Georgia Supreme Court Upholds Attorney Fee Law
April 1, 2010 By Breakfield & Associates, Attorneys
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In the case of Smith v. Salon Baptiste (S09A1543) (2010), the Georgia Supreme Court ruled that Georgia law § 9-11-68 requiring a losing party to pay the attorney fees of the winning party under certain conditions was constitutional.
Under O.C.G.A. § 9-11-68, either plaintiff or defendant in a tort case can send a formal offer (offer of settlement/ offer of judgment) to the other party with a settlement amount for which the sending party is willing to resolve the case. The offer must be accepted within 30 days or it is deemed reject. If rejected, the rejecting party can be held responsible for the sending party’s attorney fees if the sending party is able to obtain a judgment 25% more favorable than the offer and the sending party properly followed § 9-11-68 properly.
An example under § 9-11-68: Plaintiff has $10,000.00 in medical bills and sends the defendant an offer of judgment via § 9-11-68 to resolve the matter for $20,000.00. The defendant does not accept the offer within 30 days. If the plaintiff obtains an award greater than 25% more than the offer of $20,000.00 (which is $25,000.00), then the defendant could be required to pay attorney fees from the time of rejection until the time of the award.
The intent of the law is to force parties to think about the value of their case, including the trouble and expense required to go to court and then put a dollar amount on it.
In the case of Smith v. Salon Baptiste, a radio personality, while on the radio, stated that the salon had messed up his daughter’s hair and that they would not be going back. The salon sued him for defamation/ slander (which is a tort). Mr. Smith, through his lawyer, sent an offer of settlement under § 9-11-68 offering to settle for $5,000.00. The salon rejected the offer.
In a summary judgment proceeding, the court ruled in favor of Smith and therefore the salon was entitled to zero dollars. Obviously, zero dollars is at least 25% more favorable to Defendant Smith than the offer of settlement of $5,000.00. As a result of the summary judgment victory, Smith asked for $50,000.00 in attorney fees which he had incurred after the salon’s rejection of Smith’s $5,000.00 offer.
The trial court judge ruled that § 9-11-68 was unconstitutional because it created and an unreasonable burden to fair and equal access to the courts, which is a right given to all by the Georgia Constitution.
Smith appealed the judge’s decision on the attorney fees under § 9-11-68 and the Georgia Supreme Court overruled the trial judge and determined that § 9-11-68 was constitutional and did not restrict access to the courts. The Supreme Court reasoned that Georgia has a history of making people pay the other side’s attorney fees when they are stubborn and litigious or act in fraudulent or highly unreasonable manner. Under § 9-11-68, the law did not prevent someone from bringing a lawsuit, it just makes them pay attorney fees if they turn down an offer that would have saved everyone time and effort had they accepted it. The Georgia Supreme Court reasoned that the law was not a block to courts, just a block on frivolous lawsuits.
The Georgia Supreme Court dissenting Justices wrote in their minority opinion that § 9-11-68 was an unreasonable block to free access to the courts because it punished a party for merely guessing wrong on what a jury might award at some point in the future, not for being unreasonable during the litigation (there are already laws for that). The justices pointed out that this guesswork and the associated heavy financial penalties would cause a chilling effect discouraging litigants from pursuing valid claims for fear of paying the other party’s attorney fees.
The reality of this ruling is that both Plaintiff and Defendant will have to deal with offers of judgment and offers of settlement under O.C.G.A. § 9-11-68 for years to come.
ABOUT THE AUTHOR: John G. Breakfield
About the author: John Breakfield is an attorney with Breakfield & Dean, LLC in Gainesville, Georgia and handles matters regarding those injured by the negligence and fault of others. The law office of Breakfield & Dean, LLC can assist clients through out Georgia.
Copyright Breakfield & Associates, Attorneys
More information about Breakfield & Associates, Attorneys
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
An example under § 9-11-68: Plaintiff has $10,000.00 in medical bills and sends the defendant an offer of judgment via § 9-11-68 to resolve the matter for $20,000.00. The defendant does not accept the offer within 30 days. If the plaintiff obtains an award greater than 25% more than the offer of $20,000.00 (which is $25,000.00), then the defendant could be required to pay attorney fees from the time of rejection until the time of the award.
The intent of the law is to force parties to think about the value of their case, including the trouble and expense required to go to court and then put a dollar amount on it.
In the case of Smith v. Salon Baptiste, a radio personality, while on the radio, stated that the salon had messed up his daughter’s hair and that they would not be going back. The salon sued him for defamation/ slander (which is a tort). Mr. Smith, through his lawyer, sent an offer of settlement under § 9-11-68 offering to settle for $5,000.00. The salon rejected the offer.
In a summary judgment proceeding, the court ruled in favor of Smith and therefore the salon was entitled to zero dollars. Obviously, zero dollars is at least 25% more favorable to Defendant Smith than the offer of settlement of $5,000.00. As a result of the summary judgment victory, Smith asked for $50,000.00 in attorney fees which he had incurred after the salon’s rejection of Smith’s $5,000.00 offer.
The trial court judge ruled that § 9-11-68 was unconstitutional because it created and an unreasonable burden to fair and equal access to the courts, which is a right given to all by the Georgia Constitution.
Smith appealed the judge’s decision on the attorney fees under § 9-11-68 and the Georgia Supreme Court overruled the trial judge and determined that § 9-11-68 was constitutional and did not restrict access to the courts. The Supreme Court reasoned that Georgia has a history of making people pay the other side’s attorney fees when they are stubborn and litigious or act in fraudulent or highly unreasonable manner. Under § 9-11-68, the law did not prevent someone from bringing a lawsuit, it just makes them pay attorney fees if they turn down an offer that would have saved everyone time and effort had they accepted it. The Georgia Supreme Court reasoned that the law was not a block to courts, just a block on frivolous lawsuits.
The Georgia Supreme Court dissenting Justices wrote in their minority opinion that § 9-11-68 was an unreasonable block to free access to the courts because it punished a party for merely guessing wrong on what a jury might award at some point in the future, not for being unreasonable during the litigation (there are already laws for that). The justices pointed out that this guesswork and the associated heavy financial penalties would cause a chilling effect discouraging litigants from pursuing valid claims for fear of paying the other party’s attorney fees.
The reality of this ruling is that both Plaintiff and Defendant will have to deal with offers of judgment and offers of settlement under O.C.G.A. § 9-11-68 for years to come.
ABOUT THE AUTHOR: John G. Breakfield
About the author: John Breakfield is an attorney with Breakfield & Dean, LLC in Gainesville, Georgia and handles matters regarding those injured by the negligence and fault of others. The law office of Breakfield & Dean, LLC can assist clients through out Georgia.
Copyright Breakfield & Associates, Attorneys
More information about Breakfield & Associates, Attorneys
View all articles published by Breakfield & Associates, Attorneys
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
