Hatcher Management Holdings, LLC v. Alston & Bird, LLP

CourtCourt of Appeals of Georgia
DecidedMay 22, 2020
DocketA20A0218
StatusPublished

This text of Hatcher Management Holdings, LLC v. Alston & Bird, LLP (Hatcher Management Holdings, LLC v. Alston & Bird, LLP) is published on Counsel Stack Legal Research, covering Court of Appeals of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hatcher Management Holdings, LLC v. Alston & Bird, LLP, (Ga. Ct. App. 2020).

Opinion

FIFTH DIVISION REESE, P. J., MARKLE and COLVIN, 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. Please refer to the Supreme Court of Georgia Judicial Emergency Order of March 14, 2020 for further information at (https://www.gaappeals.us/rules).

May 21, 2020

In the Court of Appeals of Georgia A20A0217, A20A0218. ALSTON & BIRD, LLP v. HATCHER MANAGEMENT HOLDINGS, LLC; and vice versa.

COLVIN, Judge.

This is the second appearance of this legal malpractice matter before this Court.

In a prior interlocutory appeal, we held that to the extent that defendant Alston & Bird

could prove that nonparties such as Maury Hatcher, the former manager of plaintiff

Hatcher Management Holdings (HMH), breached a duty proximately causing injury

to HMH, the jury would be allowed “to assign ‘fault’ to” Maury. (Punctuation

omitted.) Alston & Bird LLP v. Hatcher Management Holdings, LLC, 336 Ga. App.

527, 530 (785 SE2d 541) (2016) (“Hatcher I”), quoting Zaldivar v. Prickett, 297 Ga.

589, 604 (2) (774 SE2d 688) (2015). After finding Maury 60% at fault, a jury

awarded HMH compensatory damages, interest, and attorney fees totaling more than $2.1 million. On the rationale that the jury had found Alston & Bird only 32% at

fault, the trial court reduced HMH’s award to $683,522.07.

On appeal in Case No. A20A0217, Alston & Bird argues that the evidence was

insufficient on the issue of proximate cause and that the trial court erred when it

submitted the issue of prejudgment interest to the jury. On cross-appeal in Case No.

A20A0218, HMH argues that the trial court’s reduction of HMH’s compensatory and

attorney fee awards was erroneous and that the court erred in granting Alston &

Bird’s motion in limine concerning proceedings in prior litigation involving Maury

Hatcher. We affirm the jury’s verdict, but we reverse and remand with direction as

to prejudgment interest, compensatory damages, and attorney fees.

Where a jury returns a verdict and it has the approval of the trial judge, the same must be affirmed on appeal if there is any evidence to support it as the jurors are the sole and exclusive judges of the weight and credit given the evidence. The appellate court must construe the evidence with every inference and presumption in favor of upholding the verdict, and after judgment, the evidence must be construed to uphold the verdict even where the evidence is in conflict. As long as there is some evidence to support the verdict, the denial of defendant’s motion for new trial will not be disturbed.

2 (Footnote omitted.) Quay v. Heritage Financial, Inc., 274 Ga. App. 358, 362-363 (4)

(617 SE2d 618) (2005).

Thus viewed in favor of the verdict, the record shows that in 2000, Maury

Hatcher hired Alston & Bird and its partner, Jack Sawyer, to form and represent

HMH, a holding company for the Hatcher family fortune. Sawyer prepared HMH’s

operating agreement and presented it to family members at a March 2001

organizational meeting. The operating agreement included provisions that any

member “shall have the right at any time, for any purpose reasonably related to such

[m]ember’s [m]embership [i]nterest, to inspect and copy from [the company’s] books

and documents,” and that the manager(s) would be responsible for delivering a yearly

“profit and loss statement” and “a balance sheet” representing the “financial condition

of the [c]ompany as of the date indicated[,]” as well as quarterly “statement[s]

showing the amounts distributed to each [m]ember during [each] calendar quarter”

of the fiscal year. (Emphasis supplied.) The family members signed the operating

agreement even though it did not list the individual members’ ownership interests (as

was the norm in such agreements), but did allow Maury to see such information (as

empowered at Maury’s request). Sawyer did not point out these features to the

members present at the organizational meeting.

3 For the next seven years, Maury managed HMH and was the only member in

regular contact with Sawyer. Starting in 2005, however, Maury began embezzling

company funds, eventually paying himself $876,500 in compensation and $218,000

in distributions. In the spring of 2008, other family members, including Maury’s

brother Jerry, raised concerns about a lack of information about company affairs. In

response to these concerns, and at Maury’s request, Sawyer issued a May 2008 letter

describing Maury’s broad authority but not responding to members’ requests to see

company records.

On June 5, 2008, Maury sent a letter to Jerry asking him to withdraw from

HMH. On July 21, Maury sent a second letter to Jerry saying that Sawyer had

“indicated” that Jerry was not entitled to information about members’ ownership

interests and income. At trial, HMH’s expert witness testified that this statement was

incorrect and that the members’ ownership interests should have been disclosed to

Jerry.

At a family meeting held on August 2, 2008, Maury’s brother Barry asked

Maury why members “weren’t being allowed to see information” about members’

draws or pay, objecting that “we have no way [of] having checks and balances” over

Maury’s management and “simply take your word for it.” When Maury assured Barry

4 that the operations of the company were “reconciled,” Barry said that “all the

members except you have tunnel vision and cannot know” whether the company’s

affairs were being conducted equitably and in accordance with “the rules and

bylaws.” Barry then raised the possibility of calling in his own accountant to ask

Maury about the company’s affairs, but Maury said that he would “not necessarily”

respond to such inquiries. Barry again asked for a listing of the members’ “percentage

ownership and the amount they draw every year,” but Maury again responded that

this was “not appropriate.”

In the course of and following this exchange, Sawyer confirmed that members

could have the information only if there were majority approval for replacing Maury

or full disclosure, or if the other members “went to [c]ourt” and obtained a ruling to

“compel Maury to turn that information over[.]” Sawyer also suggested that “full

disclosure” would cost the family “$25,000 a year.” As we have noted, however, the

operating agreement required the manager to provide members with “a statement

showing the amounts distributed to each [m]ember . . . for each previous calendar

quarter during the fiscal year.” Sawyer testified at trial that he did not recall this

provision and its reporting requirements when he advised the members as he did, and

that he did not refer to the agreement or its terms at the August 8 meeting,

5 In the weeks following the meeting, Maury discussed redeeming his and his

immediate family’s interest in HMH with Sawyer at least three times, and also told

Sawyer that he planned to move to Florida. On October 31, Maury redeemed his

family’s interests, paying himself $397,000 more than they were worth. Neither

Sawyer nor Maury disclosed the redemption to the rest of the members before Maury

announced his resignation on January 2, 2009, soon after which he moved to Florida

and bought a house. At trial, Barry testified that if he and other family members

“[had] known [at the time of the August 2008 meeting] that we were entitled to

[HMH’s] records . . .

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