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Continuing Legal Education Seminar Highlights (Contract Litigation in Georgia)

by merlin on August 25th, 2013
  • Sumo

Contract Litigation CLE

Friday, August 23, 2012

State Bar Headquarters

 

  1. I.    William Custer – The Rules EVERY LAWYER MUST KNOW (The New Evidence Code)

 

 

Cross-Examination

  • Remember, “Beyond the scope of direct” is NOT a good objection in Georgia (can certainly go beyond the scope)

 

HEARSAY:

Rule NOW is that it goes to WEIGHT, not ADMISSIBILITY

Georgia versus Federal:      In Georgia, W can testify about what he or she said outside the courtroom (in federal rules, would be subject to a hearsay objection)

  • Res Gestae objection: new rules would only permit excited utterances, present sense impressions, and statements of mental or physical condition

 

ADMISSIONS BY AGENTS:

  • New rule is only that statement be made during agency relationship and within scope of duties (whether allowed by principal or not)

 

HEARSAY AS “ILLEGAL” EVIDENCE:

  • Objection is waived if it isn’t made.  Even then, it may not be enough for reversal on appeal

 

BUSINESS RECORDS:

  • Opinions IN business records (ex. Cop’s opinion in police report) allowed if foundation laid for expert/lay opinion
  • Foundation for lay opinion can be made by AFFIDAVIT, rather than LIVE WITNESS

 

STATEMENTS OF CO-CONSPIRATORS:

  • New Rules require PROOF that statement be made “in furtherance of” the conspiracy.

 

Refreshing Recollection:

  • New rules specify that opponent not only gets to see document used to refresh, but can ask about individual parts;
  • Showing W PRIVILEGED MATERIALS is NOT a waiver of privilege for the materials

 

BEST EVIDENCE

“A duplicate shall be admissible to the same extent as the  original, UNLESS:”

  1. Genuine question of authenticity is raised;
  2. Circumstances exist where it would be unfair to admit the copy in lieu of the original

 

CHARACTER EVIDENCE

  • New rules let a witness offer an opinion on character of Defendant, and “BENT OF MIND” is no longer a justification for introduction of prior convictions or bad acts
  • CAN cross-examine of extent of W’s knowledge of Defendant’s character
  • Court now has discretion to ask about Defendant’s past acts

 

EXPERTS:

  • Can come MIGHTY CLOSE to ultimate issue, but not QUITE (similar to FRE)
  • Harper v. State (1984) – Georgia’s version of Daubert; experts in criminal cases STILL can’t rely on hearsay for opinions

 

SUBSEQUENT REMEDIAL MEASURES:

  • They are not admissible to prove liability

 

Side note:

ADMISSION FOR SILENCE IN A BUSINESS CONTRACT SITUATION:

  • Can still hold other side to it if they don’t respond to a document tendered (admission by silence; same as FRE)

 

II.       Rance Partin:        Tort Liability and Breach of Contract

Recommends Georgia Law of Torts, and Larkins’ text (of course)

  • “Contract”, as defined in OCGA, is expressly excluded from “tort” definition in OCGA

3 Characteristics that Distinguish Contract and Tort

  1. Statute of Limitation (Tort is 2 years for injury to person and 1 year for defamation or slander – OCGA § 9-3-33; Contract is six years – OCGA § 9-3-24)
  2. Damages:
  • Compensatory; consequential, statutory versus damages from breach of contract is usually what was contemplated when contract was formed
  • No punitives for breach of contract alone (must be some tort; ex. Fraud)
    • “Clear and Convincing evidence”
    • “willful misconduct, fraud, malice…”
  1. Defenses:
  • Assumption of risk
  • Consent
  • Apportionment/comparative negligence

Remember that this is ONLY a tort damages situation!!!!!

  • Fraud in the inducement
  • Fact-based (elements of tort are not met)

 

Versus

 

Contract defenses like:

  • Warranty disclaimers
  • Exculpatory clauses (business seeks to preemptively excuse its own negligence)

–         UNLESS the exculpatory clause purports to relieve liability for acts of GROSS negligence or WILLFUL disregard

–         Must be EXPLICIT, CLEAR, UNAMBIGUOUS, PROMINENT, ETC.

–         Remember: This doesn’t affect the rule against shielding from liability to innocent third parties

  • Waiver of punitive or consequential damages
  • Arbitration clause
  • Merger clause (maybe you SAID it, but it isn’t in the CONTRACT!!!!)
  • No meeting of the minds

 

Arbitration clauses:

  • “Courts must RIGOROUSLY ENFORCE” (American Express Co. v. Italian Colors Restaurant, 133 S.Ct. 2304 (2013))

 

Remember:

            Punitive damages available for theft of trade secrets up to TWICE compensatory damages

  • Remember: Can show a defense that it wasn’t protected adequately

 

III.     Jake Larkins – Personal Jurisdiction and Venue in Contracts

 

If there is no agreement provision conferring venue, then:

  1. Long-arm statute met; or
  2. Transacts any business within the State

 

2005: Allows transaction within the State to go beyond any contractual contact, and to fullest allowable procedural due process extent

 

  1. Has nonresident purposefully transacted some business in State;
  2. Does contact arise from it; AND
  3. Does exercise of jurisdiction offend traditional notions of substantial justice?

 

Georgia Courts read the Georgia long-arm statute through lens of 14th Amendment.

 

Subject-matter jurisdiction:

  • OF COURSE no agreement between parties that confers subject-matter jurisdiction on any court

Venue, on the other hand:

  • General rule is suit in County of Defendant’s residence,
  • BUT – businesses in any county where they have office or do business; and
  • General corporations is where they have a R.O., but in contract actions also where contract was MADE
  • Remember: Venue CAN be waived, but raise objections to it EARLY!!!!

 

  • Forum-selection clauses:
  1. Mandatory
  • Doesn’t need to be designated SPECIFICALLY before action arises (ex. Clause that specifies that it will be brought in some particularly-described place without naming a particular forum)

VERSUS

 

  1. Discretionary
  • Consent to the idea that it could be brought there but doesn’t REQUIRE that it be brought there
  • If it is subject to an exception (such as forum non conveniens – but remember that this wasn’t explicitly adopted until 2005), then can overcome it with adequate showing

 

Forum non conveniens:

  •    There are SEVEN enumerated factors in the statute, and it USED TO BE that a failure to make any of the specific findings was automatic reversal;
  • However, the Georgia Supreme Court went the other way in the past couple of years (not fatal to fail to find them, as long as central findings are correct)
  • What the recent rulings of the Supreme Court show is a definite opposition to any CUT AND DRIED rules; there are no YES/NO issues!!!

 

Choice of Law Provisions:

  • Default rule has always been lex loci contractus
  • To determine where contract was made, courts ask where the last act essential to formation of complete contract happened
  • Parties that intend to rely on law of other State must affirmatively state that up front in litigation, or Georgia law will be used!!!!
  • They CAN be waived, and it is not reversible error if trial court fails to apply it and it wasn’t timely raised.
  1. Don’t affect application of procedural laws of Georgia; and
  2. Georgia courts will decline to apply another State’s laws if doing so would contravene Georgia public policy!

 

Miller, Georgia Court of Appeals (recent case):   Court held that arbitration provision was void because arbitratrion body specified was unavailable; court went with the integral term idea (a single arbitration provider was specified, and could not be substituted)

 

IV.      Hank Fellows – Attorney’s Fees in Contract Litigation

 

Recovery answer is ALWAYS “It depends”!!!!

 

Contract:        Is there a “prevailing party clause”?

  • Prevailing rule is that in the absence of a contract provision specifying it, each side bears their own fees
  • § 13-1-11 and § 13-6-11 – see pages 3 and 4 of the outline
  • § 13-1-11 is about “notes” (debtor gets certain specifics, 10-day notice, etc.) – Whenever client gets a letter notice, compare to statute to find out if debt notice is properly made (absolute defense)
  • BAD FAITH statute (13-6-11): must make a special plea or prayer under the statute specifically; quote statute itself
    • Remember that issues relating to attorney’s fees are issues for a jury to decide, and cannot be decided on summary judgment (generally)
    • Remember: Conduct must be related to the UNDERLYING TRANSACTION (not the litigation)
    • Also remember: Can only get attorney’s fees for the successful claims, and not for flaky ones

 

Remember: Cannot recover attorney’s fees for defense of a case (responding to a counterclaim, for instance); must segregate them out!

 

WHAT MUST BE REMEMBERED – NO MATTER WHAT, KEEP TRACK OF TIME AND MAKE IT ALL “REASONABLE AND NECESSARY”!!! – check the outline for an example of this (declaration form; redacted statement as an example) – if there are any counterclaims, want to affirmatively state that you have accounted for time spent on defense; same for any claims that were dismissed, etc.

 

Pages 12-16: Recovering Attorney’s Fees in Federal Court

  • Ex. Title VII Case:   Afterwards, separate hearing on reasonableness, etc., of fees; BUT
  • For diversity cases, remember to identify expert witnesses for attorney’s fees
  • See p. 15 (disastrous b/c no expert was identified early-on in case on attorney’s fees)
  • When you do “supplemental disclosures”, identify yourself as an expert for that purpose, as well; tell opposing counsel if you are seeking attorney’s fees, and agreement between the two parties (or get a ruling) that you don’t have to statement showing strategy!!!!
  • Also, FRCP Rule 15

 

Remember:   For attorney’s fees under contract, cannot get them unless you SPECIFICALLY PLEAD FOR THEM!!!!

 

By the way, if you are a Defendant, you ALWAYS WANT TO SAY that there is a “bona fide dispute” (it is a complete defense for summary judgment purposes)!

 

Remember: In attorney-client agreement, if using an alternative fee arrangement, specify in the agreement that neither the client nor the attorney are bound by ONLY those fees (if full fees available from claim).

 

Recommended: For 13-6-11, separate count of Complaint!!!!

 

V.   Judge J. Stephen Schuster – Litigating Contract Cases/Preserving Record for Appellate Review

 

The only rights you have are the rights you assert – so FILE MOTIONS!!!!

 

MAKE SURE – when you use something as an exhibit, like a page from a deposition, etc., MAKE SURE YOU HAVE ALSO FILED A COPY IN THE RECORD!!!!!

 

MAKE SURE THERE IS A COURT REPORTER!!! (if it is important, then get it ON THE RECORD)

 

Jury selection:      Remember that you are not so much picking the juror you want as cutting out everyone else!!!

 

Batson challenges – good reason to have a court reporter present

  • Do NOT speed-talk!

 

If video evidence used – have court reporter narrate what happens in the video.

If a sidebar – bring the court reporter over

If evidence is excluded (objection sustained); it goes into the Court record, even if it is excluded from the jury record!

If a deposition is referred to, make sure a whole copy of the deposition goes into the record!

Remember – if power-point, etc., is used, the record needs to reflect that witness interacted with it, and how (“Let the record reflect that the Witness has identified POINT A”)

 

VI.      Denny C. Galis – Mediation in Today’s Marketplace

 

Attorney’s fees – “No, your Honor – no reasonable lawyer would have brought this case!”

 

VII.    Jake Larkins – Equitable Remedies in Contract

Specific performance:          Not going to be ordered if contract is shown to be unfair or unjust or against good conscience

 

A party seeking specific performance of a contract needs to show substantial compliance on their part

 

Tender can be waived – other party must repudiate it by act or by word(!!!!)

 

Other party causing nonperformance by initial party excuses that party’s nonperformance.

 

Specific Performance (§ 23-2-130):

Specific performance of a contract, if within the power of the party, will be decreed, generally, whenever the damages recoverable at law would not be an adequate compensation for nonperformance.

 

Remember § 13-5-4 on mutual mistakes.

 

THE LAWS OF CONTRACT DEVIATE FROM INTERPRETATION OF DIVORCE SETTLEMENTS:

  • In contract, even innocent fraud is breach of contract;
  • In divorce, contract breach CANNOT be immaterial!

 

§ 23-2-21:

(a) A mistake relievable in equity is some unintentional act, omission, or error arising from ignorance, surprise, imposition, or misplaced confidence.

(b) Mistakes may be either of law or of fact.

(c) The power to relieve mistakes shall be exercised with caution; to justify it, the evidence shall be clear, unequivocal, and decisive as to the mistake.

 

So, how can this be reconciled?

 

  • If it is IMMATERIAL, Contract cannot be rescinded.  Breach has to be so material that it goes to the very essence of the contract to rescind it.

 

HOW IS AN “ACCIDENT” DIFFERENT FROM A “MISTAKE”?

 

VIII.  Thomas Mews – “Recent Developments in Restrictive Covenants”

 

See OCGA § 13-8-53 (Restrictive Covenants/Noncompete rules)

 

2009 – HB 173

  • Intended to make restrictive covenants easier to enforce
  • Allows General Assembly to uphold contracts that restrict trade
  • Contained no effective date; this was fixed by HB 30
  • Re-enacted by HB 30 (2011) – applies to new contracts post-May 11, 2011

 

Nitro-Lift, 133 S.Ct. 500 (2012):

  • Uphold even restrictive covenants in contracts that are otherwise fair

 

Protz, 2013 WL 1898142:

  • Public policy difference between Georgia and Ohio, and simply required first examination of Ohio law to see if conflict provisions gave deference to Georgia public policy insistence

 

THE MATERIALS LIST ALL OF THE CASES, BY CITATION, BUT DO NOT SAY WHAT THE CASES ARE ABOUT.

 

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