGA § 9-11-68, based on Locklyn’s rejection of her settlement offer.
Locklyn filed a response to the motion asserting that the offer was not made in good
2
faith “based on medical expenses incurred and the liability of [Richardson].”
Richardson did not respond to Locklyn’s assertion that the offer of settlement was not
made in good faith, and the trial court subsequently denied her motion for attorney
fees pursuant to OCGA § 9-11-68, ruling as follows:
[A]t the time the Defendant made the settlement offer of $12,500, the
Plaintiff’s medical expenses were $18,927.25, exceeding the offer. This
amount was known to the Defendant at the time of the offer and
disclosed during the discovery period and was not a reasonable offer or
a realistic assessment of liability. Additionally, the Defendant stipulated
to liability at trial and thus there were no issues of liability in dispute.
For the foregoing reasons, the Court finds that the offer to settle made
by the defendants [sic] was not in good faith based upon the overall
record and evidence presented at trial.
Richardson appeals.
If a defendant makes a written offer to settle a tort claim in accordance with
OCGA § 9-11-68 (a),1 and the plaintiff rejects the offer,
the defendant shall be entitled to recover reasonable attorney’s fees and
expenses of litigation incurred by the defendant or on the defendant’s
behalf from the date of the rejection of the offer of settlement through
1
OCGA § 9-11-68 (a) sets forth a number of requirements for such offers.
Locklyn does not dispute that Richardson’s offer met those requirements.
3
the entry of judgment if the final judgment is one of no liability or the
final judgment obtained by the plaintiff is less than 75 percent of such
offer of settlement.
(Emphasis supplied.) OCGA § 9-11-68 (b) (1). If the defendant provides proof to the
court that the foregoing provision applies to the judgment, then the court “shall order
the payment of attorney’s fees and expenses of litigation.” (Emphasis supplied.)
OCGA § 9-11-68 (d) (1). The court, however, may disallow an award of otherwise
eligible fees and expenses if it “determine[s] that an offer was not made in good faith
in an order setting forth the basis for such a determination.” OCGA § 9-11-68 (d) (2).2
It is undisputed that Richardson was entitled to an award of attorney fees and
expenses under OCGA § 9-11-68 (b) (1), because Locklyn’s jury verdict was less
than 75 percent of the settlement offer. Nonetheless, the trial court declined to enter
such an award because it concluded that Richardson’s offer was not made in good
faith based upon the relationship between the amount of the offer and Locklyn’s
medical expenses, as well as Richardson’s admission of liability. Whether these
2
OCGA § 9-11-68 (d) (2) provides in full: “If a party is entitled to costs and
fees pursuant to the provisions of this Code section, the court may determine that an
offer was not made in good faith in an order setting forth the basis for such a
determination. In such case, the court may disallow an award of attorney’s fees and
costs.”
4
objective factors are sufficient to support a finding of a lack of good faith is
problematic given that good faith is not defined in the statute and there is a dearth of
caselaw in Georgia interpreting its meaning.
Georgia’s offer of settlement statute, part of the Tort Reform Act of 2005, is
modeled after Florida’s offer of judgment statute, Fla. Stat. § 768.79,3 and both
statutes authorize a trial court to disallow attorney fees based upon a finding that an
3
Fla. Stat. § 768.79 (6) (a) provides:
If a defendant serves an offer which is not accepted by the plaintiff, and
if the judgment obtained by the plaintiff is at least 25 percent less than
the amount of the offer, the defendant shall be awarded reasonable costs,
including investigative expenses, and attorney’s fees, calculated in
accordance with the guidelines promulgated by the Supreme Court,
incurred from the date the offer was served, and the court shall set off
such costs in attorney’s fees against the award. When such costs and
attorney’s fees total more than the amount of the judgment, the court
shall enter judgment for the defendant against the plaintiff for the
amount of the costs and fees, less the amount of the award to the
plaintiff.
Section (7) (a) of Fla. Stat. § 768.79 states: “If a party is entitled to costs and fees
pursuant to the provisions of this section, the court may, in its discretion, determine
that an offer was not made in good faith. In such case, the court may disallow an
award of costs and attorney’s fees.”
5
offer was not made in good faith.4 See Merritt E. McAlister, “The Swift, Silent Sword
Hiding in the (Defense) Attorney’s Arsenal: The Inefficacy of Georgia’s New Offer
of Judgment Statute as Procedural Tort Reform,” 40 Ga. L. Rev. 995, 1010-1011 (III)
n.61 (2006); Fla. Stat. § 768.79. We therefore look to our sister state for guidance in
its application. Cf. Zaldivar v. Prickett, 297 Ga. 589, 598-599 (1) (774 SE2d 688)
(2015) (considering “judicial understandings” of other jurisdictions with
apportionment statutes similar to that of Georgia). Florida courts have held that
[w]hether the offeror has good faith rests on whether the offeror has a
reasonable foundation on which to base the offer. So long as the offeror
has a basis in known or reasonably believed fact to conclude that the
offer is justifiable, the good faith requirement has been satisfied. In the
context of a nominal offer of judgment, this court has held that where
the offeror has a reasonable basis to believe that exposure to liability is
minimal, a nominal offer is appropriate. Whether the offeror has a
reasonable basis to support the offer is determined solely by the
subjective motivations and beliefs of the offeror. In making this
determination, the trial court is not restricted to the testimony of the
offeror attesting to good faith; rather, the court may properly consider
4
Florida’s Rule of Civil Procedure 1.442 (Proposals for Settlement), subsection
(h) (1), also authorizes a trial court in its discretion to disallow an award of costs and
attorneys’ fees even though a party is entitled to them pursuant to Florida law, if it
determines that “a proposal was not made in good faith.”
6
objective evidence of facts and circumstances that suggest whether the
offeror made the offer with subjective good faith.
(Citations and punctuation omitted.) Arrowood Idem. Co. v. Acosta, Inc., 58 So3d
286, 289 (Fla. Ct. App. 2011). See also Gawtrey v. Hayward, 50 So3d 739 (Fla. Ct.
App. 2010); Gurney v. State Farm Mut. Auto., 889 So2d 97 (Fla. Ct. App. 2004).
“Several types of objective evidence have been found relevant to a finding of good
faith,” Arrowood, supra, including (1) whether “the offer bore no reasonable
relationship to the amount of damages or [(2)] a realistic assessment of liability, or
[(3)] that [the offeror] lacked intent to settle the claim.” See Allstate Ins. Co. v
Manasse, 715 So2d 1079, 1082 (Fla. Ct. App. 1998). Other examples of objective
evidence include whether the offer was made prematurely based upon the amount of
discovery completed, see Gawtry, supra, 50 So3d at 743 (III), the plaintiff’s medical
records, independent medical examination reports, and the amount of property
damage. See Gurney, supra, 889 So2d at 100.
While Florida courts may consider objective evidence, they cannot base a
ruling “exclusively on the objective factors.” Arrowood, supra, 50 So3d at 290.
Instead, they are “required to consider [the offeror’s] explanation and then determine
whether, despite consideration of the objective factors . . . [the offeror] had a
7
subjectively reasonable belief on which to base its offer.” (Citations and punctuation
omitted.) Id. at 289. “The fact that [an] offer was nominal in amount is not necessarily
determinative of the issue of good faith.” (Citations and punctuation omitted.)
Gawtry, supra, 50 So3d at 743 (II).
In determining whether a party is entitled to attorney fees pursuant to the offer
of settlement statute including whether an offer was made in good faith, a Florida
appellate court has required a hearing on the issue. See Schapiro v. Rubinson, 784
So2d 1135, 1137 (Fla. Ct. App. 2005); compare Menchise v. Senterfitt, 532 F.3d
1146, 1153-1154 (III) (11th Cir. 2008) (11th Circuit taking position that Schapiro
does not require a hearing in a bankruptcy case, but noting “a hearing might be
necessary if . . . the court is inclined to deny a motion for attorney’s fees on the basis
of a bad faith offer.”)5 See also Gawtry, supra, 50 So3d at 742 (I); Gurney, supra, 889
So2d at 100. Additionally, Florida courts have held that the burden is on the offeree,
or the person seeking to avoid the payment of attorney fees, to prove the absence of
good faith. Gawtry, supra, 50 So3d at 99-100 (II).
5
We have found no Florida law in our research from which it can be determined
that the trial court did not hold a hearing on a motion for attorney fees pursuant to Fla.
Stat. 768.79.
8
In Bell v. Waffle House, Inc., 331 Ga. App. 443, 445 (771 SE2d 132) (2015),
our court considered whether a hearing should be required where a party seeks
attorney fees pursuant to OCGA § 9-11-68, but we did not decide the issue in light
of the fee opponent’s waiver. We now hold that a hearing is required for the trial
court to determine whether fees will be awarded pursuant to that Code section.
As explained in Bell,
with respect to other statutes awarding attorney fees, such as OCGA §
9-15-14, the Supreme Court has held that even in the absence of a
hearing requirement in the Uniform Superior Court Rules, a hearing is
required in order to enter an award of attorney fees. That is because an
oral hearing gives the party opposing attorney fees an opportunity to
confront and challenge testimony with regard to the need for, and value
of, legal services. Likewise, in the context of an award under OCGA §
14-2-1604, which contains an automatic fee award under certain
conditions and also lacks an explicit hearing requirement, this Court has
held that a party opposing a claim for attorney fees has a basic right to
confront and challenge testimony as to the value and need for legal
services.
(Citations, punctuation and footnotes omitted; emphasis in original.) Id. at 445. And
as the Georgia Supreme Court explained in Williams v. Cooper 280 Ga. 145, 147 (1)
(625 SE2d 754) (2006), “for an award under OCGA § 9-15-14 (b), the conduct of the
9
party against whom an award is sought, and the conduct of that party’s counsel, are
considered along with the impact of that conduct on the attorney fees incurred by the
opposing party.” (Citation and punctuation omitted.)
Similarly, in the context of a request for attorney fees pursuant to the offer of
settlement statute, a hearing should be required so that the party opposing fees has an
opportunity to confront and challenge whether the fees a party is entitled to under
OCGA § 9-11-68 (b), are “reasonable,” and, if raised, to shoulder its burden to prove
the absence of good faith. As stated in Bell, “even where the Code does not require
hearings, Georgia’s courts have required hearings because such an award must be
supported by evidence-based factual findings.” (Citations, punctuation and footnotes
omitted.) Id. at 446. And if the trial court determines that an offer was not made in
good faith, it must set forth the basis for its determination in a written order. OCGA
§ 9-11-68 (d) (2). This determination can only be properly made upon the offeree
shouldering its burden to show the absence of good faith after the presentation of
evidence by the parties concerning the offer and the circumstances of the offer.6
6
Such circumstances could include settlement negotiations. See OCGA § 24-4-
408 (specifically excluding OCGA § 9-11-68 from nonadmissible offers of
compromise).
10
For these reasons, we hold that a hearing is required for the award of attorney
fees pursuant to OCGA § 9-11-68, which may include, as here, the consideration of
whether the offer was made in good faith.7 Our holding in Bell, supra, 331 Ga. App.
at 446, does not require a different result. Although a party may waive a hearing
expressly or by conduct, a timely objection to the motion “even without a specific
request for a hearing, is generally sufficient to preclude a waiver by conduct of the
right to an evidentiary hearing.” (Citation and punctuation omitted.) Williams v.
Becker, 294 Ga. 411, 413 (2) (a) (754 SE2d 11) (2014). Here, Locklyn filed a
response to Richardson’s motion for attorney fees asserting that the offer was not
made in good faith, therefore triggering the requirement of a hearing. Richardson’s
failure to respond to Locklyn’s assertion of no good faith is of no consequence
because the requirement of a hearing was already triggered.
We therefore vacate the judgment and remand this case for a hearing on
attorney fees under OCGA § 9-11-68.
7
We note that it appears that the trial court arguably considered only objective
factors, the amount of the offer and potential liability, which a Florida Court of
Appeals has held was error. As explained, infra, the trial court is required to consider
the offeror’s explanation and then determine whether, despite consideration of the
objective factors, the offeror had a subjective reasonable belief on which to base
offer. See Arrowood, supra, 58 So3d at 290.
11
We disagree with the dissent that because subsection (e) of OCGA § 9-11-68
provides for a bifurcated hearing, requiring a hearing under subsection (d) is
inconsistent with the intent of the legislature. We find no requirement that we must
harmonize two completely separate issues covered by the same Code section.
Subsections (a) through (d) govern offers of settlement, while subsection (d) governs
damages for frivolous claim or defenses. The dissent argues further that the Georgia
Supreme Court has imposed a hearing requirement only where the trial court grants
an award of fees. But OCGA § 9-11-68 (b), provides that a party shall be entitled to
attorney fees under certain circumstances, therefore, the statute itself anticipates an
award of fees. And as explained above, the hearing requirement was triggered by
Locklyn’s response. Richardson therefore could not abandon any argument with
regard to a hearing on fees.8 Further, where our courts have announced a new hearing
8
While we conclude here that we should remand this case for a hearing on
attorney fees pursuant to the offer of settlement, we note that the dissent places much
emphasis on the fact that Richardson never made the argument in her motion for fees
that her offer of settlement was based on a thorough evaluation of Locklyn’s medical
record and bills disclosed during discovery and that Richardson merely argued that
she was entitled to attorney fees because the verdict was less than 75 percent of the
offer. But this is all that is required to trigger the award of fees under subsection (b)
(1) (“the defendant shall be entitled to recover reasonable attorney’s fees and
expenses of litigation incurred by the defendant . . . if the final judgment is one of no
liability or the final judgment obtained by the plaintiff is less than 75 percent of such
offer of settlement” (emphasis supplied.)); nothing more. And while the dissent
12
requirement, we remand for application of the requirement. See, e. g., C. A. Gaslowitz
& Assoc. v. ZML Promenade, 230 Ga. App. 405, 406 (496 SE2d 470) (1998).
Judgment vacated and case remanded with direction. Branch, McMillian,
Rickman, and Mercier, JJ., concur. Barnes, P. J., Miller, P. J., Ellington, P. J., and
McFadden, J., dissent.
argues that the billing records of Richardson’s counsel did not include a reference to
Locklyn’s medical records and bills being reviewed and analyzed until after the
settlement offer was made, the statute allows only fees and expenses “incurred from
the date of the rejection of the offer through the entry of judgment,” see OCGA § 9-
11-68 (b) (1), and the records submitted by counsel cover the time frame between the
offer and rejection, and the jury verdict. This evidence therefore does not demand a
conclusion that counsel did not consider these items prior to making the offer. And
indeed the parties were anticipating a trial following Locklyn’s denial of
Richardson’s offer which would likely include a review of Locklyn’s medical records
and bills.
13
A16A0978. RICHARDSON v. LOCKLYN.
BARNES, Presiding Judge, dissenting.
I respectfully dissent from the majority’s opinion holding that the trial court
was required to conduct a hearing before denying attorney fees to Richardson under
the good faith provision of the offer of settlement statute, OCGA § 9-11-68 (d) (2).
The hearing issue was not raised by Richardson on appeal and thus has been
abandoned, and even if it had not been abandoned, the statutory language and
Supreme Court precedent make clear that a hearing is not required. Furthermore,
because the record did not demand a factual finding by the trial court that
Richardson’s offer of settlement was reasonable and made in good faith, we should
defer to the trial court’s decision declining to award attorney fees and affirm.
As an initial matter, Richardson does not enumerate as error or even argue on
appeal that she was entitled to a hearing on her motion for attorney fees under OCGA
§ 9-11-68. Consequently, Richardson has abandoned any argument that the trial court
erred by not holding a hearing. See Abdalla v. Atlanta Nephrology Referral Center,
338 Ga. App. 36, 37-38 (789 SE2d 288) (2016) (declining to address legal argument
regarding OCGA § 9-11-68 that was raised in the trial court but not on appeal); 134
Baker St., Inc. v. State, 172 Ga. App. 738, 741-742 (5) (324 SE2d 575) (1984) (noting
that “grounds raised at trial but not argued before this court are deemed abandoned”);
Court of Appeals Rule 25.
However, even if Richardson had not abandoned the hearing issue by failing
to raise it here, a hearing is not required before a trial court can grant or deny attorney
fees under OCGA § 9-11-68 (d) (2). Requiring a hearing under this subsection is
inconsistent with the intent of the legislature as expressed in the plain language and
structure of the statute. Significantly, OCGA § 9-11-68 (e), unlike subsection (d),
explicitly requires a hearing.1 The language in subsection (e) makes “clear that the
legislature knew how to [require a hearing] when it chose to do so,” and therefore
“we must presume that the legislature’s failure to include similar . . . language in
[subsection (d)] was a matter of considered choice.” (Citation and punctuation
omitted.) Deutsche Bank Nat. Trust Co. v. JP Morgan Chase Bank, N.A., 307 Ga.
App. 307, 311 (1) (b) (704 SE2d 823) (2010). Any other interpretation fails to
1
OCGA § 9-11-68 (e) provides in part: “Upon motion by the prevailing party
at the time that the verdict or judgment is rendered, the moving party may request that
the finder of fact determine whether the opposing party presented a frivolous claim
or defense. In such event, the court shall hold a separate bifurcated hearing at which
the finder of fact shall make a determination of whether such frivolous claims or
defenses were asserted and to award damages, if any, against the party presenting
such frivolous claims or defenses. . . .” (Emphasis supplied.)
2
harmonize the subsections of OCGA § 9-11-68 and renders the language requiring
a hearing in subsection (e) mere surplusage, a consequence that clearly should be
avoided under our rules of statutory interpretation. See Undercofler v. Colonial
Pipeline Co., 114 Ga. App. 739, 742-743 (152 SE2d 768) (1966) (“All the words of
a statute are to be given due weight and meaning,” and “[c]ourts should not so
interpret a statute as to make parts of it surplusage unless no other construction is
reasonably possible.”).
Additionally, in other contexts where the Georgia Supreme Court has imposed
a hearing requirement on an attorney fees statute, the Supreme Court has held that the
requirement applies only where the trial court has granted an award of fees. See
Evers v. Evers, 277 Ga. 132, 132 (1) (587 SE2d 22) (2003) (declining to impose
hearing requirement where trial court denied motion for attorney fees under OCGA
§ 9-15-14). Thus, separate and apart from the statutory interpretation issue, Georgia
Supreme Court precedent demonstrates that a hearing is not required in the present
case, where the trial court denied the request for attorney fees.
For these combined reasons, the trial court committed no error in declining to
award attorney fees to Richardson under OCGA § 9-11-68 (d) (2) without first
conducting a hearing. And further, based on the record in this case, it was within the
3
trial court’s sound discretion under the statute to find that Richardson’s offer of
settlement was unreasonable and not in good faith.
The decision whether an offer of settlement was reasonable and made in good
faith under OCGA § 9-11-68 (d) (2) is a factual determination left to the sound
discretion of the trial court, “based on the trial court’s assessment of the case, the
parties, the lawyers, and all of the other factors that go into such a determination,
which the trial court has gathered during the progress of the case.” Great West Cas.
Co. v. Bloomfield, 313 Ga. App. 180, 183 (2) (721 SE2d 173) (2011) (whole court).
As we have emphasized, deference by appellate courts is particularly warranted in
this context “because trial courts, unlike appellate courts, are familiar with a piece of
litigation from its inception, hear first-hand the arguments of counsel, and consider
disputed evidence within the context of an entire proceeding.” (Citation and
punctuation omitted.) Id.
In light of this highly deferential standard of review, we should affirm the trial
court’s decision to exercise its discretion and decline to award attorney fees under
OCGA § 9-11-68 (d) (2), based on the court’s factual finding that Richardson’s offer
of settlement was unreasonable and not made in good faith. The trial court based its
factual finding “upon the overall record and evidence presented at trial,” and the
4
record includes evidence to support that finding, namely, that Richardson admitted
negligence for the automobile accident in which the plaintiff was injured but did not
make an offer of settlement that at least covered the plaintiff’s medical bills disclosed
during discovery.
While Richardson argues on appeal that her offer of settlement made on July
10, 2014 was based on a thorough evaluation of the plaintiff’s medical records and
bills disclosed during discovery, Richardson never made this argument to the trial
court in her motion for attorney fees, and she submitted no affidavits or other
evidence to support it. Richardson merely argued that because the verdict was less
than 75 percent of the offer, she was entitled to an award of attorney fees. Moreover,
the billing records of Richardson’s counsel that were submitted with the fees motion
include no reference to the plaintiff’s medical records and bills being “reviewed,
analyzed and summarized” by counsel until after the settlement offer was made. “[I]n
the absence of evidence to the contrary, we will presume that the trial court reviewed
the entire record,” including the billing records, in reaching its decision that
Richardson did not act reasonably and in good faith in making the offer of settlement.
(Citation and punctuation omitted.) Clark v. Perino, 235 Ga. App. 444, 450 (3), n. 2
(509 SE2d 707) (1998).
5
In addition, the fact that the plaintiff ultimately recovered less than the full
amount of her requested medical bills later at trial “is not conclusive evidence that
[Richardson] acted in good faith.” Great West Cas. Co., 313 Ga. App. at 182 (1). If
the legislature had intended for a defense verdict to trigger an attorney fees award
automatically, it could have done so, but it did not. While the amount of the verdict
is relevant to the issue of good faith, the trial court is entitled to take into account the
information available to a defendant at the time the settlement offer was made and all
the events that transpired during the case as a whole. Id. And, here, there was some
evidence, construed in favor of the trial court’s ruling, that Richardson admitted
negligence but made a settlement offer of less than the amount of the plaintiff’s
medical bills disclosed during discovery without first having “reviewed, analyzed and
summarized” those bills.
This is simply not a case where the record reveals that the trial court made a
clear error of judgment or applied the wrong legal standard, and we cannot reverse
the trial court under an abuse of discretion standard simply because “we would have
gone the other way had it been our call.” (Citation omitted.) Koules v. SP5 Atlantic
Retail Ventures, LLC, 330 Ga. App. 282, 285 (2) (767 SE2d 40) (2014). Accordingly,
6
the trial court’s decision not to award attorney fees to Richardson under OCGA § 9-
11-68 (d) (2) should be affirmed. Therefore, I respectfully dissent.
I am authorized to state that Presiding Judge Miller, Presiding Judge Ellington,
and Judge McFadden join in this dissent.
7