McRae, Stegall, Peek, Harman, Smith & Manning, LLP v. Georgia Farm Bureau Mutual Insurance

729 S.E.2d 649, 316 Ga. App. 526
CourtCourt of Appeals of Georgia
DecidedJune 29, 2012
DocketA12A0248
StatusPublished
Cited by7 cases

This text of 729 S.E.2d 649 (McRae, Stegall, Peek, Harman, Smith & Manning, LLP v. Georgia Farm Bureau Mutual Insurance) 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
McRae, Stegall, Peek, Harman, Smith & Manning, LLP v. Georgia Farm Bureau Mutual Insurance, 729 S.E.2d 649, 316 Ga. App. 526 (Ga. Ct. App. 2012).

Opinion

Adams, Judge.

This appeal involves the assertion of an attorney’s lien and three related lawsuits: (1) the Roberson case, in which a $1.2 million default judgment was entered against Jimmy Willoughby; (2) the Willoughby case, in which Willoughby and his relatives brought suit against an insurance company for failing to provide a defense in the Roberson case; and (3) the present case (the MSP case), in which Willoughby’s attorneys seek a declaratory judgment to enforce their attorney’s lien in the Willoughby case.1 The provocative fact is that after the insurance company was sued in the Willoughby case, it made a $690,000 payment directly to the plaintiff in the Roberson case, which, Willoughby’s attorneys argue, violated their attorney’s lien. In this — the MSP — case, following a bench trial, the trial court dismissed the attorneys’ declaratory judgment action with prejudice, and the attorneys appeal. For the reasons stated below, we affirm.

The parties agree that the standard of review for a bench trial is applicable:

The court is the trier of fact in a bench trial, and its findings will be upheld on appeal if there is any evidence to support them. The plain legal error standard of review applies where the appellate court determines that the issue was of law, not fact.

(Punctuation and footnotes omitted.) Page v. Braddy, 255 Ga. App. 124, 126 (564 SE2d 538) (2002). See also Progressive Preferred Ins. Co. v. Aguilera, 243 Ga. App. 442, 445-446 (2) (533 SE2d 448) (2000).

Appellant MSP — McRae, Stegall, Peek, Harman, Smith & Manning, LLP — does not challenge the procedural history recited by the trial court in its order. That order, the evidence below, and this Court’s prior opinion in the Willoughby case show that Donald Roberson was injured on property occupied by Willoughby but owned and insured by Katherine and Richard Geiger (Willoughby’s daughter and son-in-law). Geiger, 305 Ga. App. at 399-400. The Geigers had a farm-owner’s .insurance policy from Georgia Farm Bureau Mutual Insurance Company (GFB) “that provided general liability insurance [527]*527and covered all of [their] property.” Id. at 399. In December 2007, Roberson filed suit against only Willoughby (not the Geigers) in Haralson County, and although Katherine Geiger contacted GFB and believed that GFB was going to defend her father, on March 26, 2008, Roberson obtained a $1.2 million default judgment against Wil-loughby, who was unrepresented. Plaintiff Roberson was represented in that case by Wright Gammon.

On May 20, 2008, MSP, on behalf of Willoughby and the Geigers, filed suit in Polk County against GFB “alleging bad faith, negligence, fraud, and breach of fiduciary duty for failure to provide coverage and defend Willoughby in the Roberson suit, and also alleging emotional distress as a result of GFB’s actions,” as well as claims for attorney fees under OCGA § 13-6-11 and punitive damages. Geiger, 305 Ga. App. at 400.2 On July 23, 2009, the trial court granted summary judgment in favor of GFB on all claims. Id. at 399. On July 8, 2010, this Court affirmed summary judgment with regard to the Geigers because they “were not parties to the Roberson lawsuit and therefore have not suffered damage as a result of GFB’s alleged failure to defend Willoughby.” Id. at 403 (2). Nevertheless, this Court reversed summary judgment with regard to Willoughby on the ground that “a question of fact exist[s] as to whether Willoughby was a member of the Geigers’ household and, thus, whether he was an insured to whom GFB had a duty to defend. . . .” Id. at 400 (l).3 That case — Willoughby’s tort claim against GFB for failure to defend him in the Roberson case — is still pending in Polk County. In July 2010, MSP gave GFB notice of its lien in that case.

On August 9, 2010, MSP filed the present action, the third case relevant to this appeal — its complaint for declaratory judgment regarding its lien in the Willoughby case. MSP also named Roberson as a defendant but later dismissed him. In its complaint, MSP seeks declaratory relief pursuant to OCGA § 9-4-2 in several forms, including: (1) that any satisfaction of the judgment in the Roberson case does not extinguish Willoughby’s claims for relief in the Willoughby case; (2) that the Willoughby case “arose” when his assets were exposed to liability for the default judgment in the Roberson case; (3) that Willoughby’s damages in the Willoughby case were at least $1.2 million plus interest subject to a credit for amounts GFB had paid to satisfy the judgment in the Roberson case; (4) that MSP’s lien [528]*528attached to the Willoughby case upon filing and that it attached to any payment by GFB to satisfy the Roberson case, “just as though Mr. Willoughby had recovered from GFB in [the Willoughby case]”; and (5) that GFB shall be liable to MSP and pay MSP its fees to satisfy its lien in the Willoughby case upon any payment by GFB to satisfy the judgment in the Roberson case.

But on November 24, 2010, over two years after entry of the default judgment in the Roberson case and while both the Willoughby and MSP cases were pending, and with no notice to MSP or Wil-loughby, GFB paid and Roberson’s estate accepted $690,000 in satisfaction of the judgment entered in the Roberson case; and Roberson subsequently filed a full and final satisfaction “of the entire Judgment, specifically including but not limited to all costs, pre- and post-judgment interest, and attorney’s fees.” Roberson’s estate also fully released GFB of and from any and all possible claims and actions. GFB explained at a hearing that it made a “calculated business decision” to mitigate damages in the event that a jury in the Willoughby case determined that Willoughby was an insured under the Geiger policy and that GFB had therefore breached its duty to defend him in the Roberson case. After learning of the payment, MSP amended its complaint in this case to include claims of conversion, punitive damages, and expenses of litigation.

Following an evidentiary hearing, the lower court dismissed the MSP case, essentially on the ground that MSP did not have a lien that pertained to the $690,000 payment made by GFB to Roberson. GFB also argued below that MSP had not presented a case with an actual or justiciable controversy under the Declaratory Judgment Act and that therefore the trial court lacked jurisdiction. We affirm on this latter ground.

An attorney’s lien on a claim for money, i.e., a “charging” lien, “is the equitable right of the attorney to recover his fees and costs due him for his services, and may be satisfied out of the judgment obtained by his professional services.” Law Office of Tony Center v. Baker, 185 Ga. App. 809 (366 SE2d 167) (1988).4In Georgia, attorneys charging liens are governed by statute in derogation of common law, see OCGA § 15-19-14 (b), and therefore the relevant Code section must be strictly construed. Woodward v. Lawson, 225 Ga. 261, 262 (2) (167 SE2d 660) (1969); Hill v. Centennial/Ashton Properties Corp., 254 Ga. App. 176, 178 (2) (561 SE2d 853) (2002). “Accordingly, the [529]

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Bluebook (online)
729 S.E.2d 649, 316 Ga. App. 526, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mcrae-stegall-peek-harman-smith-manning-llp-v-georgia-farm-bureau-gactapp-2012.