FIFTH DIVISION MCFADDEN, P. J., RAY and RICKMAN, 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
June 27, 2018
In the Court of Appeals of Georgia A18A0217. HA&W CAPITAL PARTNERS, LLC et al. v. BHANDARI et al.
MCFADDEN, Presiding Judge.
This dispute arose when a group of registered representatives resigned from
one financial services firm to join another. Central to this dispute is the interplay
between their former employment agreements, which contained notice provisions
limiting their ability to move from one firm to another, and the Protocol for Broker
Recruiting, whose purpose is to facilitate such movement and to which both financial
services firms had been signatories. That interplay is complicated by the fact that the
former employer was undertaking to withdraw from the protocol as the registered
representatives were undertaking to change firms. The central issue before us today is whether the protocol invalidates provisions in those employment agreements
requiring the registered representatives to give advance notice of their resignations.
This appeal challenges trial court orders granting and denying various cross
motions for summary judgment on the parties’ respective claims and counterclaims.
Because the unambiguous language of the protocol does not invalidate the notice
provisions at issue, the trial court erred in finding otherwise. So we reverse the grant
of summary judgment that had disposed of the appellant former employer’s breach
of contract claim on the basis of that erroneous finding. The court’s other summary
judgment rulings premised on that erroneous finding require further consideration
below, so we vacate those rulings and remand with direction.
Also before us are attorney fee counterclaims. We reverse the denial of
summary judgment to the appellant former employer on the appellee registered
representatives counterclaim for attorney fees under OCGA § 13-6-11 because such
fees are not recoverable for compulsory counterclaims. But, there are genuine issues
of material fact as to the appellees’ counterclaims for attorney fees under a
contractual provision, so we affirm the trial court’s denial of summary judgment to
the appellant former employer on that counterclaim. Likewise, because there are
genuine issues of material fact as to the counterclaims for wrongful injunctive relief,
2 deferred compensation, and conversion, we affirm the trial court’s denial of summary
judgment to the appellant former employer on those counterclaims.
1. Facts and procedural posture.
Summary judgment is proper “if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show that
there is no genuine issue as to any material fact and that the moving party is entitled
to a judgment as a matter of law[.]” OCGA § 9-11-56 (c). “On appeal, we review the
grant or denial of summary judgment de novo, construing the evidence and all
inferences in a light most favorable to the nonmoving party.” Seki v. Groupon, Inc.,
333 Ga. App. 319 (775 SE2d 776) (2015) (citation omitted).
So construed, the evidence shows that Niraj Bhandari, David Austin, Lisa
Schiffer, and Christopher Wynne entered into employment agreements with HA&W
Capital Partners, LLC. HA&W Capital is a holding company whose operating
subsidiaries include HA&W Wealth Management, LLC, an investment advisory firm.
Pursuant to the employment agreements, Bhandari, Austin, Schiffer, and Wynne
worked as registered representatives with HA&W Wealth, providing financial advice
to clients.
3 The employment agreements contained notice provisions regarding an
employee’s voluntary termination of his or her employment. The notice provisions
in Austin, Schiffer, and Wynne’s respective contracts stated that each of them “shall
have the right to voluntarily terminate [his or her] employment for any reason, at any
time, upon ninety (90) days prior written notice to [HA&W Capital].” Bhandari’s
contract contained virtually the same provision, except that it provided for 60 days
notice instead of 90 days.
On March 26, 2017 HA&W Capital transmitted a letter withdrawing from the
Protocol, effective April, 5, 2014. HA&W Capital subsequently undertook to make
that withdrawal retroactive.
On April 4, 2014, Bhandari, Austin, Schiffer, and Wynne all terminated their
employment with HA&W Capital without providing written notice and immediately
commenced employment at Morgan Stanley Smith Barney, LLC (hereinafter “Morgan
Stanley”). That same day, HA&W Capital filed a complaint and obtained an ex parte
temporary restraining order preventing Bhandari, Austin, Schiffer, and Wynne from
contacting any clients of HA&W Capital, from accessing any information system of
HA&W Capital, and from destroying documents or electronically stored information
4 relating to HA&W Capital’s business. Five days later, on April 9, 2014, the trial court
entered an order dissolving the temporary restraining order.
HA&W Capital amended the complaint, adding HA&W Wealth and other
affiliated companies as plaintiffs (collectively, “HA&W”), and adding Morgan
Stanley and Dorothy Stanton, another former HA&W Wealth employee, as
defendants. The amended complaint included a claim for breach of contract against
Bhandari, Austin, Schiffer, and Wynne (collectively, “the former employees”) for
violating the notice of termination provisions of their respective employment
agreements. The defendants jointly filed an answer and counterclaims. The former
employees’ first counterclaim was for breach of contract based on allegations that
HA&W had breached the Protocol for Broker Recruiting, an agreement between
various investment firms.
The parties filed cross motions for summary judgment. After a hearing, the trial
court entered three separate summary judgment orders. Its first order is entitled
“Order on Cross-Motions for Partial Summary Judgment – Advance Notice
Provisions and the Protocol for Broker Recruiting.” In that order the trial court ruled
on the former employees’ motion for summary judgment on HA&W’s breach of
contract claim that the former employees had violated the notice provisions in their
5 employment agreements; the former employees’ motion for summary judgment on
their counterclaim that HA&W had breached the protocol; HA&W’s motion for
summary judgment on its claim that the former employees had breached the notice
provisions; and HA&W’s motion for summary judgment on the counterclaim that
HA&W had breached the protocol.
In that order, the trial court stated that “the operative question in these [four]
motions is whether the [p]rotocol applies and precludes [the former employees’]
liability as to the advance notice provisions.” The trial court then analyzed and
rejected HA&W’s various arguments as to why the protocol should not apply. The
trial court then found as a matter of law that the protocol precludes any liability based
on the notice of termination provisions in the employment contracts. Based on its
finding that the protocol precludes liability under the notice provisions, the trial court
granted summary judgment in favor of the former employees on HA&W’s breach of
contract claim; granted summary judgment in favor of the former employees on their
breach of the protocol counterclaim; denied summary judgment to HA&W on its
breach of contract claim; and denied summary judgment to HA&W on the breach of
the protocol counterclaim.
6 In its other two orders, the trial court ruled on the parties’ summary judgment
motions concerning other claims and counterclaims. Among other rulings, the trial
court denied summary judgment to HA&W on the former employees’ counterclaims
for wrongful injunctive relief, deferred compensation, conversion, and attorney fees.
HA&W appeals.
2. First summary judgment order: protocol and notice issues.
In its first enumeration of error, HA&W has included the four summary
judgment rulings set forth in the trial court’s first order and refers to these four rulings
collectively as the “Protocol Orders.” In the same way that the trial court did not
separately analyze the four motions for summary judgment before it, and instead
premised all four of its rulings on those motions on the same “operative” finding
regarding the applicability and effect of the protocol, HA&W has not set forth
separate arguments challenging each ruling, and instead has relied on the same
arguments to challenge the rulings collectively.
But the trial court’s analysis regarding the protocol precluding the notice
provisions was flawed: the protocol does not categorically invalidate notice
provisions in employment agreements. So each of the rulings must be analyzed
separately. In doing so, we reverse the grant of summary judgment to the former
7 employees on HA&W’s breach of contract claim. The other three rulings in the first
order – the denial of summary judgment to HA&W on its breach of contract claim,
the denial of summary judgment to HA&W on the former employees’ breach of
contract counterclaim, and the grant of summary judgment to the former employees
on their breach of contract counterclaim – must all be vacated and remanded for
further consideration.
(a) Summary judgment to former employees on breach of contract claim.
HA&W contends that the trial court erred in granting summary judgment in
favor of the former employees and against HA&W on its breach of contract claim that
the former employees had violated the notice provisions of their employment
agreements. We agree.
In its order, the trial court recited the contract provisions for each of the former
employees requiring either 60 or 90 days prior written notice of termination, and the
court further found that “[t]here is no dispute that Defendants Bhandari, Austin,
Schiffer, and Wynne . . . all voluntarily terminated their employment with HA&W
Capital on April 4, 2014, without providing any prior written notice to HA&W
Capital[.]” Nevertheless, the trial court concluded that the former employees were
entitled to summary judgment on the breach of contract claim on the ground that the
8 protocol, to which HA&W Wealth and Morgan Stanley were signatories,1 precluded
any liability as to the notice provisions. That conclusion was erroneous.
“The Protocol for Broker Recruiting is an agreement among [a number of]
firms in the securities industry.” Credit Suisse Securities (USA) LLC v. Tracy, 812
F3d 249, 252 n. 8 (2d Cir. 2016) (punctuation omitted). It provides:
The principal goal of the following protocol is to further the clients’ interests of privacy and freedom of choice in connection with the movement of their Registered Representatives (“RRs”) between firms. If departing RRs and their new firm follow this protocol, neither the departing ¶ nor the firm that he or she joins would have any monetary or other liability to the firm that the ¶ left by reason of the ¶ taking the information identified below or the solicitation of the clients serviced by the ¶ at his or her prior firm, provided, however, that this protocol does not bar or otherwise affect the ability of the prior firm to bring an action against the new firm for “raiding.” The signatories to this protocol agree to implement and adhere to it in good faith. (Emphasis in original.)
The protocol then identifies the following limited information that registered
representatives may take with them when moving to a new firm: “client name,
address, phone number, email address, and account title of the clients that they
1 We note that it appears from the record and the parties’ briefs that both HA&W and Morgan Stanley are no longer signatories to the protocol.
9 serviced while at the firm[.]” The departing registered representatives “are prohibited
from taking any other documents or information.” The protocol further requires that
the “[r]esignations will be in writing delivered to local branch management and shall
include a copy of the Client Information that the ¶ is taking with him or her. The ¶ list
delivered to the branch also shall include the account numbers for the clients serviced
by the ¶.”
The trial court noted that it could find no Georgia cases addressing the protocol
and no cases in any other jurisdiction dealing with the specific issue of whether the
protocol precludes enforcement of a notice of termination provision in an
employment contract of a registered representative leaving one firm for another. The
trial court recognized that resolution of that issue in this case turns on construction
of the protocol.
“[C]ontract disputes are particularly well suited for adjudication by summary judgment because construction of contracts is ordinarily a matter of law for the court. It is well established that contract construction . . . begin[s] with the trial court’s determination as to whether the language is clear and unambiguous. If no construction is required because the language is clear, the court then enforces the contract according to its terms.
Y. C. Dev. v. Norton, 344 Ga. App. 69, 72-73 (1) (806 SE2d 662) (2017) (citations
and punctuation omitted). Here, the trial court correctly determined that the protocol’s
10 language is clear and unambiguous. “[A] court may not strain to find an ambiguity
and must enforce an unambiguous contract as written.” Ayers v. Assn. of County
Commrs. of Georgia-Interlocal Risk Mgmt. Agency, 332 Ga. App. 230, 235 (1) (771
SE2d 743) (2015) (citation and punctuation omitted). And the trial court properly
rejected HA&W’s attempt to withdraw from the protocol retroactively, its argument
that its corporate structure rendered its participation illusory, and its argument that
the RRs failed to substantially comply with their obligation under the protocol to
provide certain information with their resignations.
But trial court erred in holding that the protocol categorically invalidates notice
provisions in employment agreements. Such notice provisions are not specifically
mentioned or otherwise referenced in the protocol. And we find nothing in the
protocol’s unambiguous language that prohibits the notice provisions at issue in this
case.
So the trial court erred in ruling that HA&W’s claim for breach of the notice
provisions contravenes the express terms of the protocol. The trial court stated that
this ruling
articulates the most fundamental tenant of the [p]rotocol: if a RR moved from one [p]rotocol firm to another [p]rotocol firm they would be free to take a list of their clients’ names, addresses, telephone numbers, email
11 addresses and account types, and after they have become affiliated with the new firm, solicit all of their clients to move accounts to the RR’s new firm[.]
This fundamental tenant cited by the trial court is set forth in the protocol provision
that if registered representatives follow the protocol, then they would not have “any
monetary or other liability to the firm that [they] left by reason of [them] taking the
[client] information . . . or the solicitation of the clients serviced by [them] at [their]
prior firm[.]” (Emphasis supplied.)
However, HA&W’s breach of contract claim does not allege that the former
employees are liable by reason of taking client information or soliciting clients.
Rather, it merely alleges that the former employees are liable by reason of having
terminated their employment without giving prior notice as required by their
employment agreements. Thus, contrary to the trial court’s ruling, the action for
breach of contract seeking to enforce the notice provisions does not contravene the
express terms of the protocol.
“Georgia courts have acknowledged a cause of action for . . . an employee’s
breach of an employment contract’s requirement that he give certain notice before
terminating the contract[.]” Insight Tech. v. FreightCheck, 280 Ga. App. 19, 24 (1)
12 (a) (633 SE2d 373) (2006) (citation omitted). See Witty v. McNeal Agency, 239 Ga.
App. 554, 560-561 (4) (521 SE2d 619) (1999).
The employee’s contractual duty to provide a specified termination notice to the employer under the contract is not a restrictive covenant and does not constitute a covenant that falls along with [any] void restrictive covenants in the contract. . . . The purpose of the notice in the contract by the employee of voluntary termination is not difficult to fathom. Generally, notice by the employer is required under an employment contract so that the employee has an opportunity to seek other employment prior to actual termination of employment. Likewise, . . . [a] contract provision requiring [an employee to give] a specified prior notice of termination is reasonable to allow the employer to prepare for an orderly transition and enforceable through special damages resulting from a sudden quitting, and in the absence of special damages, nominal damages are recoverable.
Capricorn Systems v. Pednekar, 248 Ga. App. 424, 425 (1) (546 SE2d 554) (2001)
(citations and punctuation omitted).
In arguing that they are not liable for violating the notice provisions in their
employment contracts, the former employees cite to evidence supporting their
contention that the protocol prohibits such provisions. They point to a page of a
deposition given by a non-party in a matter unrelated to this case which purports to
establish the underlying intent of the drafters of the protocol. And they point to
deposition testimony of an HA&W representative about what HA&W would have
done if the RRs had given the notice specified in their employment agreements. As
13 an initial matter, we note that, as the trial court properly ruled, such extrinsic evidence
cannot be used to vary the unambiguous language of the protocol. See Simpson v.
Pendergast, 290 Ga. App. 293, 296 (1) (659 SE2d 716) (2008) (extrinsic evidence
cannot be used to vary unambiguous contract terms).
As for the deposition testimony given in 2010 by a non-party in an unrelated
case, that deponent opined that he believed “the notice period would be inconsistent
with the protocol.” But that single page of deposition testimony provides no context
explaining what notice period was being discussed and there is certainly no indication
that it pertained to the notice provisions in the employment contracts at issue in the
instant case. Moreover, such hearsay may not be considered on summary judgment.
See OCGA § 24-8-801 (c) (“‘Hearsay’ means a statement, other than one made by the
declarant while testifying at the trial or hearing, offered in evidence to prove the truth
of the matter asserted.”); R&G Investments & Holdings v. American Family Ins. Co.,
337 Ga. App. 588, 595-596 (3) (787 SE2d 765) (2016) (inadmissible hearsay should
not have been considered on summary judgment). See also General Motors Corp. v.
Moseley, 213 Ga. App. 875, 880 (3) (447 SE2d 302) (1994) (excluding deposition
testimony given in prior unrelated case where there was no meaningful opportunity
to cross-examine deponent).
14 With regard to the HA&W representative’s deposition, the deponent
acknowledged that if Bhandari had given his 60-days termination notice, HA&W
would have told him to transition the clients he was servicing to another registered
representative. But as explained above, that is the proper purpose of such a notice
provision – “to allow the employer to prepare for an orderly transition[.]” Capricorn
Systems, supra. And contrary to the former employees’ argument, a direction from
HA&W that Bhandari transition his clients to another representative during the 60-
days notice period would not have conflicted with the plain language of the protocol
allowing a registered representative to take client information and solicit clients after
joining a new firm. Bhandari certainly would have been free to do those very things
upon joining Morgan Stanley after his termination at HA&W, and per the plain
language of the protocol, any client who wanted to transfer his or her account to
Bhandari’s new firm could have done so simply by signing a specified form.
Furthermore, to the extent the notice provisions can be deemed as restrictions
on the former employees’ solicitation of clients during the notice period, such
contractual restrictions prior to the employees leaving HA&W are expressly
authorized by the protocol, which provides: “A firm would continue to be free to
enforce whatever contractual . . . restrictions exist on the solicitation of customers to
15 move their accounts by a departing RR before he or she has left the firm.” (Emphasis
supplied.) The notice provisions applied to the former employees before they left
HA&W, and therefore HA&W was free to enforce those provisions prior to their
resignations.
Because the unambiguous language in the protocol does not prohibit the notice
provisions at issue in this case, the trial court erred in ruling otherwise and in holding
that the protocol precluded liability for breach of the notice provisions. Accordingly,
the grant of summary judgment to the former employees on HA&W’s breach of
contract claim must be reversed.
We note that this ruling does not address the significance, if any, of the fact
that HA&W was undertaking to withdraw from the protocol as the RRs were
undertaking to resign. Nor does this ruling address the issue of damages. HA&W has
acknowledged that it is not seeking to hold the former employees liable for special
damages based on taking client information or soliciting clients, which would
contravene the plain language of the protocol. Its claim for damages — if indeed there
was a breach of contract — arises out of its inability to conduct an orderly transition.
And even “if there are no special damages that can be proven, then nominal damages
are recoverable.” Vara v. Essex Ins. Co., 269 Ga. App. 417, 420 (604 SE2d 260)
16 (2004) (citations omitted). “In every case of breach of contract the injured party has
a right to damages, but if there has been no actual damage, the injured party may
recover nominal damages sufficient to cover the costs of bringing the action.” OCGA
§ 13-6-6. See also Capricorn, supra (holding that if no actual damages shown for
breach of a termination notice provision, then nominal damages were still
recoverable).
(b) Denial of summary judgment to HA&W on its breach of contract claim.
As set out above, the trial court denied HA&W’s motion for summary
judgment on its breach of contract claim based on its finding that the protocol
precluded any liability under the notice provisions. But given our ruling above that
the trial court’s finding was erroneous and that the protocol does not preclude
liability, it follows that the trial court’s denial of HA&W’s motion was likewise
erroneous. Although this court can sometimes review a summary judgment ruling to
determine if it was right for some reason other than that given by the court below, this
court cannot also “consider whether the trial court was wrong for any reason.”
Strength v. Lovett, 311 Ga. App. 35, 44 (2) (b) (714 SE2d 723) (2011) (citation and
punctuation omitted). Here, the trial court has not yet considered the question of
whether, given that the protocol does not prohibit the notice provisions, there are any
17 genuine issues of material fact as to the former employees’ liability under those
provisions. Moreover, the parties have not fully argued and briefed that matter.
Accordingly, we think the question of [whether there are such genuine issues of material fact] is beyond the proper scope of our review in this case. [Cits.] See also Coweta County v. Simmons, 269 Ga. 694, 694 (507 SE2d 440) (1998) (‘Review by the Court of Appeals is limited to the scope of the ruling in the trial court as shown by the trial record’).
Strength, supra (punctuation omitted). We therefore vacate the trial court’s denial of
HA&W’s motion for summary judgment on its breach of contract claim and remand
for the court below to consider whether there are any genuine issues of material fact.
See id. at 45 (2) (b).
(c) Former employees’ counterclaim for breach of contract.
The trial court also based its rulings on the former employees’ breach of
contract counterclaim – granting summary judgment to the former employees and
denying summary judgment to HA&W – on its erroneous finding that the protocol
precluded liability under the notice provisions of the employment contracts. For the
same reason explained immediately above in Division 1 (b), it follows that those
summary judgment rulings on that counterclaim were likewise erroneous.
Moreover, we also note even if the trial court had correctly found that the
protocol precludes the notice provisions in the employment contract, such a finding
18 would not have supported the trial court’s summary judgment rulings on the breach
of contract counterclaim. That counterclaim, unlike HA&W’s breach of contract
claim, is not premised on the notice provisions. Rather, that counterclaim alleged that
HA&W had breached the protocol by violating the notice of withdrawal provision in
the protocol2 and by obtaining the ex parte temporary restraining order without
informing the trial court that it was a signatory of the protocol. Thus, merely because
the trial court found that the protocol precluded liability under the employment
contract notice provisions, it did not necessarily follow that the defendants’ were
entitled to summary judgment on their breach of the protocol counterclaim. Rather,
a determination of whether or not there existed genuine issues of material fact as to
the specific claims of how HA&W allegedly breached the protocol was still required
in order to make a summary judgment ruling. See OCGA § 9-11-56 (c). So we also
vacate the trial court’s summary judgment rulings on the former employees’ breach
of the protocol counterclaim and remand for the court below to consider whether
there are any genuine issues of material fact as to that counterclaim. See Strength,
supra.
2 The protocol provides: “A signatory to this protocol may withdraw from the protocol at any time and shall endeavor to provide 10 days prior written notice of its withdrawal to all other signatories hereto.”
19 3. Second summary judgment order on other counterclaims.
HA&W challenges the trial court’s denials, in its second order, of HA&W’s
motions for summary judgment on the former employees’ counterclaims for wrongful
injunctive relief, attorney fees, deferred compensation, and conversion.
A defendant demonstrates entitlement to summary judgment by showing that the record lacks evidence sufficient to create a jury issue on at least one essential element of the plaintiff’s case. The defendant does not need to affirmatively disprove the plaintiff’s case, but may prevail simply by pointing to the lack of evidence. If the defendant does so, the plaintiff cannot rest on his pleadings, but must point to specific evidence that gives rise to a triable issue of fact.
Keisha, LLC v. Dundon, 344 Ga. App. 278, 278-279 (809 SE2d 835) (2018) (citation
and punctuation omitted). Thus, in order to be entitled to summary judgment on the
counterclaims, HA&W, as the defendant-in-counterclaim, must show that the record
lacks evidence sufficient to create a jury issue on at least one essential element of
each of those claims.
(a) Wrongful injunctive relief counterclaim.
The defendants asserted a counterclaim for wrongful injunctive relief based on
HA&W obtaining the ex parte temporary restraining order prohibiting them from,
among other things, contacting any clients of HA&W Capital. HA&W now argues
that its corporate structure entitles it to summary judgment on that counterclaim:
20 HA&W Capital has no clients. And thus, HA&W argues, there is no evidence that the
former employees were damaged by the restraining order. First, we note that
HA&W’s argument is inconsistent with it having sought and obtained the restraining
order expressly preventing the former employees from contacting HA&W Capital’s
clients. Moreover, the former employees have pointed to evidence giving rise to
questions of fact as to whether they lost clients and were thus damaged by the
restraining order. We therefore find no error in the trial court’s denial of summary
judgment to HA&W on this counterclaim.
(b) Attorney fees counterclaim.
The former employees counterclaimed for attorney fees both pursuant to
OCGA § 13-6-11 and under a “prevailing party” provision in their employment
agreements. The trial court denied HA&W’s motion for summary judgment, finding
that there are genuine issues of material fact as to both the statutory and contractual
attorney fees. HA&W argues that the former employees are not entitled to attorney
fees on either ground.
(i) OCGA § 13-6-11.
Attorney fees under OCGA § 13-6-11 are available only to plaintiffs. The
statue provides: “The expenses of litigation generally shall not be allowed as a part
21 of the damages; but where the plaintiff has specially pleaded and has made prayer
therefor and where the defendant has acted in bad faith, has been stubbornly litigious,
or has caused the plaintiff unnecessary trouble and expense, the jury may allow
them.”
Furthermore, the award of expenses of litigation under OCGA § 13-6-11 can only be recovered by the plaintiff in an action under the language of the statute; therefore, the defendant and plaintiff-in-counterclaim cannot recover such damages where there is a compulsory counterclaim. [Cit.] See also Byers v. McGuire Properties, 285 Ga. 530, 540 (6) (679 SE2d 1) (2009) (plaintiff-in-counterclaim cannot recover attorney’s fees under OCGA § 13-6-11 unless it asserts a counterclaim which is an independent claim that arose separately from or after the plaintiff’s claim). Under the Civil Practice Act, a pleading shall state as a counterclaim any claim which at the time of serving the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party’s claim. [Cit.]
Graybill v. Attaway Constr. & Assoc., 341 Ga. App. 805, 810 (2) (a) (802 SE2d 91)
(2017) (punctuation omitted).
Here, the former employees, as plaintiffs-in-counterclaim, contend that they
may seek to recover OCGA § 13-6-11 attorney fees because their counterclaims for
defamation, deferred compensation, and an ownership interest in HA&W were non-
compulsory. But they have failed to support that conclusory statement with any
citations to the record or any explanation as to how those counterclaims are non-
22 compulsory. Our review of those counterclaims reveals that they all arise out of the
same transaction or occurrence that is the subject matter of HA&W’s claim – the
former employees’ termination of their employment at HA&W. Consequently, we
conclude that the counterclaims upon which the former employees base their claim
for attorney fees are “clearly in the nature of compulsory counterclaims and thus fees
[are] not permitted for those claims under OCGA § 13-6-11.” Graybill, supra (citation
and punctuation omitted). Accordingly, “we reverse the trial court’s denial of
summary judgment in [HA&W’s] favor on [the] claim for attorney fees under OCGA
§ 13-6-11.” Nash v. Studdard, 294 Ga. App. 845, 852 (4) (670 SE2d 508) (2008).
(ii) Prevailing party provision.
The former employees also seek attorney fees under the following provision
in their respective employment agreements with HA&W Capital: “In the event of
legal action by either party to enforce this Agreement, the prevailing party in such
action shall be entitled to recover from the other party its or his expenses of litigation
(including reasonable attorney’s fees, court costs, and expert witness fees) actually
incurred.” (Emphasis supplied.) HA&W argues that it is entitled to summary
judgment on this counterclaim because the former employees have not actually
incurred any attorney fees, pointing to deposition testimony and interrogatory
23 responses from the former employees that Morgan Stanley was at that time paying for
such fees. In support of its argument, HA&W cites Trugreen Cos. v. Mower Bros.,
570 Fed. Appx. 775 (10th Cir. 2014), in which the federal court found that employees
had not incurred litigation fees because under a written contract with their employer,
that company had assumed sole liability for all of the employees’ litigation fees and
costs. Id. at 777.
Of course a decision of a federal circuit court is only persuasive authority in
this court. See Bobick v. Community & Southern Bank, 321 Ga. App. 855, 861 (3) n.
5 (743 SE2d 518) (2013). And we need not decide today whether to follow Trugreen.
This case is materially different from Trugreen. In this case, unlike in Trugreen,
HA&W has not identified a written contract or other evidence showing that Morgan
Stanley has contractually assumed sole liability for all of the former employees’
attorney fees. Rather, the evidence cited by HA&W shows only that former
employees indicated that Morgan Stanley was paying for litigation expenses at the
time the depositions or interrogatory responses were given. It is not this court’s “duty
to cull the record in search of evidence to support the contentions of parties.” Cox v.
Southern Guar. Ins. Co., 254 Ga. App. 776, 778 (2) (563 SE2d 882) (2002) (citation
omitted). Thus, based on the evidence cited by HA&W to support its contention, we
24 cannot say that the former employees unequivocally are not legally liable for some
expenses of litigation or that they will never incur any such expenses in this ongoing
Indeed, the court in Trugreen emphasized that it was not “address[ing] the
situation where a party remains legally liable for fees and costs even though someone
else pays them.” Id. at 777. Given the evidence cited by HA&W, a finding that the
former employees will, as a matter of fact and law, never incur or be liable for
expenses of litigation in this case would be premature. Because there are genuine
issues of material fact on the matter, the trial court correctly denied summary
(c) Deferred compensation counterclaim.
HA&W argues that the trial court erred in denying summary judgment on the
deferred compensation counterclaims of Austin, Schiffer, and Wynne because they
failed to comply with the plain language of the deferred compensation plan, as
incorporated into their respective employment contracts, which required them to
execute and deliver a release to HA&W and to exhaust their administrative remedies.
With regard to the release, Austin, Schiffer, and Wynne have pointed to evidence that
HA&W itself failed to timely comply with a requirement that it first deliver the
25 release to them upon their resignations. Thus, there exist genuine issues of material
fact as to the proper execution of the release.
As for what HA&W calls failure to exhaust administrative remedies, HA&W
has not specified in the argument section of its brief the remedies to which it is
referring. Rather, HA&W simply makes the conclusory allegation that Austin,
Schiffer, and Wynne did not exhaust their administrative remedies. We note that in
the statement of facts portion of its brief, HA&W stated that Austin, Schiffer, and
Wynne did not make a claim under the plan prior to the lawsuit. But HA&W did not
reference this statement, or any other, as the basis for its conclusory claim that some
mandatory prerequisites have not been satisfied. “We will not speculate or make
arguments on [HA&W’s] behalf; to do so would improperly change this court’s role
from disinterested decision-maker to appellate advocate.” Harmon v. Innomed
Technologies, 309 Ga. App. 265, 270 (1) (b) (709 SE2d 888) (2011). Under these
circumstances, HA&W has failed to meet its burden on appeal of showing that the
record lacks evidence sufficient to create a jury issue on at least one essential element
of the deferred compensation counterclaims. See Keisha, LLC, supra. Accordingly,
the trial court did not err in denying summary judgment on those counterclaims.
(d) Conversion counterclaims.
26 HA&W enumerates that the trial court erred in denying its motion for summary
judgment on the former employees’ conversion counterclaims. But the argument in
support of this enumeration fails to cite to any part of the record. “Each enumerated
error shall be supported in the brief by specific reference to the record or transcript.
In the absence of a specific reference, the Court will not search for and may not
consider that enumeration.” Court of Appeals Rule 25 (c) (2) (i). As noted above, this
court has no duty to cull the record in search of evidence to support the claims of
parties. Cox, supra. HA&W has thus failed to show that the trial court erred in
denying summary judgment on these counterclaims.
Judgment affirmed in part, reversed in part, vacated in part, and case
remanded with direction. Ray and Rickman, JJ., concur.