The Georgia Court of Appeals reinstated a verdict sharing liability for a half-million-dollar award in favor of national law firm Epstein, Becker & Green three ways, overturning the trial judge’s order clearing two of three defendants of responsibility for their legal bills.
Following a jury verdict holding all three defendants jointly liable, Fulton County State Court Judge John Mather granted a motion for judgment notwithstanding the verdict, ruling a corporate defendant that had already assumed liability for the debt was solely responsible.
But Appeals Court Judge Christopher McFadden, writing with the concurrence of Judges William Ray II and Brian Rickman, said the jury correctly concluded that all three defendants had agreed to assume responsibility for the legal fees in the firm’s engagement letter.
Knight Johnson partner Bryan Knight, who with firm colleague Sherri Buda represents the defendants deemed jointly liable in the new opinion, said he would ask the court to take another look at the case.
“We plan to file a motion for reconsideration with the Court of Appeals and plan to explore all further appeal options,” Knight said via email.
“This case lives and dies by the Epstein Becker & Green contract, which makes no reference to joint and several liability,” Knight said.
Hayden Pace of Stokes Wagner Hunt Maretz & Terrell, who represents co-defendant Anduro Holdings LLC, did not reply to a request for comment.
There was also no reply to queries from Epstein Becker’s appellate counsel, James Parker-Flynn of Carlton Fields in Tallahassee, Florida,or a firm spokeswoman.
The case is rooted in a business dispute between the former chairman of Anduro Holdings, Henry Datelle and two Anduro co-owners. Dattelle also is a trustee of La Famiglia Family Trust, which was established to loan money to and invest in Anduro, the opinion said.
La Famiglia sued Anduro co-owners Michael and Angela O’Connor in a 2010 lawsuit that was removed to the U.S. District Court for the Northern District of Georgia. The O’Connors in turn sued Anduro, Datelle and La Famiglia.
Datelle hired his longtime lawyer Michael Coleman, then a partner at Epstein Becker, to represent him, La Famiglia and Anduro. Anduro has since changed its name to OGD Holdings, and Coleman is now with Thompson Hine.
That case ultimately went to trial, and a jury awarded the O’Connors more than $1.5 million in damages, attorney fees and expenses.
During the course of the litigation, Anduro paid about $400,000 in fees, and Datelle paid about $100,000. Even so, Epstein Becker ultimately withdrew from the case, “because the defendants owed more than $500,000 in fees.”
That’s when the firm sued Anduro, La Famiglia and Datelle.
In 2016 Anduro—under the OGD Holdings moniker—signed a consent judgment, saying it was liable for $522,489 in fees and another $219,531 in prejudgment interest, but the case proceeded to trial against La Famiglia and Datelle.
The jury found all three defendants liable for $522,489 in July 2016.
Shortly thereafter, Epstein Becker & Green sued OGD, Anduro, La Famiglia, Datelle and other defendants in federal court asserting claims for fraudulent transfer of properties Datelle controlled in “an effort to dissipate assets to avoid paying” the judgment.
The complaint said OGD’s consent judgment was worthless.
“OGD agreed to this because it is insolvent, and [Epstein Becker] has no expectation of receiving any monies from OGD,” it said.
OGD, La Famiglia and Datelle never responded to the complaint, and it was voluntarily dismissed without prejudice in 2017
Following the trial in Fulton County State Court, the defendants asked Mather for a judgment notwithstanding the verdict. Mather granted it in July 2017.
“In examining the full record, the court agrees with defendants that a provision for joint and several liability appears nowhere in the written contract and none should be inferred in ‘gray areas,’” Mather wrote.
“The only agreement which addressed responsibility for fees was the oral agreement between Mr. Coleman and Mr. Datelle,” Mather said. “When called at trial, Mr. Coleman testified to his understanding that Anduro Holdings would be responsible for paying all the fees.”
In reversing, McFadden conceded that the joint representation letter “does not contain any provision regarding the payment of legal fees. Yet there is no dispute that the parties intended for Epstein, Becker & Green to be paid for its work.”
At trial, McFadden said, the firm and defendants “presented conflicting evidence on the issue of whether the obligation to pay the legal fees was joint and several or solely Anduro Holdings’.”
The firm’s chief operating officer “testified that in general the party being represented is responsible for paying the bill, and specifically, since Datelle, La Famiglia and Anduro Holdings were all represented, they were all responsible for paying.”
“It made sense to the chief operating officer that Datelle and La Famiglia would pay because they were the owners of Anduro Holdings,” McFadden wrote.
Datelle testified “that he explicitly told Coleman that Anduro Holdings would be responsible for any legal expenses,” but Coleman never relayed that information to the firm’s chief operating officer, the opinion said.
Because the contract did not specifically address the payment of fees, the jury was allowed to consider parol, or unwritten, evidence of the parties’ understanding of the agreement “to prove the missing payment terms,” its aid. “And where there is a conflict in et evidence as to the non-written terms, a jury must resolve the matter.”
“The jury is the final arbiter of the facts, and the verdict must be construed by the trial and appellate courts in the light most favorable to upholding the jury verdict,” wrote McFadden, citing the Court of Appeals’ 1979 ruling in Church’s Fried Chicken v. Lewis, 150 Ga. App. 154.
Knight said the appellate ruling got it wrong.
“It is improper to use parol evidence to add material contractual terms to an unambiguous contract,” said Knight. “We are hopeful the Court of Appeals will consider our motion for reconsideration.”