G. Douglas Paul v. Smith, Gambrell & Russell N/K/A Smith, Gambrell & Russell, LLP

• Court: Court of Appeals of Georgia
• Decided: July 16, 2013
• Docket: A13A0227
• Status: Published

Opinion

SECOND DIVISION BARNES, P. J., MILLER and RAY, JJ.

NOTICE: Motions for reconsideration must be physically received in our clerk’s office within ten days of the date of decision to be deemed timely filed. http://www.gaappeals.us/rules/

July 16, 2013

In the Court of Appeals of Georgia

A13A0227. PAUL et al. v. SMITH, GAMBRELL & RUSSELL n/k/a SMITH, GAMBRELL & RUSSELL, LLP.

MILLER, Judge.

This is the third appeal arising out of a legal malpractice action that Appellants G. Douglas

Paul, Sharon V. Paul, Catspaw Productions, Inc., Catspaw, Inc., Atlanta Catco, Inc., and Recording

Studio, Inc. commenced against Smith, Gambrell & Russell (“Smith Gambrell”) in 2002. See Paul

v. Smith, Gambrell & Russell, 267 Ga. App. 107 (599 SE2d 206) (2004) (“Paul I”); Paul v. Smith,

Gambrell & Russell, 283 Ga. App. 584 (642 SE2d 217) (2007) (“Paul II”). In Paul II, the parties

filed cross-appeals from the trial court’s April 11, 2005 order granting in part and denying in part

Smith Gambrell’s second motion for summary judgment. 283 Ga. App. at 584-585. For the next five

years after the April 11, 2005 order, no written order was entered in the trial court. On July 12, 2011,

the trial court entered an order memorializing the automatic dismissal of the case pursuant to OCGA

§§ 9-2-60 (b) and 9-11-41 (e), concluding that more than five years had elapsed since the last order

was entered in the case. On appeal, Appellants argue, among other things, that the five-year period was tolled during the pendency of the cross-appeals in Paul II. Finding this and Appellants’ other

arguments unavailing, we affirm.

This appeal presents a question of law subject to de novo review. See Jinks v. Eastman

Enterprises, Inc., 317 Ga. App. 489, 489-490 (731 SE2d 378) (2012).

As recounted in greater detail in Paul II, Appellants’ action arises out Smith Gambrell’s

representation of Appellants prior to and during a lawsuit Ralph Destito, a shareholder of Recording

Studio, Inc. (“RSI”) and a former employee of Catspaw Productions, Inc. (“CPI”), commenced

against Appellants for fraud, breach of fiduciary duty, and related claims (the “Destito action”). 283

Ga. App. at 584-587. The Destito action resulted in a substantial verdict and judgment against

Appellants, and the judgment was affirmed on appeal.1 Id. at 584

In the first of two motions for summary judgment in the present case, Smith Gambrell sought

summary judgment on the issue of punitive damages and its liability for failing to call an accounting

expert at trial in the Destito action, and the trial court granted its motion on both issues. See Paul I,

supra, 267 Ga. App. at 107-108. On appeal, this Court affirmed on the issue of punitive damages but

reversed as to the claim for failure to call an accounting expert. Id. at 108. Prior to the decision in

Paul I, Smith Gambrell filed its second motion for summary judgment on the issues of its alleged

malpractice in preparing documents to merge RSI into CPI and subsequent Articles of Correction

to reverse the merger and its failure to prepare the Pauls to testify at trial in the Destito action. Smith

Gambrell’s second motion did not address the claim regarding the failure to call an accounting

1 See Paul v. Destito, 250 Ga. App. 631 (550 SE2d 739) (2001).

2 expert, as the trial court had granted summary judgment in its favor on that claim.

In its April 11, 2005 order, the trial court granted Smith Gambrell summary judgment on the

issue of failing to prepare the Pauls for trial but denied summary judgment on the issue of Smith

Gambrell’s failure to exercise reasonable care in preparing the merger documents. The parties filed

cross-appeals, and this Court affirmed the April 11, 2005 order. Paul II, supra, 283 Ga. App. at 585.

No written order was entered in the record following the April 11, 2005 order until an order

was entered on December 13, 2010 specially setting the matter for trial. After a jury was empaneled

on April 12, 2011, the trial court declared a mistrial, finding that Appellants failed to identify one

of its claims and supporting expert opinions during discovery. Smith Gambrell subsequently moved

to strike the action from the docket under OCGA §§ 9-2-60 (b) and 9-11-41 (e), and the trial court

entered an order memorializing the automatic dismissal of the case.

1. Appellants argue the trial court erred in concluding that its action was dismissed by

operation of law because the five-year period under OCGA §§ 9-2-60 (b) and 9-11-41 (e) was tolled

during the pendency of the cross-appeals in Paul II. We disagree.

“OCGA §§ 9-2-60 (b) and 9-11-41 (e) are the statutory embodiment of the ‘five-year rule.’

Together, they provide for the automatic dismissal of any action filed in a Georgia court of record

when ‘no written order is taken for a period of five years[.]’” Zepp v. Brannen, 283 Ga. 395, 396

(658 SE2d 567) (2008). The five-year rule is “a reasonable procedural rule” that serves “the dual

purpose of preventing court records from becoming cluttered by unresolved and inactive litigation

and of protecting litigants from dilatory counsel.” (Citation and punctuation omitted.) Brown v.

Kroger Co., 278 Ga. 65, 68 (597 SE2d 382) (2004). These Code sections are mandatory, and

3 dismissal occurs by operation of law. Republic Claims Svc. Co. v. Hoyal, 264 Ga. 127, 128 (441

SE2d 755) (1994); Roberts v. Eayrs, 297 Ga. App. 821, 822 (2) (678 SE2d 535) (2009). We apply

a bright-line rule for determining whether an order is sufficient to reset the five-year clock. Windsor

v. City of Atlanta, 287 Ga. 334, 336 (2) (695 SE2d 576) (2010). “[I]n order to toll the running of the

five-year period that results in automatic dismissal for non-action, an order must be written, signed

by the trial judge, and properly entered in the records of the trial court by filing it with the clerk.”

(Citation and punctuation omitted.) Id.

Here, it is undisputed that more than five years elapsed following the entry of the April 11,

2005 order before another written order was entered in the record. Appellants attempt to avoid the

otherwise straightforward application of the five-year rule by arguing that the five-year period was

tolled for 22 months while the April 11, 2005 order was on appeal in Paul II because a supersedeas

was in effect pursuant to OCGA § 5-6-46 (a), depriving the trial court of jurisdiction. We have

recognized that the five-year period may be tolled under certain circumstances when a trial court

completely loses jurisdiction over a case. See, e.g, Jinks, supra, 317 Ga. App. at 491 (bankruptcy

stay); Southern Bell Tel. & Tel. Co. v. Perry, 168 Ga. App. 387, 388 (308 SE2d 848) (1983)

(removal to federal court). It is well-established, however, that “[t]he supersedeas that stems from

the filing of [a] . . . notice of appeal is limited in that it supercedes only the judgment appealed; it

does not deprive the trial court of jurisdiction as to other matters in the same case not affecting the

judgment on appeal.” (Citation and punctuation omitted.) Avren v. Garten, 289 Ga. 186, 190 (6) (710

SE2d 130) (2011).

Appellants argue that the trial court was divested of all jurisdiction in the case during the

4 Paul II cross-appeals because Smith Gambrell’s second motion for summary judgment stated that

Smith Gambrell was entitled to summary judgment on the “entire case.” Once this Court issued its

decision in Paul I reinstating Appellants’ claim regarding the failure to call an accounting expert,

however, it was apparent that a portion of Appellants’ case would remain pending even if Smith

Gambrell prevailed on its second motion for summary judgment. As such, the trial court had

jurisdiction to proceed with at least part of the case during the pendency of the cross-appeals, see

Craft’s Ocean Court, Inc. v. Coast House, Ltd., 255 Ga. 336, 337 (2) (338 SE2d 277) (1986), and

we conclude that no tolling of the five-year period occurred.2

Nelson v. Haugebrook, 282 Ga. App. 399 (638 SE2d 840) (2006), upon which Appellants

rely, does not support a contrary result. In Nelson, we held that the five-year period was not tolled

in between the time a certificate of immediate appellate review of an interlocutory order was filed

in the trial court and the appellant’s application for interlocutory review was denied. 282 Ga. App.

2 In their reply brief Appellants argue that due to statements in Smith Gambrell’s Appellant’s Brief in Paul II, as to the scope of the merger-related issues on appeal, Appellants reasonably believed the “entire case” was before this Court, and, as a result, the five-year period was tolled, at a minimum, for the eight months between the filing of Smith Gambrell’s brief and the remittitur from this Court. Given that the claim regarding the failure to call an accounting expert was indisputably still pending in the trial court, Appellants’ alleged belief that the entire case was on appeal was not reasonable. In any event, an alleged mistaken impression as to the issues on appeal would not relieve Appellants of the duty to ensure that a written order signed by the trial judge was entered in the record. See Willis v. Columbus Medical Center, Inc., 306 Ga. App. 331, 333 (702 SE2d 673) (2011) (counsel’s mistaken belief that Office of Dispute Resolution filed mediation order with clerk, as was its usual practice, could not prevent dismissal).

5 at 401-402 (1) (b). Since the application was denied, the appellant in Nelson, never filed a notice of

appeal effecting a supersedeas, and no loss of jurisdiction occurred. Id. at 402 (1) (b). In Nelson, we

did not address whether a supersedeas would provide a basis for tolling the five-year period, and

indeed, we acknowledged that a supersedeas effects a loss of jurisdiction only “as to matters

contained within the appeal.” (Footnote omitted.) Id.

2. Relying on Simmerson v. Blanks, 183 Ga. App. 863 (360 SE2d 422) (1987), Appellants

contend that the Court should reverse the trial court’s dismissal order to avoid a “manifest injustice.”

We disagree. In Simmerson, the trial court dismissed an action under the five-year rule, concluding

that a prior continuance order that would have prevented dismissal was invalid because it was

entered ex parte and without a written motion. Id. This Court disagreed that the continuance order

was invalid and applied the rule that a trial judge may not revoke a granted continuance where

“manifest injustice would result.” (Citation and punctuation omitted.) Id. at 864. The Court

concluded that revocation would result in a manifest injustice because revocation occurred three

years after the continuance was granted and five years had passed from the last written order prior

to the continuance order. Id. No similar circumstances are present here, and the trial court in this case

did not enter any order at all for a period in excess of five years after the April 11, 2005 order.

3. Appellants also rely on Jefferson v. Ross, 250 Ga. 817 (301 SE2d 268) (1983), to argue

that dismissing their case would not serve the purposes of the five-year rule. In Jefferson, the

Supreme Court of Georgia held that a trial court’s authority to enter judgment at any time after a jury

verdict is not extinguished by the passage of five years from the date of the verdict, finding that “the

reasons behind the Code sections . . . no longer exist once the case has been prosecuted to verdict.”

6 Id. at 818. Jefferson stands for the proposition that the five-year rule “applies to cases awaiting

disposition, not to cases already adjudicated by verdict or judgment.” (Citations omitted.) Lott v.

Arrington & Hollowell, P.C., 258 Ga. App. 51, 55 (2) (b) (572 SE2d 664) (2002). Appellants’ action

never proceeded to verdict. Further, the issue here is not the passage of five years following a

disposition in the case. Rather, five years passed without a written order before this case was set for

trial. Since the case was automatically dismissed as a matter of law, a trial and verdict would have

been a “mere nullity.” (Citations omitted.) Goodwyn v. Carter, 252 Ga. App. 114, 116 (555 SE2d

474) (2001). The holding in Jefferson cannot save Appellants’ action from automatic dismissal.

4. Finally, Appellants cite to news stories reporting that the trial judge’s case manager had

engaged in misconduct such as discarding original orders and pleadings and hiding files in a utility

closet. They argue that “[w]hile there is no evidence that any files related to this case were

discovered [in the closet], a reasonable probability exists that [the] case manager hid or threw away

orders in this case.” While the accounts that Appellants reference are disturbing, “[t]he mandatory

duty . . . falls upon the plaintiff to obtain a written order and have it entered upon the record to

prevent an automatic dismissal.” (Footnote and punctuation omitted.) Roberts, supra, 297 Ga. App.

at 822 (2). As it was Appellants’ responsibility to obtain and file an order, they cannot avoid

dismissal by speculating about unspecified orders that were possibly mishandled by a court

employee.

Judgment affirmed. Barnes, P. J., and Ray, J., concur in judgment only.