Phillips v. Selecto Scientific

707 S.E.2d 615, 308 Ga. App. 412, 2011 Fulton County D. Rep. 811, 2011 Ga. App. LEXIS 198
CourtCourt of Appeals of Georgia
DecidedMarch 15, 2011
DocketA10A2180
StatusPublished
Cited by5 cases

This text of 707 S.E.2d 615 (Phillips v. Selecto Scientific) 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
Phillips v. Selecto Scientific, 707 S.E.2d 615, 308 Ga. App. 412, 2011 Fulton County D. Rep. 811, 2011 Ga. App. LEXIS 198 (Ga. Ct. App. 2011).

Opinion

SMITH, Presiding Judge.

Andrew Phillips appeals from the trial court’s dismissal of his complaint for breach of contract against Selecto Scientific (“Selecto”), on the ground that he is not a real party in interest. 1 Phillips also appeals from the trial court’s rulings regarding discovery and the award of attorney fees to Selecto. For the following reasons, we reverse the trial court’s dismissal of Phillips’s complaint, but affirm the trial court’s ruling with respect to discovery and the award of attorney fees.

The record reveals that Selecto offered Phillips six months of employment beginning on February 15, 2007. Phillips claims that he accepted the offer and worked for Selecto for three-and-a-half months when he was terminated. Phillips sued Selecto for, among other things, breach of contract and sought damages of $13,900, the amount he claimed was remaining under the employment agreement. 2 Selecto moved to dismiss Phillips’s complaint on the ground that he was not a proper party to the lawsuit because he had assigned his payments under the employment agreement to ParSigma, a LLC in which Phillips was the only principal. The trial court granted the motion concluding that

[b]ased upon the deposition transcript of [Phillips], wherein [Phillips] admitted that he assigned all rights to payments under the subject contract to ParSigma and/or Par-Technology, LLC, the Court finds that [Phillips] is not the real party in interest to institute the action and therefore lacks standing.

1. Phillips first argues that the trial court erred in ruling that he does not have standing to bring his breach of contract action. We agree.

It is well settled that every action shall be prosecuted in the name of the real party in interest. Thus, a person may only challenge a ruling that has adversely affected his or her own rights. And, as a general rule, standing must be determined at the time at which the plaintiffs complaint is filed in *413 order to place an actual case or controversy within the purview of the court.

(Citation, punctuation and footnotes omitted.) Associated Credit Union v. Pinto, 297 Ga. App. 605, 606 (677 SE2d 789) (2009); see OCGA § 9-11-17 (a). “The real party in interest is the person, who, by the substantive governing law, has the right sought to be enforced.” (Citation and punctuation omitted.) Allianz Life Ins. Co. &c. v. Riedl, 264 Ga. 395, 398 (3) (444 SE2d 736) (1994). And when an action has not been instituted by the real party in interest, it shall not be dismissed until after a reasonable time is allowed for the joinder or substitution of the real party in interest. OCGA § 9-11-17 (a).

Phillips deposed that he created ParSigma at the advice of his accountant. He first stated that his work for Selecto was assigned to ParSigma or Par-Technology, another LLC he created. He later clarified, however, that he personally did the work for Selecto, but assigned the payment for the work to ParSigma: “I meant that I assigned the payment for them to pay me through ParSigma or Par-Technology.” Tax documents in the record reveal that Selecto paid ParSigma $53,300 in 2007, apparently for Phillips’s services.

“An assignment is an ‘absolute, unconditional, and completed transfer of all right, title, and interest in the property that is the subject of the assignment. . ., with the concomitant total relinquishment of any control over the property.’ ” (Citation omitted.) Allianz, supra, 264 Ga. at 398 (2). The facts of this case are similar to the facts in Hodgskin v. Markatron, Inc., 185 Ga. App. 750 (365 SE2d 494) (1988). In that case, the plaintiff, Hodgskin, sued the defendant, Markatron, to recover sales commissions allegedly due under an employment contract. Id. at 751-752 (3).

In support of its motion, Markatron submitted the affidavit of its president, Titus, stating “it was [his] understanding” that Hodgskin’s right to commission payments “as well as all other rights she had under her employment agreement with Markatron had been assigned to Hodgskins [sic] Enterprises, Inc.” because of a letter signed by Hodgskin and her husband. The letter contained the statement that any sums from Markatron made payable personally to Hodgskin in the past and all payments in the future would “be treated as outside services paid to Hodgskin Enterprises, Inc.” Both Hodgskin and her husband averred in affidavits that no assignment of any rights to Hodgskin Enterprises, Inc. had occurred nor was such an assignment intended to result from the letter they signed which, they asserted, was *414 intended instead to obviate the requirement that Marka-tron withhold F.I.C.A. and other sums from Hodgskin’s commission payments.

Id. This court held that there was an absence of evidence establishing outright assignment. Id. at 752 (3).

Assuming Phillips’s employment agreement with Selecto was valid and enforceable, Phillips assigned payment under the agreement to ParSigma. But Phillips did not assign to ParSigma his right, title, and interest under the employment agreement. Moreover, for the contract to be enforced by ParSigma, the assignment would have to be in writing. See Wirth v. Cach, LLC, 300 Ga. App. 488, 489 (685 SE2d 433) (2009) (“A party may assign to another a contractual right to collect payment, including the right to sue to enforce the right. But an assignment must be in writing in order for the contractual right to be enforceable by the assignee.”) (citation and punctuation omitted). Under these circumstances, without a showing that Phillips assigned his right, title, and interest in the employment contract to ParSigma, we must conclude that the trial court erred in dismissing Phillips’s complaint on the ground that he is not a real party in interest.

2. In two enumerations, Phillips argues that the trial court erred in finding that he did not meet the good faith requirement of Uniform Superior Court Rule (“USCR”) 6.4 (B) for filing a motion to compel and a motion for sanctions and in denying those motions on that ground. “[A] trial court is granted broad discretion under the discovery provisions of the Civil Practice Act, and an appellate court will not interfere with the court’s exercise of its discretion absent clear abuse.” (Citations, punctuation and footnote omitted.) Bd. of Regents <fee. v. Ambati, 299 Ga. App. 804, 810 (4) (685 SE2d 719) (2009).

USCR 6.4 (B) provides:

Prior to filing any motion seeking resolution of a discovery dispute, counsel for the moving party shall confer with counsel for the opposing party in a good faith effort to resolve the matters involved. At the time of filing the motion, counsel shall also file a statement certifying that such conference has occurred and that the effort to resolve by agreement the issues raised failed. . . .

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707 S.E.2d 615, 308 Ga. App. 412, 2011 Fulton County D. Rep. 811, 2011 Ga. App. LEXIS 198, Counsel Stack Legal Research, https://law.counselstack.com/opinion/phillips-v-selecto-scientific-gactapp-2011.