Travelers Property Casualty Company of America v. Srm Group, Inc.

FIFTH DIVISION
McFADDEN, C. J.,
RICKMAN and COLVIN, 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.
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November 25, 2020
In the Court of Appeals of Georgia
A18A1418. TRAVELERS PROPERTY CASUALTY COMPANY
OF AMERICA v. SRM GROUP, INC.
COLVIN, Judge.
In 2019, the Supreme Court of Georgia granted SRM Group, Inc.’s petition for
certiorari in order to consider whether this Court had properly reversed a jury’s
verdict in favor of SRM Group on its compulsory counterclaim against Travelers
Property Casualty Company of America for attorney fees under OCGA § 13-6-11. See
Travelers Prop. Casualty Co. of America v. SRM Group, Inc., 348 Ga. App. 136, 141-
142 (2) (820 SE2d 261) (2018), cert. granted, August 5, 2019. On certiorari, our
Supreme Court overruled the precedent on which this Court had relied and reversed
Division 2 of our opinion. SRM Group, Inc. v. Travelers Prop. Casualty Co. of
America, 308 Ga. 404, 410 (3) (841 SE2d 729) (2020), overruling cases including
Byers v. McGuire Props., Inc., 285 Ga. 530, 540 (6) (679 SE2d 1) (2009).1
On remand from our Supreme Court, we adopt its decision on this issue as our
own. Because our original opinion reversed only as to SRM’s counterclaim for
attorney fees, see 348 Ga. App. at 145 (2), we now affirm the judgment of the trial
court in full.
Judgment affirmed. Rickman, J., concur. McFadden, C. J. concurs specially.
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Travelers had raised a challenge to the evidentiary basis of the jury’s award
under OCGA § 13-6-11, which our Division 3 mooted in light of our conclusion in
Division 2 that attorney fees under that statute were not authorized for compulsory
counterclaims such as SRM’s. Travelers Prop. Casualty Co., 348 Ga. App. at 141-
142 (2), (3). Our Supreme Court’s opinion addressed only Division 2 of our decision,
and noted that “[n]o party sought certiorari regarding the other portions of the Court
of Appeals opinion, so those parts of the Court of Appeals judgment are not affected
by our decision.” SRM Group, 308 Ga. at 405 (1), n. 1. Under these circumstances,
we have nothing further to review.
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A18A1418. TRAVELERS PROPERTY CASUALTY COMPANY
OF AMERICA v. SRM GROUP, INC.
MCFADDEN, Chief Judge, concurring specially.
I agree with the majority’s ultimate conclusion: in light of the decision of our
Supreme Court, we must now affirm. But I do not agree with the majority’s
determination that there is nothing further we need to review before reaching that
conclusion.
“Based on our holding in Division 2,” we wrote in our former opinion, “we
need not address Travelers’ other enumerations of error pertaining to the award of
attorney fees to SRM.” Travelers Property Cas. Co. of America v. SRM Group, 348
Ga. App. 136, 142 (3) (820 SE2d 261) (2018). Now that Division 2 of our former
opinion has been reversed, we must address those other enumerations of error.
So I concur specially.
1. Our responsibilities upon remand from the Supreme Court.
In Shadix v. Carroll County, 274 Ga. 560 (554 SE2d 465) (2001), our Supreme
Court set out the three steps we must take after that Court reverses one of our
opinions:
when faced with the . . . reversal of one of [our] opinions, [we are]
required: (1) to read [the Supreme] Court’s opinion within the context
of the opinion being reversed; (2) to determine whether any portions of
the opinion being reversed were neither addressed nor considered by the
Supreme Court; and (3) [to] enter an appropriate disposition with regard
to those portions that is consistent with the issues addressed and
considered by [the Supreme] Court.
Id. at 563-564 (1). So after we are reversed by our Supreme Court, we must issue an
opinion on remand that reconciles our former opinion with theirs. We must assure
that any portion of our former opinion not expressly addressed or considered in theirs
is made consistent with theirs. In particular we must “determine the impact of the
reversal on our previous decision and . . . resolve any reopened issues.” St. Paul
Reinsurance Co. v. Ross, 276 Ga. App. 135, 136 n.1 (622 SE2d 374) (2005). See
Stevens v. Wakefield, 163 Ga. App. 40 (292 SE2d 516) (1982) (“The issues submitted
by the remaining enumerations of error which were rendered moot by our previous
decision are reopened by the decision of the Supreme Court.”). And we must not
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interpret the Supreme Court opinion in such a way as to make our opinion internally
inconsistent. Cf. Terrell v. Payne, 280 Ga. 51, 51-52 (622 SE2d 330) (2005).
2. Reopened enumerations of error.
So we must now address the enumerations of error that we previously declined
to address. After reading both opinions, we must “determine whether any portions of
the opinion being reversed were neither addressed nor considered by the Supreme
Court[.]” Shadix, 274 Ga. at 563-564 (1). An issue has been addressed or considered
if it is discussed in the opinion or if it is identified in the grant of certiorari even
though not discussed in the opinion. See id. at 563 n. 13 (1).
On certiorari, our Supreme Court overturned a line of case that had limited the
categories of litigants entitled to attorney fees under OCGA § 13-6-11. It had granted
certiorari to address the question “whether the Court of Appeals correctly determined
that a plaintiff-in-counterclaim asserting a compulsory counterclaim is precluded
from seeking an award for the expenses of litigation under OCGA § 13-6-11.” 308
Ga. at 405 (1). The soundness of that line of cases, which we had followed in
Division 2 of our former opinion, was the only issue upon which the Court granted
certiorari and the only issue it discussed in its opinion. The Court neither addressed
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nor considered Division 3 of our former opinion, in which we held that Travelers’
other enumerations of error regarding the attorney fees award were moot.
So we must proceed to step three of the Shadix framework and “enter an
appropriate disposition with regard to [that Division] that is consistent with the [only]
issue[] addressed and considered by [the Supreme] Court.” Shadix, 274 Ga. at 564(1).
Since the Supreme Court reversed our Division 2, our Division 3 — which was
“[b]ased on our holding in Division 2,” 348 Ga. App. at 142 (3) — is inconsistent
with the only issue the Supreme Court addressed. Should we fail to address the
“reopened issues,” St. Paul Reinsurance Co., 276 Ga. App. at 136 n.1, that we
previously declined to address, then our opinion would be internally inconsistent: it
would reject Travelers’ argument that a plaintiff-in-counterclaim asserting a
compulsory counterclaim is precluded from seeking an award for the expenses of
litigation under OCGA § 13-6-11, but nonetheless deem moot Travelers’ other
challenges to the OCGA § 13-6-11 award, based on the adoption of that now-rejected
argument.
The majority declines to address the two enumerations of error we deemed
moot on the basis of footnote one to the Supreme Court’s opinion. In that footnote,
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the Court held, “[n]o party sought certiorari regarding the other portions of the Court
of Appeals opinion, so those parts of the Court of Appeals judgment are not affected
by our decision.” 308 Ga. at 405 (1) n. 1. But that footnote simply confirms that our
Division 3 declining to address Travelers’ other enumerations of error was not
implicated in the grant of certiorari. And the Supreme Court did not discuss our
Division 3 in its opinion. So we must now “enter an appropriate disposition.” Shadix,
274 Ga. at 564 (1).
3. Merits of the reopened enumerations.
As for the merits of Travelers’ other two enumerations of error pertaining to
the award of attorney fees to SRM, neither requires reversal of the jury’s verdict.
Travelers’ enumeration that it is entitled to a judgment notwithstanding the
verdict on the attorney fees counterclaim because it is entitled to a judgment
notwithstanding the verdict on its breach of contract counterclaim is foreclosed by
our affirmance of the breach of contract verdict in Division 1 of our opinion. 348 Ga.
App. at 139-141 (1). I would now hold that it fails for that reason.
Also without merit is Travelers’ enumeration that it is entitled to a judgment
notwithstanding the verdict on the attorney fees counterclaim because SRM failed to
adduce any evidence of Travelers’ bad faith. As we stated in our prior opinion,
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[o]n appeal from the denial of a motion for judgment notwithstanding
the verdict, we construe the evidence in the light most favorable to the
party opposing the motion, and the standard of review is whether there
is any evidence to support the jury’s verdict. Furthermore, a motion for
judgment notwithstanding the verdict should not be granted unless there
is no conflict in the evidence as to any material issue and the evidence
introduced, with all reasonable deductions therefrom, demands a certain
verdict. A verdict will not be set aside where the evidence construed in
favor of the verdict supports it, however slightly.
Travelers Property Cas. Co. of America, 348 Ga. App. at 139-40 (citations and
punctuation omitted).”Expenses of litigation, including attorney fees, are recoverable
under § 13-6-11 when a party has acted in bad faith[, ]has been stubbornly litigious,
or has caused the other party unnecessary trouble and expense. An award of attorney
fees under OCGA § 13-6-11 will be affirmed if there is any evidence to support it.”
City of Hoschton v. Horizon Communities, 287 Ga. 567, 569 (3) (697 SE2d 824)
(2010) (citation and punctuation omitted).
In our former opinion, we stated that the increased workers’ compensation
insurance premium that was the basis of the parties’ dispute resulted from an audit of
SRM’s employee risk classifications and Travelers’ refusal to reclassify those
employees. Travelers Property Cas. Co. of America, 348 Ga. App. at 136. We stated
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that “Suresh Prabhu, who was SRM’s chief executive officer and sole owner, and
John Oxendine, a former insurance commissioner for the [s]tate of Georgia who was
qualified as an expert in employee classification for insurance purposes, both
testified” that after the audit, Travelers misclassified certain SRM employees. Id. at
138. We stated that
[o]ther than the issue of whether SRM had breached the contract by
failing to pay any portion of the retroactive premium increase, the
primary focus of the trial was Travelers’ handling of the 2013 audit and
Travelers’ subsequent refusal to reclassify . . . employees. To that end,
Travelers’ auditor, Larry Grasso, testified that he initiated the employee
classification process by reviewing the job descriptions as they appeared
in SRM’s payroll documents that were generated by an outside payroll
company and by referring to insurance trade publications. He testified
that he finalized the employee classification process after having one
short conversation and several follow-up e-mails with an administrative
assistant who worked in SRM’s head office. Although Grasso testified
that an employee’s risk classification depended on his or her particular
job requirements and work environment, he acknowledged that he never
visited SRM’s worksites or spoke with anyone at SRM regarding its
employees’ job requirements or work environment. Rather, Grasso
claimed that worksite visits and employee interviews were not necessary
because, under the normal auditing process, he would get the required
information from the owner of the business. Notably, however, Grasso
testified that he decided not to contact Prabhu in this case. Furthermore,
Grasso’s testimony seemed to indicate that he harbored a certain level
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of indignation toward Prabhu because Prabhu did not meet with him
personally during the auditing process.
Id. at 138-139. We noted that Prabhu testified that he provided information about the
classifications “to Travelers, that Travelers apparently would not consider this
information, and that Travelers simply ignored him both during and after the audit
resulting in the retroactive premium increase[,]” id. at 139, which, according to SRM,
“was twenty times the price that Travelers had estimated it would be[.]” Id. at 137.
I would hold that, from this evidence, “the jury could have concluded [that
Travelers’] actions fell within OCGA § 13-6-11, [so] the trial court did not err when
it denied [Travelers’] motion for [judgment notwithstanding the] verdict.” Forsyth
County v. Martin, 279 Ga. 215, 219 (2) (b) (610 SE2d 512) (2005).
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