EARLS v. ANEKE Et Al.

THIRD DIVISION
DILLARD, C. J.,
GOBEIL and HODGES, JJ.
NOTICE: Motions for reconsideration must be
physically received in our clerk’s office within ten
days of the date of decision to be deemed timely filed.
http://www.gaappeals.us/rules
June 14, 2019
In the Court of Appeals of Georgia
A19A0329. EARLS. v. ANEKE et al.
DILLARD, Chief Judge.
Anthony Earls appeals from the trial court’s grant of summary judgment to
Princewill Aneke, individually, and Aneke Law Offices, LLC, as an assignee of
Princewill O. Aneke, LLC, now known as Sunshine Real Estate Properties I, LLC
(collectively, “Aneke”). Earls argues, inter alia, that the trial court erred by denying
his motion for summary judgment based on a mischaracterization of his arguments
and, accordingly, failing to adjudicate the arguments underlying his motion for
summary judgment. Because we agree with Earls that the trial court failed to properly
consider his primary argument in favor of summary judgment, we vacate the trial
court’s order and remand for the reasons set forth infra.
Viewed in the light most favorable to Earls (i.e., the nonmoving party),1 the
record shows that Earls and his wife were involved in an automobile accident in
March 2015 when the big-rig truck his wife was driving for her employer was struck
by another commercial vehicle. Earls sustained multiple injuries in the accident,
resulting in significant medical expenses.2 Shortly after the collision, Earls was taken
by a friend to a chiropractor’s office, where he met Portia Rolland, a paralegal from
a local law firm. During his meeting with Rolland, Earls signed an attorney-client
contract. The validity of this agreement is at the heart of the parties’ dispute.
The agreement provided that Earls hired “Princewill Aneke of Princewill O.
Aneke, L.L.C. (‘THE FIRM’), as my attorney, to represent me against all persons or
entities for the injuries I sustained on, or about the 30th day of March, 2015,” and
further provided as follows:
I agree to pay the Firm thirty-three (33 1/3%) percent of the gross
recovery made for me in the event such recovery is obtained without the
necessity of filing a lawsuit or utilizing mediation, arbitration or other
alternative dispute resolutions. Should my recovery occur after a lawsuit
1
See, e.g., Stanley v. Gov’t Employees Ins. Co., 344 Ga. App. 342, 342 (810
SE2d 179) (2018).
2
Earls’s wife was also injured in the accident, but she is not a party to this
appeal.
2
is filed, or mediation or arbitration held, then I agree to pay the Firm
forty (40%) percent of the gross recovery.
The agreement also provided that
Client may dismiss the Firm at any time, upon written notice to the Firm.
Client agrees that should they dismiss the Firm from representing them
in their claim herein, Client would remain liable to the Firm, and
herewith irrevocably assign to the Firm, the applicable percentage of fee
due the Firm under this Agreement of the highest offer that was made by
any adversary or collateral party during the Firm’s employment by
Client. In the event no offer has been made, Client agrees to pay [F]irm
attorney fees for the time firm has expended working on Client’s case,
to be assessed at the rate of one hundred fifty dollars per hour.
The agreement was signed by Earls and Rolland on behalf of the firm. Rolland
was employed by the firm as an independent contractor paralegal, and the terms of
her agreement with the firm specified that, as part of the services she would provide,
she would “[a]ct as an agent of the law firm in respect to dealing with prospective
new clients[.]” As part of the scope of her agency, Rolland was permitted to “[e]nter
into binding agreements on behalf of the law firm by signing contracts between the
law firm and clients who have agreed to retain the services of the law firm.”
3
On March 20, 2016, Aneke received in writing an offer to settle Earls’s claim
for $500,000, and Earls was then presented with this offer. Around this same time,
Earls became dissatisfied with the representation he was receiving from Aneke, and
on May 17, 2016, Earls notified Aneke in writing, through his new counsel, that
Aneke’s services were terminated, effective immediately. Then, just three days after
sending this termination notice via his new counsel, Earls received an updated
settlement offer of the defending insurance agency’s remaining policy limits, and he
ultimately received a settlement check for $662,380.99.
In March 2017, Aneke filed suit against Earls for breach of contract, quantum
meruit,3 and seeking attorney fees and costs of litigation under OCGA § 13-6-11.4
Earls answered, asserting as his defenses that, inter alia, he was not liable to Aneke
because “no contract for legal services ever existed since neither the individual
Plaintiff nor any member of either of the named limited liability companies signed the
3
Aneke pleaded quantum meruit in the alternative, and Earls has never
contested that Aneke may be entitled to relief on this ground.
4
See OCGA § 13-6-11 (“The expenses of litigation generally shall not be
allowed as a part of the damages; but where the plaintiff has specially pleaded and has
made prayer therefor and where the defendant has acted in bad faith, has been
stubbornly litigious, or has caused the plaintiff unnecessary trouble and expense, the
jury may allow them.”).
4
purported contract that is the subject of this litigation” and “the subject contract was
never effectuated by an individual or firm licensed and authorized to practice law in
Georgia.”
Aneke filed a motion for summary judgment in May 2018, arguing that the
agreement signed by Earls was binding and valid, obligating Earls to perform under
its terms; that the contract was signed by Rolland as an agent for the firm, and that
she had apparent and actual authority to bind the firm to a contract; and that Aneke’s
new law firm, Aneke Law Offices, LLC, was the successor in interest to the former
Princewill O. Aneke, LLC.
In response to Aneke’s motion, Earls argued that the agreement between the
parties could not have been valid or binding because the former firm was incapable
of performing legal services, as “it had not been formed and designated as a
professional corporation, and hence never existed at any time, including the date of
signing of the subject contract, as a professional corporation that was authorized to
practice law in Georgia.” Then, in June 2018, Earls filed his own motion for summary
judgment, again arguing that Princewill O. Aneke, LLC, and its successor following
a name change, Sunshine Real Estate Properties I, LLC, were not professional
corporations for the purpose of practicing law.
5
In response to Earls’s motion for summary judgment, Aneke argued that
Rolland signed the contract at issue on behalf of Princewill O. Aneke, LLC, and had
actual authority to do so, and that his former law firm, Princewill O. Aneke, LLC,
properly entered into the agreement. Aneke also asserted that, on the day after Earls
received the $500,000 offer of settlement, he restructured his law practice and other
businesses by incorporating Aneke Legal Services, LLC, in order to continue the
operation of his law practice after changing the name of Princewill O. Aneke, LLC,
to Sunshine Real Estate Properties I, LLC. Then, Aneke incorporated Aneke Law
Offices, LLC, to use in lieu of Aneke Legal Services, LLC.
In response to Aneke’s opposition to the cross-motion for summary judgment,
Earls argued that because Aneke’s former law firm, Princewill O. Aneke, LLC, was
a limited liability company, and not a professional corporation, Earls could not enter
into a binding contract with the firm for the provision of legal services because the
firm itself, as an LLC, could not provide legal services. Thus, because only Aneke
was a licensed attorney, in order for the contract to be valid, it needed to be signed
by Aneke and not by Rolland.
Following a hearing on the competing motions, the trial court issued an order
on July 24, 2018. First, the trial court explained its understanding to be that Earls was
6
arguing (1) “Rolland did not have authority to enter into the contract for the Firm, and
that the contract is therefore null and void” and (2) that the firm and its successor
assignees could not practice law because they were not incorporated as professional
corporations. The court then concluded that Rolland had authority to sign on behalf
of the law firm and entered into a binding contract as its agent, and denied summary
judgment to Earls and granted summary judgment to Aneke on that basis. Then, the
court concluded that because Aneke was a licensed attorney in good standing, he was
permitted to practice law with a firm in the form of a limited liability company, and
it denied Earls’s motion on this ground. The court also denied Earls’s motion on the
ground that this Court has “expressly approved attorney-client contracts containing
provisions almost exactly like” the paragraph at issue, and it denied summary
judgment to Earls on that ground as well. Ultimately, the court declared that it was
denying Earls’s motion, granting Aneke’s motion, and awarding a judgment to Aneke
in the amount of the requested $166,666.66, plus court costs. This appeal by Earls
follows.
Summary judgment is proper if “the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show that
there is no genuine issue as to any material fact and that the moving party is entitled
7
to a judgment as a matter of law.”5 And when summary judgment is granted, the order
“enjoys no presumption of correctness on appeal, and it is our responsibility to
determine if the requirements of OCGA § 9-11-56 (c) have been satisfied.”6 In other
words, in conducting this de novo review, we are “charged with viewing the evidence,
and all reasonable conclusions and inferences drawn from the evidence in the light
most favorable to the nonmovant.”7 With these guiding principles in mind, we turn
now to Earls’s enumerations of error.
1. First, in separate but related enumerations of error, Earls contends that the
trial court erred in denying his motion for summary judgment when it
mischaracterized or misunderstood his contentions regarding PCs and LLCs, and,
accordingly, failed to adjudicate those arguments. We agree that the court did not
fully grasp what Earls argued as to PCs and LLCs, and because the trial court did not
rule upon this question, we vacate and remand for the court’s consideration of this
argument in the first instance.
5
Stanley, 344 Ga. App. at 343 (punctuation omitted).
6
Id.
7
Id. (punctuation omitted).
8
Earls maintains the trial court erroneously concluded that he argued “attorneys
are prohibited from the practice of law in the form of a Limited Liability Company
(although his own firm is organized as same),” and ultimately ruled that the law does
not prohibit same. But instead, what Earls argued is that “a limited liability company,
itself, may not practice law unless it is organized under the Professional Corporations
Act . . . or the Professional Associations Act (requiring two or more members.” Earls
asserts that Princewill O. Aneke, LLC was never registered under the Professional
Corporations Act. As a result, Earls argues that Aneke himself—the only licensed
attorney who practiced as Princewill O. Aneke, LLC—was required to sign the
attorney-client contract at issue, which was instead signed by a layperson operating
as an independent contractor agent or employee of the firm.
The trial court never addressed this aspect of Earls’s argument, which also
relies upon and refers to various documents of incorporation and their timing’s impact
on the contract and, likewise, which entity was the real party in interest at the time
Aneke filed suit. For example, the certificate of organization for Princewill O. Aneke,
LLC, shows that it was organized as a “domestic limited liability company” on April
18, 2007. But a certificate of amendment, dated April 11, 2016, effectuated a name
change for Princewill O Aneke, LLC, to Sunshine Real Estate Properties I, LLC.
9
Aneke deposed that the name change to Sunshine Real Estate Properties I, LLC was
a mistake, and that he instructed for the name of his law practice to be changed to
Aneke Law Offices. And when this was not done, he newly incorporated Aneke Law
Offices. Aneke further testified to starting Sunshine Real Estate Properties because
he purchased multiple real estate properties in the name of Princewill O. Aneke, LLC,
and he decided it would be best to transfer those properties into the name of a real
estate corporation. The scope of services provided by Sunshine Real Estate Properties
is to own properties, dispose of properties, and “branch into any property-related
matters in the future.”8
On the other hand, Aneke also testified that, “to the best of [his] knowledge,”
his former law firm’s name was changed to Aneke Legal Services, and that Aneke
Legal Services, which later became Aneke Law Offices, carried the same tax ID that
belonged to Princewill O. Aneke, LLC. Additionally, Aneke executed a transfer and
assignment of rights and liabilities of Princewill O. Aneke, LLC, to Aneke Law
Offices, LLC, effective on June 14, 2016. He asserted that the purpose of the transfer
and assignment was to “continue under the new entity any relationships and contracts
8
Aneke’s wife, who is a medical doctor, is also a member of Sunshine Real
Estate Properties.
10
and legal work that had been done under Princewill O. Aneke, LLC[.]” But Aneke
agreed that, at the time the transfer and assignment was signed, Princewill O. Aneke,
LLC, was no longer an entity, its name already having changed to Sunshine Real
Estate Properties I, LLC.
As for Aneke’s other LLCs, the articles of incorporation for Aneke Legal
Services, LLC, show that it was organized as a “domestic limited liability company”
on March 31, 2016.9 And the certificate of organization for Aneke Law Offices, LLC,
shows that it was also organized as a “domestic limited liability company” on June
14, 2016.10
The trial court’s misapprehension of Earls’s argument resulted in it ruling
against him and in favor of Aneke. And now, Earls argues that the trial court erred
by misunderstanding or mischaracterizing his argument. But when this Court reviews
a decision of a trial court on a motion for summary judgment, it “sits as a court for the
9
The articles of incorporation did not include any optional provision with a
stated purpose for the company.
10
Within the articles of incorporation for Aneke Law Offices is a statement
included as an “optional provision” that the “purpose of the company is to practice
the profession of law and the company elects to be governed where applicable by the
provisions of OCGA § 14-7-1 et seq. Only a person authorized to practice law in the
State of Georgia and in good standing with the State Bar of Georgia and in good
standing with the State Bar of Georgia may be a member of the company.”
11
correction of errors of law.”11 And an error of law has as its basis a “specific ruling
made by the trial court.”12 Thus, because the trial court never considered Earls’s true
argument, it did not rule upon it.13 To be sure, there are instances when this Court will
review a record and determine that a summary judgment ruling was right for a reason
other than the one given by the trial court, but it is improper for us to consider
whether the trial court was “wrong for any reason.”14 Indeed, without a ruling on this
11
Piedmont Hosp., Inc. v. D. M., 335 Ga. App. 442, 448 (3) (779 SE2d 36)
(2015) (punctuation omitted).
12
Id. (punctuation omitted).
13
See Auto-Owners Ins. Co. v. Hale Haven Props., Inc., 346 Ga. App. 39, 54
(3) (a) (815 SE2d 574) (2018) (“Although both parties’ timeliness arguments were
raised in the trial court, the record does not show that the trial court addressed them.
Thus, if we were to conclude that the trial court erred, it would be on account of an
issue never ruled on below.” (punctuation omitted)); Nebo Ventures, LLC v. NovaPro
Risk Solutions, L.P., 324 Ga. App. 836, 848 (4) (752 SE2d 18) (2013) (“Although the
issue of an extension to the . . . Agreement was raised below by the evidence and by
[the] arguments in support of [the] motion for summary judgment, the trial court did
not address the matter in its summary judgment order. Thus, if we were to conclude
that the trial court erred, it would be on account of an issue never ruled on below.”).
14
See Auto-Owners Ins., 346 Ga. App. at 54 (3) (a) (“And although in certain
instances an appellate court can review a record and determine that a summary
judgment ruling was right for some reason other than that given by the trial court, an
appellate court should not consider whether the trial court was ‘wrong for any
reason.’” (punctuation omitted)); Piedmont Hosp., 335 Ga. App. at 449 (3) (same).
12
specific question, the issue is outside the proper scope of our review.15 Accordingly,
we vacate the trial court’s order granting summary judgment to Aneke and denying
summary judgment to Earls, and we remand for the trial court’s consideration of what
Earls actually argues, as discussed and detailed supra.
2. Because we vacate and remand in Division 1, we need not address Earls’s
remaining enumerations of error.
For all these reasons, we vacate the trial court’s order and remand for
proceedings consistent with this opinion.
Judgment vacated and case remanded with direction. Gobeil and Hodges, JJ.,
concur.
15
See Auto-Owners Ins., 346 Ga. App. at 54 (3) (a) (“These [unruled upon]
arguments are therefore beyond our proper scope of review.”); Piedmont Hosp., 335
Ga. App. at 449 (2) (“Here, the trial court expressly declined to rule on the issue of
whether [the appellants] are equitably estopped from asserting a statute of repose
defense based on its erroneous determination that no medical malpractice claims
remained. Because the trial court did not reach the issue of equitable estoppel in
denying the motions for summary judgment, we find that the issue is outside the
proper scope of our review in this appeal.”).
13