Galawezh Showan v. Patrick Pressdee

Case: 17-15547 Date Filed: 04/29/2019 Page: 1 of 35
[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 17-15547
Non-Argument Calendar
________________________
D.C. Docket No. 1:16-cv-00468-ODE
GALAWEZH SHOWAN,
Plaintiff - Appellant,
versus
PATRICK PRESSDEE,
KRISPY KREME DOUGHNUT CORPORATION,
Defendants - Appellees,
PENSKE TRUCK LEASING CO., L.P.,
Defendant.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
________________________
(April 29, 2019)
Case: 17-15547 Date Filed: 04/29/2019 Page: 2 of 35
Before WILLIAM PRYOR, BRANCH, and ANDERSON, Circuit Judges.
BRANCH, Circuit Judge:
Plaintiff Galawezh Showan appeals from her $330,000 jury verdict against
Defendants Patrick Pressdee and Krispy Kreme Doughnut Corporation (“Krispy
Kreme”). For the reasons that follow, we affirm in part, vacate in part, and remand
for a new trial.
I. GENERAL BACKGROUND
A. Facts and Procedural History
On April 27, 2015, Pressdee, an employee of Krispy Kreme, was driving in
the course of his employment when he rear-ended Showan while she was stopped
at a red light. Pressdee was travelling at 35–40 mph when he collided with
Showan, causing her vehicle to hit the vehicle in front of it. On May 5, 2015,
Krispy Kreme issued Pressdee a corrective action report that acknowledged
Pressdee “was at fault” for the accident. Krispy Kreme’s insurance claim summary
prepared on May 8, 2015, indicates Showan was “0%” negligent.
Showan had serious injuries and was transported by EMS to the emergency
room. She sustained a whiplash-type injury to her cervical spine, wrist swelling,
and facial bruising with a minor laceration. Showan also had previous back issues,
which she contends the accident exacerbated. Her back issues were “noticeably
improved” following back surgery that preceded the accident. However, post-
2
Case: 17-15547 Date Filed: 04/29/2019 Page: 3 of 35
accident, Showan asserts she is “in pain twenty-four hours a day, not only in her
back but in her head, neck, wrist, and legs.”
Showan works as a cashier at Walmart, as she did before the accident. A
Walmart cashier is required to stand and walk to assist customers, although sitting
on a stool is sometimes permitted. Showan now needs to use the stool more
frequently, which limits her to working only in the “express line” checkout lanes.
Cashiers working in the express lanes can sit more often than cashiers who work
the self-checkout stations, as the self-checkout cashiers must move around to assist
customers as needed. Showan alleges she will be unable to work while recovering
from potential future medical treatment.
On October 19, 2015, Showan filed a personal injury action in the State
Court of Gwinnett County, Georgia. Defendants removed to the United States
District Court for the Northern District of Georgia.1
When Defendants answered, they asserted that they breached no duty to
Showan, that Showan was comparatively negligent, that Showan assumed the risk,
1
The district court had diversity jurisdiction under 28 U.S.C. § 1332(a)(1). “[D]iversity
jurisdiction is determined at the time of filing the complaint or, if the case has been removed, at
the time of removal.” Thermoset Corp. v. Bldg. Materials Corp. of Am., 849 F.3d 1313, 1317
(11th Cir. 2017) (quoting PTA-FLA, Inc. v. ZTE USA, Inc., 844 F.3d 1299, 1306 (11th Cir.
2016)). Showan was domiciled in Georgia at the time of removal. This Court allowed the
parties to supplement the record with an affidavit regarding Pressdee’s citizenship. Pressdee
says he was domiciled and served in North Carolina when this lawsuit was filed, and he has since
moved to Ohio. Krispy Kreme is incorporated in North Carolina, where it also has its principal
place of business. Thus, there was complete diversity at the time of removal.
3
Case: 17-15547 Date Filed: 04/29/2019 Page: 4 of 35
and that Showan’s alleged injuries “were not foreseeable.” Pressdee’s response to
Showan’s request for admissions, dated January 21, 2016, similarly refused to
admit that his actions caused or contributed to the collision or that Showan suffered
injuries. At his April 27, 2016, deposition, however, Pressdee stated that he was
driving at 40 mph when he collided with Showan, who was stopped at a red light
and did nothing to contribute to the collision.
It was not until shortly before trial that Defendants moved, on July 25, 2017,
to amend their answers “to streamline the issues to be tried.” The district court
granted the motion, subject to conditions. The court stated that “Defendants’
amended answer will not preclude Plaintiff from seeking attorneys’ fees and costs
pursuant to state law should she prevail at trial.” The court explained that the
condition was “appropriate because this case is eighteen months old and only now,
on the eve of trial, are Defendants willing to admit significant liability of which
they have arguably been aware since the collision at issue.” Further, the original
answers were to remain admissible for impeachment purposes at trial. Defendants
then filed their amended answers on August 17, 2017.
B. Issues on Appeal
4
Case: 17-15547 Date Filed: 04/29/2019 Page: 5 of 35
The case proceeded to a jury trial that resulted in a $330,000 verdict for
Showan. But Showan appeals, arguing several of the district court’s rulings
throughout the proceedings were erroneous. 2 The issues are as follows:
1. Showan alleges that, during Defendants’ opening remarks at trial,
they improperly insinuated she was the reason the case did not
settle. She argues the district court erred in not giving a curative
instruction that she requested.
2. Defendants’ experts testified that Showan’s doctor charged too
much for one of the surgeries she had following the accident.
Showan contends this testimony violated the collateral source rule
and Rule 403 of the Federal Rules of Evidence.
3. Showan contends that Defendants misled the jury into believing
that Showan’s doctor was the only person present in the operating
room during the surgery, which may have in turn misled jurors into
believing the doctor overcharged for the surgery. Citing the rule of
completeness, Showan offered the entire record of treatment at the
surgical center where the procedure was performed. The district
court disallowed the evidence, which Showan argues was error.
4. During closing argument, Showan’s counsel invited the jury to
measure Showan’s damages on a per-hour basis. The district court
interjected, telling him not to make a unit-of-time damages
argument. Showan argues that such an argument is allowed and
that the district court’s admonishment was highly prejudicial.
5. Defendants successfully convinced the district court to grant
judgment as a matter of law on Showan’s lost future wages
damages claim, finding the evidence—to the extent any existed—
was too speculative to support the claim. Showan disagrees.
2
“Ordinarily, only a party aggrieved by a judgment or order of a district court may
exercise the statutory right to appeal therefrom. A party who receives all that he has sought
generally is not aggrieved by the judgment affording the relief and cannot appeal from it.”
Deposit Guar. Nat’l Bank, Jackson, Miss. v. Roper, 445 U.S. 326, 333 (1980). Showan is an
aggrieved party because the district court did not submit her request for attorney’s fees and
expenses to the jury.
5
Case: 17-15547 Date Filed: 04/29/2019 Page: 6 of 35
6. Showan argues that the district court erred in denying, as a matter
of law, her motion to have the jury assess her attorney’s fees under
a Georgia statute. She contends the statute required the court to
hold a hearing on frivolity.
The sixth issue presented is, as the saying goes, last but not least. As
explained below, a new trial is necessary because Georgia law required the district
court to submit Showan’s motion for fees to the jury. The district court’s failure to
do so is dispositive and requires us to vacate and remand for a new trial. In the
interest of judicial economy, we consider Showan’s other arguments. For ease of
reference, we address each issue separately, tracking the chronological course of
the proceedings in the district court, and include relevant corresponding facts as we
do so.
II. REFERENCES TO SETTLEMENT
A. Defendants’ Motion in Limine and Opening Statement
Defendants moved in limine to exclude “evidence regarding the manner of
litigation up to the time of trial.” Specifically, they asked the district court to
“exclude reference to disputes before trial, including disputes, motions, and court
orders on discovery or motions in limine.” Further, they moved in limine, under
Rule 609 of the Federal Rules of Evidence (presumably they meant Rule 408), 3 to
3
Rule 609 concerns “attacking a witness’s character for truthfulness by evidence of a
criminal conviction.” Rule 408 addresses the admissibility of evidence regarding compromise
offers and negotiations, and it is typically used to exclude evidence of settlement negotiations.
6
Case: 17-15547 Date Filed: 04/29/2019 Page: 7 of 35
exclude evidence of settlement negotiations or discussions. The district court
granted the motions.
Yet at trial, Defendants began their opening statement by referring to
settlement:
Most cases don’t make it this far. They don’t come to trial. The
parties work really hard to get their cases resolved before they get to
this point. We don’t want to waste the time of the jurors. We don’t
want to waste the time of the court.
...
There are certain things we can agree on, and I’m going to go through
those with you quickly, and then the things that are sticking points
that we can’t agree on.
...
Krispy Kreme Donut Corporation admitted responsibility for the
cause of the collision. We admit that Mr. Pressdee was working for
us at the time. So no issues regarding that. We also acknowledge that
Ms. Showan didn’t do anything to cause this collision, not a single
thing.
...
We also agree . . . this was a serious impact.
Showan objected immediately, and the district court overruled the objection. After
Defendants concluded their opening, during a recess, Showan requested a curative
instruction. In essence, Showan argued that Defendants had insinuated that she
was to blame for the case not settling, in light of their stated willingness to admit
liability. She urged the court to inform the jury that Defendants had not admitted
liability until shortly before the trial. The district court refused to do so, finding
that Defendants’ statement was accurate at the time it was made and that an
instruction “would be too heavy-handed.”
7
Case: 17-15547 Date Filed: 04/29/2019 Page: 8 of 35
B. Whether the District Court Should Have Given a Curative Instruction
Showan argues on appeal that the trial “proceed[ed] with an improperly
influenced or tainted jury.”
“We review a district court’s evidentiary rulings for abuse of discretion.”
Proctor v. Fluor Enters., Inc., 494 F.3d 1337, 1349 n.7 (11th Cir. 2007). “Errors
in evidentiary rulings are not grounds for reversal unless substantial prejudice
results.” Peterson v. Willie, 81 F.3d 1033, 1036 (11th Cir. 1996) (quoting King v.
Gulf Oil Co., 581 F.2d 1184, 1186 (5th Cir. 1978)). “Statements made in oral
arguments must be plainly unwarranted and clearly injurious to constitute
reversible error.” Id.
The district court did not abuse its discretion in not providing a curative
instruction. It is arguable that some of the opening statement was unwarranted—
and somewhat disingenuous in light of Defendants’ motion in limine on the issue.
But the statement was not clearly injurious to Showan. Indeed, although the
district court did not give a curative instruction to the jury, it did allow Showan to
contradict any insinuation of Defendants’ previous graciousness during the
litigation. Showan requested, over Defendants’ objection, that she be allowed to
use Pressdee’s initial denial of liability. Notably, the district court granted this
request. The ability to mount a direct attack on Defendants’ counsel’s opening
8
Case: 17-15547 Date Filed: 04/29/2019 Page: 9 of 35
remarks was sufficient to counteract any injury from Defendants’ indirect
suggestion in the opening statement.
Nor did the comments in the opening statement violate Rule 408 of the
Federal Rules of Evidence. That rule prohibits introducing evidence of actual
settlement offers or negotiations for certain prohibited purposes. Defendants’
counsel’s opening statement did not refer to evidence of any specific offers to
settle or compromise; it observed generally what happens in “[m]ost cases.”
We therefore find no reversible error in the district court’s ruling on
Defendants’ counsel’s opening statement. 4
III. EVIDENCE OF MEDICAL RATES
A. Defendants’ Medical-Rate Experts
On February 9, 2016, as part of her treatment following the accident,
Showan had a discectomy—back surgery that involves local anesthetic to remove
lumbar disc material. Showan’s doctor charged $173,213 for the surgery. He also
charged a facility fee of $80,768.5
Defendants believed those charges were excessive and sought to prove it
through the testimony of medical billing experts, Lamar Blount and Jessica
4
As we ultimately remand this case for a new trial, the district court can nonetheless
revisit the issue as necessary.
5
During closing argument, Showan said these bills were actually for higher amounts.
We need not resolve this discrepancy in this appeal.
9
Case: 17-15547 Date Filed: 04/29/2019 Page: 10 of 35
Schmor. Showan was uninsured, and Blount and Schmor relied on average rates
that included those subsidized by the government or private insurers. Blount
testified that, based on databases for doctors in the same area, the 90th percentile
charge for the same procedure would be $20,688. The 80th percentile for a facility
fee would be $27,144. Schmor testified that the doctor’s billing practices were
highly unusual and potentially unethical: “You do not see facility charges being
billed on an itemization from a physician’s practice. They’re completely separate
entities, and they’re different bills. . . . [T]o see a facility charge on a physician
bill is highly unlikely. . . . I’ve only seen it in two practices”—Showan’s doctor
and that doctor’s previous partner. Schmor also expressed skepticism regarding
such charges from an ambulatory surgery center like the one where Showan had
her surgery.
Showan moved in limine to exclude this testimony. Showan contended the
testimony violated the collateral source rule, which prohibits evidence of an
insurance company’s payments to a tort victim. Showan argues that Blount and
Schmor were suggesting that her medical bills were “too high because Medicare,
the VA, or Acme Insurance Company thinks so, and/or they do not pay as much
for the treatment [she] had.” “In other words, Defendants [were] employing a
back-door tactic that [sought] to indirectly accomplish what the Collateral Source
Rule would never permit them to do directly.” Showan further argued that the
10
Case: 17-15547 Date Filed: 04/29/2019 Page: 11 of 35
testimony violated Rule 403 of the Federal Rules of Evidence because it was
irrelevant, prejudicial, and confusing in light of the fact that she did not receive any
assistance from any government or other health insurer in paying her medical bills.
The district court rejected Showan’s arguments, finding the testimony was
not offered to show what Showan would have received from an insurer. 6 The
district court explained that “there is a difference between presenting evidence of
discounted rates a plaintiff could receive on [] medical costs based on the
plaintiff’s specific access to certain advantages, and evidence of market rates as a
whole.” The court found the testimony in question was offered to show whether
the medical bills were reasonable and allowed it.
B. Whether the District Court Properly Admitted the Testimony
On appeal, Showan reiterates her motion-in-limine arguments. She contends
the district court should not have admitted the testimony. Again, we “review a
district court’s evidentiary rulings for abuse of discretion.” Proctor, 494 F.3d at
1349 n.7.
Under Georgia law, a tort victim is “entitled to recover medical expenses
arising from his injuries, including hospital charges, that [are] ‘reasonable and
necessary.’” MCG Health, Inc. v. Kight, 353, 750 S.E.2d 813, 817 (Ga. Ct. App.
6
The district court also acknowledged that, if the testimony had been offered for this
reason, it would have been improper under the collateral source rule.
11
Case: 17-15547 Date Filed: 04/29/2019 Page: 12 of 35
2013) (quoting Allen v. Spiker, 689 S.E.2d 326, 329 (Ga. Ct. App. 2009)).
“Moreover, under the collateral source rule, [the victim is] entitled to seek full
recovery from the tortfeasor of reasonable and necessary hospital charges
undiminished by [the victim’s] insurance payments or ‘write-offs.’” Id. In other
words, the “collateral source rule bars the defendant from presenting any evidence
as to payments of expenses of a tortious injury paid for by a third party and taking
any credit toward the defendant’s liability and damages for such payments.”
Hoeflick v. Bradley, 637 S.E.2d 832, 833 (Ga. Ct. App. 2006). “This is because a
tortfeasor is not allowed to benefit by its wrongful conduct or to mitigate its
liability by collateral sources provided by others.” Id.
Blount’s and Schmor’s testimony did not violate the collateral source rule.
Their testimony addressed the reasonableness and necessity of what Showan had
paid for her discectomy. Whether the expenses were “reasonable and necessary” is
a critical inquiry under Georgia law. Kight, 750 S.E.2d at 817.
For that reason, Defendants were properly allowed to argue that medical
charges were unreasonably high. They did not try to get any “credit” from the jury
based on payments that Showan had received. See Hoeflick, 637 S.E.2d at 833.
Indeed, Showan, who is uninsured, says she received no such payments. Showan’s
argument thus fundamentally misinterprets the collateral source rule. She contends
that the district court should have excluded evidence not of what was paid but of
12
Case: 17-15547 Date Filed: 04/29/2019 Page: 13 of 35
what might have been paid had she obtained insurance. Defendants were not
trying to introduce such evidence.
Showan’s Rule 403 argument also fails. As noted above, Georgia law
permits testimony regarding whether medical expenses are reasonable and
necessary. And to the extent Showan suggests that the testimony of Blount and
Schmor was misleading, she could have offered her own expert testimony to
disagree with or supplement their testimony. If Showan believed the “volume
discounts,” as she describes them, did not apply to her, she could have attempted to
convince the jury of that. But the district court did not err in allowing Defendants’
experts to give the jury a picture of what most doctors in the area charge for a
discectomy.
Accordingly, the district court did not abuse its discretion in admitting the
testimony of Blount and Schmor.
IV. MEDICAL RECORDS
Defendants also allegedly attacked another element of Showan’s
discectomy. Showan asserts on appeal that “[d]uring trial, Defendants falsely
argued that only one provider was present during the recorded procedure, which
would imply that the associated bill charged well-over what the services should
cost.” Showan does not point us to where Defendants made this one-provider
argument, and Defendants dispute having made it.
13
Case: 17-15547 Date Filed: 04/29/2019 Page: 14 of 35
Showan did not designate the surgical records in her pretrial exhibits, and
Defendants accordingly objected to her introducing those records. Showan
contends she should have been able to supplement the portion the Defendants
introduced, see Fed. R. Evid. 106, so that Defendants’ excerpt did not mislead the
jury.
Because we remand for a new trial, and because that new trial will involve
new pretrial exhibit designations, we need not resolve this dispute or opine on this
issue.
V. ADMONISHMENT DURING CLOSING ARGUMENT
A. Showan Argues for Damages Measured by the Hour
Showan’s counsel had the following exchange with the district court during
his initial closing argument:
[COUNSEL]: [W]hen you have pain like this in your neck, worse in
lower back, in your wrist, when you have the headaches, that’s an
everyday thing, and it’s certainly an every hour thing, and so we ask
you to take that into consideration for her future, and, again, all
caused by the Krispy Kreme truck collision. If it wasn’t, we wouldn’t
be here.
We ask for full justice and full compensation, and we want you to do
it in a way that makes sense. Because she suffers pain all the time,
what is the value of one hour? Well –
THE COURT: You cannot make a unit of time argument.
[COUNSEL]: Pardon me.
THE COURT: You may not make a unit of time argument. Let’s see,
what is the value of one hour –
[COUNSEL]: Yes.
THE COURT: – You can’t make an argument about what the value
of one hour’s worth of pain is. That is not permissible.
14
Case: 17-15547 Date Filed: 04/29/2019 Page: 15 of 35
[COUNSEL]: . . . May I argue this, your honor, to the jury, may I
ask them to take into consideration that she’s 52 years old, and under
the annuity mortality table she has 27.22 years to live?
THE COURT: Absolutely, that’s absolutely legitimate.
During closing rebuttal argument, Showan’s counsel again argued that jurors
could “do the math” on Showan’s pain and suffering down to the hour:
We say and the judge will tell you it is your decision to decide what to
do here. She’s got to live with this for the rest of her life. What
Krispy Kreme did to her, she’s got to live with it for the rest of her
life, and I do ask you not to pull some numbers out of a hat. I ask you
to do math. You are allowed to do math as jurors and say how many
days is it, how many hours is it. Try 525 dollars an hour,[7] see what
you get.
Defendants’ counsel objected, and the district court reiterated its instruction
not to pursue that line of argument: “Yeah, you can’t argue that the projection is
that the plaintiff will suffer pain for every minute of every hour from now forward
and do a multiplier based on that, that’s just not allowable under the law.”
B. Whether Showan’s Closing Argument Was Improper
Showan argues that Georgia law permits her to have made a “per diem
argument” regarding damages and that the district court’s admonishment was
prejudicial, reversible error.
This circuit permits unit-of-time damages arguments. Baron Tube Co. v.
Transp. Ins. Co., 365 F.2d 858, 864 (5th Cir. 1966) (en banc). The “idea or worth
7
On appeal, Showan suggests this number was supposed to be $5.25 per hour. Perhaps it
was a misstatement at trial or a typographical error in the transcript.
15
Case: 17-15547 Date Filed: 04/29/2019 Page: 16 of 35
of one year of pain may not be as understandable, real or persuasive to a juror as its
equivalent, three hundred and sixty five days of pain and suffering.” Id. at 865.
“Whether the unit be cast in years or months, or weeks or days is a mere matter of
degree, and there is little logic in prohibiting the discussion of large units of time in
terms of their smaller mathematical equivalents.” Id. But precautions are in order:
the district “court must use care to the end that the argument will not inflame the
jury and result in an excessive verdict.” Id. at 864.8 Ultimately, “whether to allow
such an argument and the protective features to be employed are matters vested, in
the end, in the sound discretion of the trial court.” Id. at 864–65 (emphasis added).
Further, it is irrelevant that Georgia law allows unit-of-time arguments, see
Hardwick v. Price, 152 S.E.2d 905, 907–08 (Ga. Ct. App. 1966), because we are
bound by the holding that “the propriety of the [unit-of-time] argument is a federal
question. It is a matter of federal trial procedure.” Baron Tube Co., 365 F.2d at
862. In sum, Baron Tube Co. leaves the question of whether to allow a unit-of-
time argument wholly to the discretion of the district court.
The district court’s statement that Showan’s unit-of-time argument was “not
allowable under the law” was incorrect, as the district court has complete
discretion to disallow the argument or to allow it subject to safeguards. See id. at
8
The court noted some potential safeguards, including notifying opposing counsel and
the district court in advance; scrutinizing any charts used to avoid false impressions; and making
clear to the jury that the argument is not evidence. Baron Tube Co., 365 F.2d at 865.
16
Case: 17-15547 Date Filed: 04/29/2019 Page: 17 of 35
864–65. Because the district court erroneously concluded it had no discretion, it
necessarily abused that discretion. Cf. LSLJ P’ship v. Frito-Lay, Inc., 920 F.2d
476, 479 (7th Cir. 1990) (A “trial court may abuse its discretion by failing to
exercise its discretion.” (quoting FMC Corp. v. Varonos, 892 F.2d 1308, 1316 (7th
Cir. 1990)). At the new trial, the district court should, under Baron Tube Co.,
expressly exercise its discretion to allow or disallow any proffered unit-of-time
damages argument.
VI. CLAIM FOR FUTURE LOST INCOME
A. The Pre-Jury Deliberation Grant of Judgment as a Matter of Law
At the close of evidence, Defendants moved for judgment as a matter of law
on Showan’s claim for future lost wages. Defendants did not contest the wages
Showan lost while being treated by her physicians; rather, they argued that she
failed to demonstrate “reduction in ability to work” and thus is not entitled to
future lost wages. Although Showan’s hours had been reduced, she was still
working full time. To explain the reduction in hours, Defendants noted that
Showan (1) was aware that there was a nationwide reduction in hours (but with an
accompanying increase in pay) at Walmart, and (2) “was never told by anyone that
her reduction in hours was due to her accident or her injuries.” Showan’s
supervisor “was also unaware of any kind of medical restrictions” that prevented
Showan from working full time.
17
Case: 17-15547 Date Filed: 04/29/2019 Page: 18 of 35
Showan responded by emphasizing the permanence of her injury and
reiterating her inability to work in the same manner as before the accident. She
had to sit more frequently on the stool, and she could no longer work the regular
checkout aisle. And again, although she conceded that she is working full time
now, she argued, “now is not future lost wages.” Further, because Showan will
likely need surgery in the future (though it was disputed whether she would have
had that surgery regardless of the accident), she will be out of work for that
recovery.
The district court granted Defendants’ motion for judgment as a matter of
law. It explained, “I do agree that the evidence, to the extent there is any,
concerning the plaintiff’s inability to work in the future is entirely speculative.”
B. Whether the Future Lost Wages Claim Should Have Gone to the Jury
Showan argues there was sufficient evidence to submit her future lost wages
claim to the jury.
We review de novo the granting of a motion for judgment as a matter of law,
“considering only the evidence that may properly be considered and the reasonable
inferences drawn from it in the light most favorable to the nonmoving party.”
Rossbach v. City of Miami, 371 F.3d 1354, 1356 (11th Cir. 2004). “Where ‘no
legally sufficient evidentiary basis exists for a reasonable jury to find for that party
on that issue,’ judgment as a matter of law is proper.” Id. (quoting 12 Moore’s
18
Case: 17-15547 Date Filed: 04/29/2019 Page: 19 of 35
Federal Practice § 59.50[5] (3d ed. 1998)); accord Fed. R. Civ. P. 50(a)(1) (A
district court may grant judgment as a matter of law on an issue if “a party has
been fully heard on [the] issue during a jury trial and the court finds that a
reasonable jury would not have a legally sufficient evidentiary basis to find for the
party on that issue.”).
Under Georgia law, “[l]ost wages and earnings is recoverable where the
evidence shows the amount of loss with reasonable certainty.” Olariu v. Marrero,
549 S.E.2d 121, 124 (Ga. Ct. App. 2001). “Loss of future earnings is recoverable
where evidence is presented on the permanency of plaintiff’s injury, the effect of
injury on earnings, and the monetary amount thereof.” Id.
Even when viewed in the light most favorable to Showan, no reasonable jury
could have awarded her lost future wages under Georgia law. Even if her injury is
permanent, there is no evidence that the injury affected her ability to earn the same
income as before she was injured. She is still able to work full time as a cashier at
Walmart, even if her exact duties have changed. Moreover, Showan has failed to
quantify the amount of her loss. It is true that “all future earnings or diminished
future earnings are uncertain and difficult of ascertainment.” Michaels v. Kroger
Co., 322 S.E.2d 903, 908 (Ga. Ct. App. 1984). But that does not absolve a plaintiff
of the burden of putting forth some evidence of diminished earning capacity.
Showan was required to provide “evidence to show [her] capacity to labor and earn
19
Case: 17-15547 Date Filed: 04/29/2019 Page: 20 of 35
money has been permanently impaired.” Id.; see also Schriever v. Maddox, 578
S.E.2d 210, 212 (Ga. Ct. App. 2003) (“We have repeatedly held that a court’s
instructing a jury on lost earnings as a category of recoverable damages is
reversible error where the plaintiff has not presented evidence of the degree to
which the injury reasonably affected the plaintiff’s past and future income.”). The
relevant evidence in this case shows that Showan worked full time as a cashier
before the accident and that she worked full time as a cashier after the accident.
Admittedly, Showan must sit more frequently on a stool, but it is undisputed that
she gets paid the same amount when she must sit. To the extent she will need
future medical care that will cause her to take time off work, she similarly fails to
demonstrate with reasonable certainty either the amount of time she will need to
take off or the loss she will suffer as a result.
We find no Georgia case that would permit recovery of lost future wages
under such tenuous and speculative circumstances. We therefore affirm the district
court’s grant of judgment as a matter of law regarding the claim for lost future
wages.
VII. CLAIM FOR ATTORNEY’S FEES UNDER GEORGIA LAW
A. Defendants’ Allegedly Frivolous Defenses
Showan argued to the district court that she was entitled to attorney’s fees
under Georgia law. She claimed that Defendants presented frivolous defenses and
20
Case: 17-15547 Date Filed: 04/29/2019 Page: 21 of 35
acted in bad faith during the litigation. She maintains on appeal, for example, that
Defendants raised the affirmative defenses of comparative negligence and
assumption of risk—despite knowing Pressdee was completely at fault. Showan
points to the corrective action report that attributed fault to Pressdee and to Krispy
Kreme’s insurance claim that found Showan was “0%” negligent—both of which
were prepared within days of the accident. As Showan puts it, “It was not until the
eve of trial, and after Plaintiff was forced to conduct discovery and mediation
under Defendants’ false pretenses, that Defendants moved to amend their Answers
to recant these frivolous claims and defenses.”
Georgia has codified its disfavor of frivolous claims and defenses in tort
cases. Under O.C.G.A. § 9-11-68(e): 9
Upon motion by the prevailing party at the time that the verdict or
judgment is rendered, the moving party may request that the finder of
fact determine whether the opposing party presented a frivolous claim
or defense. In such event, the court shall hold a separate bifurcated
hearing at which the finder of fact shall make a determination of
whether such frivolous claims or defenses were asserted and to award
damages, if any, against the party presenting such frivolous claims or
defenses.
The statute also defines frivolous claims and defenses:
Frivolous claims shall include, but are not limited to, the following:
9
Section 9-11-68 is known as Georgia’s “offer-of-settlement” statute. See Richardson v.
Locklyn, 793 S.E.2d 640, 641 (Ga. Ct. App. 2016). Subsection (e), at issue here, covers
“completely separate issues” from those in the rest of the section: “Subsections (a) through (d)
govern offers of settlement, while subsection (e) governs damages for frivolous claims or
defenses.” Id. at 644.
21
Case: 17-15547 Date Filed: 04/29/2019 Page: 22 of 35
(A) A claim, defense, or other position that lacks substantial
justification or that is not made in good faith or that is made
with malice or a wrongful purpose, as those terms are defined
in Code Section 51-7-80;
(B) A claim, defense, or other position with respect to which
there existed such a complete absence of any justiciable issue of
law or fact that it could not be reasonably believed that a court
would accept the asserted claim, defense, or other position; and
(C) A claim, defense, or other position that was interposed for
delay or harassment.
Id. § 9-11-68(e)(1). Finally, the statute provides, “Damages awarded may include
reasonable and necessary attorney’s fees and expenses of litigation.” Id. § 9-11-
68(e)(2).
Showan argued that § 9-11-68(e) applied in her case and that she was
entitled to a separate hearing upon a favorable jury verdict. Although the district
court initially seemed to entertain the idea, it ultimately disagreed. While the jury
was deliberating, the court announced it would “dismiss” Showan’s claim for
fees.10 The district court concluded that “the evidence shows as a matter of law
that the pleadings filed by the defendants were not frivolous” and that, in any
event, Showan was not prejudiced.
B. Whether Federal Law or State Law Governs
10
The district court was actually, in effect, preemptively denying the motion Showan
would need to make under § 9-11-68(e). Following the jury verdict, Showan made that motion,
preserving it for appeal purposes.
22
Case: 17-15547 Date Filed: 04/29/2019 Page: 23 of 35
Showan argues she should have been able to submit to the jury, upon its
favorable verdict, her state-law claim for attorney’s fees. But Defendants contend
federal law—namely Rule 11 of the Federal Rules of Civil Procedure—conflicts
with and overrides her claim. They say Showan is not entitled to a bifurcated
hearing because, in federal court, the judge—not the finder of fact—determines
frivolity.
“We [] review de novo a district court’s determination and application of
state law in a diversity case.” Pendergast v. Sprint Nextel Corp., 592 F.3d 1119,
1132 n.11 (11th Cir. 2010).
When a state statute arguably conflicts with a Federal Rule of Civil
Procedure, a federal court sitting in diversity jurisdiction will not apply the state
statute if the federal rule “answers the question in dispute.” Shady Grove
Orthopedic Assocs., P.A. v. Allstate Ins. Co., 559 U.S. 393, 398 (2010) (majority
opinion). If a Federal Rule is “sufficiently broad to control the issue before the
Court,” Walker v. Armco Steel Corp., 446 U.S. 740, 749–50 (1980), “it governs . . .
unless it exceeds statutory authorization” under the Rules Enabling Act or
“Congress’s rulemaking power” under the Constitution. Shady Grove, 559 U.S. at
398. “If no Federal Rule answers the question in dispute, we undertake an
‘unguided Erie’11 inquiry to decide whether to apply the state statute or federal
11
Erie R. Co. v. Tompkins, 304 U.S. 64 (1938).
23
Case: 17-15547 Date Filed: 04/29/2019 Page: 24 of 35
common law.” Carbone v. Cable News Network, 910 F.3d 1345, 1349 (11th Cir.
2018) (quoting Hanna v. Plumer, 380 U.S. 460, 471 (1965)). That choice-of-law
inquiry requires us to “apply Erie and its progeny to determine ‘whether failure to
apply the state law would lead to different outcomes in state and federal court and
result in inequitable administration of the laws or forum shopping.’” Royalty
Network, Inc. v. Harris, 756 F.3d 1351, 1358 (11th Cir. 2014) (quoting Burke v.
Smith, 252 F.3d 1260, 1265 (11th Cir. 2001)).
1. The Scopes of O.G.C.A § 9-11-68(e) and Rule 11 of the Federal Rules of
Civil Procedure
Under the applicable framework, federal courts exercising diversity
jurisdiction must apply O.C.G.A. § 9-11-68(e). The question in dispute is whether
Showan is entitled to compensatory damages, including attorney’s fees and
litigation expenses, for the injury she purportedly suffered as a result of
Defendants’ alleged frivolous litigation conduct. Rule 11 does not answer this
question.
Rule 11(b) provides:
By presenting to the court a pleading, written motion, or other paper
. . . an attorney or unrepresented party certifies that to the best of the
person’s knowledge, information, and belief, formed after an inquiry
reasonable under the circumstances:
(1) it is not being presented for any improper purpose, such as
to harass, cause unnecessary delay, or needlessly increase the
cost of litigation;
24
Case: 17-15547 Date Filed: 04/29/2019 Page: 25 of 35
(2) the claims, defenses, and other legal contentions are
warranted by existing law or by a nonfrivolous argument for
extending, modifying, or reversing existing law or for
establishing new law;
(3) the factual contentions have evidentiary support or, if
specifically so identified, will likely have evidentiary support
after a reasonable opportunity for further investigation or
discovery; and
(4) the denials of factual contentions are warranted on the
evidence or, if specifically so identified, are reasonable based
on the belief or a lack of information.
If an attorney or unrepresented party breaches its duty under Rule 11(b) by
filing a pleading that fails to comply with any of the substantive standards of that
rule, Rule 11(c) kicks in. The applicable sections of Rule 11(c) provide:
If, after notice and a reasonable opportunity to respond, the court
determines that Rule 11(b) has been violated, the court may impose an
appropriate sanction on any attorney, law firm, or party that violated
the rule or is responsible for the violation.
***
A sanction imposed under this rule must be limited to what suffices to
deter repetition of the conduct or comparable conduct by others
similarly situated. The sanction may include nonmonetary directives;
an order to pay a penalty into court; or, if imposed on motion and
warranted for effective deterrence, an order directing payment to the
movant of part or all of the reasonable attorney’s fees and other
expenses directly resulting from the violation.
Fed. R. Civ. P. 11(c)(1), (4). Rule 11(c)(1) licenses the court to “impose an
appropriate sanction” on an attorney or unrepresented party “after notice and a
reasonable opportunity to respond.” “A sanction imposed under [Rule 11] must be
limited to what suffices to deter repetition of the conduct or comparable conduct by
others similarly situated.” Fed. R. Civ. P. 11(c)(4). If an opposing party moved
25
Case: 17-15547 Date Filed: 04/29/2019 Page: 26 of 35
for sanctions, Rule 11(c)(4) permits a court to issue “an order directing payment to
the movant of part or all of the reasonable attorney’s fees and other expenses” as a
sanction for a violation of Rule 11(b). Id. But the order must be “warranted for
effective deterrence,” and the attorney’s fees and expenses must “directly result[]
from the violation” of Rule 11(b). Id.
Rule 11 does not speak to whether a prevailing party is entitled to
compensatory damages to remedy any injury inflicted on the prevailing party by
the opposing party’s frivolous or bad-faith claims and defenses. Instead, Rule 11
answers the question whether punitive sanctions should be imposed on an attorney
or unrepresented party for filing a “pleading, written motion, or other paper” that
violates the certification standards of Rule 11(b). In contrast, § 9-11-68(e) confers
on a prevailing party a right to potential compensation for injuries sustained as a
result of an opposing party’s decision to raise “a frivolous claim or defense.”
O.C.G.A. § 9-11-68(e). It follows that § 9-11-68(e) does not “address the same
subject” as Rule 11. Cf. Shady Grove, 559 U.S. at 402.
The remedy created by § 9-11-68(e) is more akin to a state-law claim for
attorney’s fees. We have said such claims are unequivocally substantive for Erie
purposes. See Trans Coastal Roofing Co., Inc. v. David Boland, Inc., 309 F.3d
758, 760 (11th Cir. 2002); McMahan v. Toto, 256 F.3d 1120, 1132 (11th Cir. 2001)
(“It is clear that statutes allowing for recovery of attorney’s fees are substantive for
26
Case: 17-15547 Date Filed: 04/29/2019 Page: 27 of 35
Erie purposes.”). Yet, as we have noted, the statute does more than provide only
for attorney’s fees: it is designed to make whole, through “damages,” a party that
had to defend against a frivolous claim or overcome a frivolous defense. The
finder of fact determines whether a claim or defense was frivolous. Indeed, § 9-
11-68(e) creates a special tort-like remedy, providing for a “separate bifurcated
hearing at which the finder of fact shall make a determination of whether such
frivolous claims or defenses were asserted and to award damages, if any, against
the party presenting such frivolous claims or defenses.” Although a party may
assert this “tort” only within an existing proceeding, the statute’s legal effect is still
to create a substantive individual right under state law that does not purport to
abrogate any procedural right conferred by the Federal Rules.
Nor can it be said that “the purposes underlying” Rule 11 “are sufficiently
coextensive with the asserted purposes of the [Georgia] statute to indicate that the
Rule occupies the statute’s field of operation so as to preclude its application in
federal diversity actions.” Burlington N. R.R. Co. v. Woods, 480 U.S. 1, 7 (1987).
Shady Grove counsels against an “approach to determining whether state and
federal rules conflict based on the subjective intentions of the state legislature,”
559 U.S. at 404, so we are concerned only with “the purpose” that can be “derived
from the text” of Rule 11 and § 9-11-68(e) in conducting this inquiry. See Antonin
Scalia & Bryan A. Garner, Reading Law § 2, 56 (2012). Rule 11 imposes a duty
27
Case: 17-15547 Date Filed: 04/29/2019 Page: 28 of 35
on attorneys and unrepresented parties to certify that, to the best of their
knowledge, their filings are or will be supported by the evidence and the law and
are not made for any “improper purpose.” Fed. R. Civ. P. 11(b). The rule allows
courts to enforce this duty through appropriate sanctions, with the aim of deterring
future misconduct. See Fed. R. Civ. P. 11(c)(4) (“A sanction imposed under this
rule must be limited to what suffices to deter repetition of the conduct or
comparable conduct by others similarly situated” and any award of “attorney’s fees
and other expenses” must be “warranted for effective deterrence.”). Sometimes
Rule 11 sanctions are nonmonetary, and frequently they are penalties paid to the
court rather than to the other party. Id. (“The sanction may include nonmonetary
directives.”); Fed. R. Civ. P. 11(b) and (c) advisory committee’s note to 1993
amendment (“Since the purpose of Rule 11 sanctions is to deter rather than to
compensate, the rule provides that, if a monetary sanction is imposed, it should
ordinarily be paid into court as a penalty.”). 12
In contrast, § 9-11-68(e) compensates prevailing parties for litigation costs
and other injuries endured because of an opposing party’s decision to present
meritless or bad-faith claims or defenses. That compensatory purpose is why the
12
The text of a given rule is what is authoritative. Nevertheless, “[h]aving been prepared
by a body of experts, the Notes are assuredly persuasive scholarly commentaries—ordinarily the
most persuasive—concerning the meaning of the Rules.” Tome v. United States, 513 U.S. 150,
167 (1995) (Scalia, J., concurring in part and concurring in the judgment).
28
Case: 17-15547 Date Filed: 04/29/2019 Page: 29 of 35
statute says that a prevailing party that has been forced to defend against a
“frivolous claim or defense” is entitled to “damages” that are not capped at what is
required to deter comparable litigation conduct. See O.C.G.A. § 9-11-68(e).
It follows that Rule 11 and § 9-11-68(e) have categorically distinct purposes.
Deterrence is forward-looking and concerned with preventing future violations of a
rule. Compensatory relief, in contrast, is backward-looking and aims “to place an
injured party in the same position as it would have been in had there been no
injury.” Action Marine, Inc. v. Continental Carbon, Inc., 481 F.3d 1302, 1316
(11th Cir. 2007) (quoting Home Ins. Co. v. N. River Ins. Co., 385 S.E.2d 736, 742
(Ga. 1989)). Rule 11 is not designed to make the movant whole for any and all
injuries sustained as a result of a frivolous filing, and any monetary sanctions one
party happens to receive from the other are incidental to the rule’s deterrent
purpose.
Defendants focus on Royalty Network, Inc. v. Harris, 756 F.3d 1351 (11th
Cir. 2014), where we examined the relationship between Rule 11 and another
Georgia statute, O.C.G.A. § 9-11-11.1(b) (1998). Section 9-11-11.1 is “Georgia’s
anti-SLAPP [Strategic Lawsuits Against Public Participation] statute[, ] intended
to protect its citizens from having their important First Amendment rights to free
speech and to petition the government chilled by the threat of being dragged into
onerous judicial proceedings by improper or abusive tort claims.” Id. at 1357. At
29
Case: 17-15547 Date Filed: 04/29/2019 Page: 30 of 35
the time of Royalty Network,13 the statute required, for claims that could
conceivably be related to a person’s free-speech rights, that “both a plaintiff and
plaintiff’s counsel [] file a written verification certifying that the claim is well
grounded in fact, is warranted under existing law, and . . . is not made for an
improper purpose.” 756 F.3d at 1354. Rule 11 requires counsel to sign a
represented party’s pleadings, but it does not require the represented party to do so.
See Fed. R. Civ. P. 11(a). We thus concluded that § 9-11-11.1(b)’s “requirements
for filing a complaint or pleading directly conflict with the procedure for filing a
pleading specified in the federal rule, and the two may not peacefully co-exist or
operate in the same case.” 756 F.3d at 1359–60. Section 9-11-11.(b) governed the
procedure for signing a pleading. But § 9-11-68(e) concerns something very
different: a hearing on damages incurred as a result of litigating against frivolous
claims, defenses, or positions. Royalty Network shines no light on this case.
Finally, Defendants point us to Rule 11’s 21-day safe-harbor provision.
That provision provides that a motion for sanctions under Rule 11 “must not be
filed or be presented to the court if the challenged paper, claim, defense,
contention, or denial is withdrawn or appropriately corrected within 21 days after
service [of the challenged document] or within another time the court sets.” Fed.
13
The statute was amended substantially in 2016. After this appeal was docketed, we
decided the revised statute also conflicted with portions of the Federal Rules of Civil Procedure.
See generally Carbone v. Cable News Network, 910 F.3d 1345 (2018).
30
Case: 17-15547 Date Filed: 04/29/2019 Page: 31 of 35
Rawle Civ. P. 11(c)(2). But the existence of this provision is irrelevant to our inquiry.
Only if the federal rules “answer[] the question in dispute,” Shady Grove, 558 U.S.
at 398, do we concern ourselves with the extent to which a state law imposes
requirements different from the federal rules. For the reasons we have articulated,
Rule 11 does not control the dispute at issue. We conclude that there is no conflict
between Rule 11 and § 9-11-68(e).
2. Erie Concerns
We now move to the second part of the Hanna test and examine Erie’s
concerns about the potential for inequitable administration of justice and forum
shopping. See Burke, 252 F.3d at 1265. Those concerns are acutely present here.
If we failed to recognize the right to a bifurcated hearing under § 9-11-68(e), a
defendant who removed a Georgia diversity tort case would divest plaintiffs of
their right under Georgia law to have the finder of fact examine alleged frivolity
and to recover the damages to which the statute entitles them. Cf. Fed. R. Civ. P.
11(d) advisory committee’s note to 1993 amendment (“Rule 11 is not the exclusive
source for control of improper presentations of claims, defenses, or contentions. It
does not supplant statutes permitting awards of attorney’s fees to prevailing parties
or alter the principles governing such awards.”); Alyeska Pipeline Serv. Co. v.
Wilderness Soc’y, 421 U.S. 240, 260 n.31 (1975) (“[T]his Court [has] held that a
state statute requiring an award of attorneys’ fees should be applied in a case
31
Case: 17-15547 Date Filed: 04/29/2019 Page: 32 of 35
removed from the state courts to the federal courts . . . . It would be at least
anomalous if this policy could be thwarted and the right so plainly given destroyed
by removal of the cause to the federal courts.” (quoting People of Sioux Cty. v.
Nat’l Sur. Co., 276 U.S. 238, 243 (1928)).
***
Ultimately, we find no conflict between Rule 11 and § 9-11-68(e). They do
not “address the same subject.” Shady Grove, 559 U.S. at 402. Failure to allow
for § 9-11-68(e) hearings would induce forum shopping by defendants seeking to
avoid those hearings. We therefore hold that O.C.G.A. § 9-11-68(e) is substantive
law that applies when federal courts exercise their diversity jurisdiction in tort
cases governed by Georgia law. Because this case is such a case, the statute
applies here.
C. Whether the District Court Should Have Held a Bifurcated Hearing
Having concluded that O.C.G.A. § 9-11-68(e) applies here, we next decide
whether Showan was entitled to the hearing she requested. We conclude she was
so entitled.
Section 9-11-68(e) provides, “Upon motion by the prevailing party at the
time that the verdict or judgment is rendered, the moving party may request that
the finder of fact determine whether the opposing party presented a frivolous claim
or defense.” In other words, the prevailing party may move, at the time of the
32
Case: 17-15547 Date Filed: 04/29/2019 Page: 33 of 35
verdict or entry of judgment, for the finder of fact determine the frivolity of the
other side’s claim or defenses. “In such event, the court shall hold a separate
bifurcated hearing at which the finder of fact shall make a determination of
whether such frivolous claims or defenses were asserted and to award damages, if
any, against the party presenting such frivolous claims or defenses.” Id. (emphasis
added). The statute uses the permissive “may” when describing the prevailing
party’s ability to move for fees, but it uses the mandatory “shall” in describing the
court’s obligation to hold the bifurcated hearing upon the party’s motion. “The
word ‘shall’ is ordinarily ‘The language of command’. And when the same Rule
uses both ‘may’ and ‘shall’, the normal inference is that each is used in its usual
sense—the one act being permissive, the other mandatory.” Anderson v. Yungkau,
329 U.S. 482, 485 (1947) (citation omitted); accord O’Donnell v. Durham, 573
S.E.2d 23, 24 (Ga. 2002) (“‘Shall’ is generally construed as a word of mandatory
import.”). A district court has no discretion to decline the prevailing party’s
request under § 9-11-68(e) if the party makes it. The district court thus erred in
denying Showan’s motion.
Defendants contend any error was harmless, see Rule 61 of the Federal
Rules of Civil Procedure,14 because Showan failed to make any showing of
14
“Unless justice requires otherwise, no error in admitting or excluding evidence—or any
other error by the court or a party—is ground for granting a new trial, for setting aside a verdict,
or for vacating, modifying, or otherwise disturbing a judgment or order.” Fed. R. Civ. P. 61.
33
Case: 17-15547 Date Filed: 04/29/2019 Page: 34 of 35
frivolity. In light of the mandatory language of the statute, we decline to comment
on this contention. Showan had a statutory entitlement to the hearing, and denying
her that hearing affected her substantial rights. Moreover, whether Showan
demonstrated that Defendants acted frivolously is a matter for the finder of fact
under Georgia law.
Defendants further contend that there is no need for an entirely new trial.
They argue that “under Georgia law, attorney’s fees are a distinct and ancillary
award, determination of which should not disrupt a judgment on the merits.” But
Defendants’ argument proves too much. Any award under § 9-11-68(e) is
ancillary to the judgment precisely because it is based on the losing party’s conduct
during the course of the litigation that led to that judgment. A new factfinder
would be blind to that conduct. Because the statute requires the prevailing party to
move for a hearing “at the time the verdict or judgment is rendered,” it plainly
contemplates that arguments regarding frivolity belong before the same factfinder
that renders the underlying verdict or judgment.
Nor are we persuaded by Defendants’ citation to Richardson v. Locklyn, 793
S.E.2d 640 (Ga. Ct. App. 2016), where the court examined O.C.G.A. § 9-11-
“At every stage of the proceeding, the court must disregard all errors and defects that do not
affect any party’s substantial rights.” Id.
34
Case: 17-15547 Date Filed: 04/29/2019 Page: 35 of 35
68(d)15 and concluded it could remand for a hearing only on attorney’s fees rather
than a new trial. 793 S.E.2d at 644. Fees under § 9-11-68(d) are awarded by the
court; fees under § 9-11-68(e) are awarded by the finder of fact. That the same
statute specifically differentiates between who awards fees in different
circumstances serves only to strengthen our conclusion.
The district court erred in determining “as a matter of law” that the pleadings
were not frivolous. Georgia has made clear that such a determination is for the
finder of fact. It has also made clear that the prevailing party has a right to a
hearing if it requests one. Because the statute requires the same factfinder at both
the trial on the merits and the hearing on frivolity, Showan is entitled to a new trial
and the opportunity, if she prevails again, to move for a hearing under § 9-11-
68(e).
VIII. CONCLUSION
We AFFIRM in part, VACATE in part, and REMAND for a new trial
consistent with this opinion.
15
We discuss the substantive differences between the statutory subsections further in note
9.
35