Tmx Finance Holdings, Inc. v. Drummond Financial Services, LLC

Court of Appeals
of the State of Georgia
ATLANTA,__April 30, 2015_________
The Court of Appeals hereby passes the following order:
A15E0025. TMX FINANCE HOLDINGS, INC. et al. v. DRUMMOND
FINANCIAL SERVICES, LLC et al.
The appellees (“the SMR Companies”) have moved for reconsideration of our
April 3, 2015 order granting TMX Finance Holdings, Inc. and the other appellants’s
(“TitleMax”) emergency motion to stay (i) the trial court’s February 26, 2015, order
disqualifying TitleMax’s trial counsel (the “Disqualification Order”), and (ii) the trial
court’s March 30, 2015 order requiring that TitleMax identify substitute counsel by
April 3, 2015. The SMR Companies contend that reconsideration is appropriate
because this Court overlooked controlling authority which would require a different
result. See Court of Appeals Rule 37 (e). For the reasons that follow, we vacate our
April 3, 2015 order.
In the Disqualification Order, the trial court found that TitleMax’s trial counsel,
Greenberg Traurig, LLP (“GT”), was in an ongoing attorney-client relationship with
Select Management Resources, LLC and its affiliates, which included the SMR
Companies, when GT undertook to represent TitleMax in defense of the SMR
Companies’ claims. The trial court ruled that GT had a duty to the SMR Companies
and could not continue to represent TitleMax in the litigation. The trial court
therefore granted the SMR Companies’ motion to disqualify GT, and it ordered that
TitleMax should report to the trial court “in thirty (30) days as to its efforts to secure
substitute counsel in the matter.”
This Court granted TitleMax’s application for interlocutory appeal from the
Disqualification Order on March 30, 2015. On the same day, the trial court issued an
order requiring TitleMax to identify substitute counsel by April 3, 2015. TitleMax
filed its notice of appeal from the Disqualification Order and the March 30, 2015
order in the trial court on March 31, 2015. The parties agree that supersedeas took
effect on April 2, 2015, when, following its filing of the notice of appeal, TitleMax
paid costs in the trial court. See OCGA §§ 5-6-34 (b) and 5-6-46.
TitleMax filed its “Rule 40 (b) Emergency Motion, Related to April 3, 2015
5:00 P.M. Deadline,” in this Court (the “Emergency Motion”) at approximately 6:00
p.m. on April 2, 2015. TitleMax argued, among other things, that their notice of
appeal served as supersedeas of the Disqualification Order, and that the trial court had
no jurisdiction to enforce the Disqualification Order or the March 30, 2015 order, and
had not ruled on TitleMax’s motion in the trial court to stay proceedings. Therefore,
TitleMax maintained, it was “faced with the Hobson’s Choice of either potentially
violating a court order or replacing their chosen trial counsel.” This Court granted
TitleMax’s request that the Disqualification Order and the March 30, 2015 order be
stayed pending appeal.
Our Supreme Court has held that
when a supersedeas is in effect . . . the efficacy of a verdict or judgment
is suspended. It has no retroactive effect, so as to deprive a verdict or
judgment of its force and authority from the beginning, but only
suspends the same thereafter and while it is effectual. Hence what is
lawfully done before the supersedeas is granted or becomes effective is
valid and stands, but anything done thereafter is unauthorized and must
be set aside.
(Emphasis supplied.) Tanner v. Wilson, 184 Ga. 628, 634 (192 SE 425) (1937). See
Avren v. Green, 289 Ga. 186, 190-191 (6) (710 SE2d 130) (2011) (Supersedeas of a
notice of appeal “deprives the trial court of the power to affect the judgment appealed,
so that subsequent proceedings purporting to supplement, amend, alter or modify the
judgment, whether pursuant to statutory or inherent power, are without effect.”)
(citation and punctuation omitted). It follows that, as the SMR Companies show, the
supersedeas in this case did not preclude the Disqualification Order from taking
effect.
It is true, as TitleMax contends, that “the supersedeas, during its pendency,
prevents any steps to enforce or carry into effect the judgment[.]” (Citation and
punctuation omitted.) Simmons v. Harms, 287 Ga. 176, 181 (3) (a) (695 SE2d 38)
(2010). TitleMax suggests that the executory portion of the Disqualification Order,
which requires that it identify substitute counsel within 30 days, cannot be enforced.
It appears, however, that the trial court intended that GT be immediately disqualified
and to then cease acting as TitleMax’s counsel, because it could not continue do so
consistently with the Georgia Rules of Professional Conduct, and that TitleMax be
afforded a reasonable time to secure new counsel. By allowing GT to continue to
represent TitleMax during the pendency of the appeal, our order granting emergency
relief altered, rather than maintained, the status quo.
The SMR Companies’ motion for reconsideration is GRANTED. Our order
of April 3, 2015, is VACATED. TitleMax’s Emergency Motion is DENIED.
Court of Appeals of the State of Georgia
Clerk’s Office, Atlanta,____4/30/2015________
I certify that the above is a true extract from
the minutes of the Court of Appeals of Georgia.
Witness my signature and the seal of said court
hereto affixed the day and year last above written.
, Clerk.