Potts v. Clowdis

360 Ga.App. 581

859 S.E.2d 875

POTTS

v.CLOWDIS.

A20A1966

Court of Appeals of Georgia.

June 28, 2021

Reconsideration Denied July 13, 2021

Certiorari Denied January 11, 2022

Eugene D. Butt, Covington, David Alfred Webster, Appellant.

Louis Levenson, Atlanta, Appellee.

Doyle, Presiding Judge.

William G. Clowdis, Jr., sued James Hugh Potts, II, and James Hugh Potts, II, LLC (collectively "Potts"), in DeKalb County Superior Court, asserting a variety of claims, including legal malpractice and breach of fiduciary duty. After the trial court entered a default judgment as to liability and causation as a discovery abuse sanction, the case proceeded to a jury on damages, resulting in a verdict for $2,728,600 in general damages, $2,350,000 for loss of income, $485,000 in attorney fees, and punitive damages in the amount of $235,000. Potts appeals the judgment, the amended judgment, and the trial court's order denying his motions for judgment notwithstanding the verdict ("JNOV") and for new trial, arguing that the trial court erred (1) by granting the default judgment; (2) by failing to properly redact the complaint; (3) by admitting and excluding certain evidence; (4) by denying the motion for JNOV as to attorney fees; and (5) by denying the motion for new trial. For the reasons that follow, we reverse.

When reviewing a trial court's denial of a motion for JNOV or new trial, this Court determines if there is any evidence to support the jury's verdict. [If] a jury returns a verdict and it has the approval of the trial judge, the same must be affirmed on appeal if there is any evidence to support it as the jurors are the sole and exclusive judges of the weight and credit given the evidence. The appellate court must construe the evidence with every inference and presumption in favor of upholding the verdict, and after judgment, the evidence must be construed to uphold the verdict even where the evidence is in conflict. As long as there is some evidence to support the verdict, the denial of defendant's motions for new trial and JNOV will not be disturbed.¹

So viewed, the record shows that in 2007, the Virginia Medical Board ("the Board") suspended Clowdis's license to practice medicine and surgery based upon evidence that he had been convicted of a felony in Colorado. In 2011, the Board stayed Clowdis's suspension on the condition that he fully comply with certain monitoring conditions.

In 2013, following a hearing, the Board issued an order indefinitely suspending Clowdis's license based on violations of the 2011 monitoring order, but it provided for a stay of the suspension if Clowdis complied with the terms of the monitoring order.

Clowdis retained Potts to assist with litigating his medical license suspension and with other issues. At some point, Clowdis began working for Potts as a paralegal, and Clowdis applied for admission to the New York and Georgia Bars. After the relationship between the two soured, Clowdis filed a pro se complaint against Potts, asserting claims for interference with profession (Count 1); fraud (Count 2); breach of contract (Count 3); defamation (Count 4); intentional infliction of emotional distress (Count 5); breach of fiduciary duty/legal malpractice (Count 6); and malicious use and abuse of process (Count 7). The claims largely stem from Potts's alleged handling of Clowdis's legal issues regarding his medical license and misuse of confidential information to negatively impact Clowdis's bar applications.

Potts moved to dismiss Counts 1-5 and Count 7 of Clowdis's complaint for failure to state a claim upon which relief can be granted. The trial court granted the motion for various reasons, leaving only breach of fiduciary duty, "i.e., legal malpractice," remaining for adjudication. Thereafter, Clowdis moved to strike Potts's answer, defenses, and counterclaims on the basis that he intentionally withheld documents requested in discovery, contending that they either did not exist, were destroyed by Clowdis, or were not in his possession. Clowdis further alleged that Potts asked many "irrelevant, harassing, ... bizarre[,] and offensive" questions of witnesses during depositions. The trial court granted the motion, striking Potts's pleadings and awarding default judgment to Clowdis. The court also found that Potts filed a frivolous motion for protective order and was abusive during a deposition, which actions resulted in the imposition of attorney fees. Thus, the court concluded that Clowdis was "entitled to verdict and judgment by default as if every ... paragraph of the [c]omplaint were supported by proper evidence, without the intervention of a jury. Liability is established. The damages, if any, to be awarded, will be heard by a jury...." Potts sought immediate appellate review of the default judgment, but the trial court denied him a certificate of immediate review. Nevertheless, Potts filed a direct appeal of the default judgment, which this Court dismissed for lack of jurisdiction.²

The case proceeded to a bifurcated jury trial on damages.³ Thereafter, the trial court entered judgment against Potts in the following amounts: $2,728,600 in general damages, $2,350,000 for loss of income, $485,000 in attorney fees, and punitive damages in the amount of $235,000. Potts moved for a new trial or JNOV, and the trial court denied the motions. This appeal followed.

1. Potts contends that the trial court erred by granting Clowdis's motion for default judgment. We disagree.

At the outset, we note that rulings on motions to strike and for entry of default judgment are reviewed by this Court using an abuse of discretion standard. Indeed, a trial judge has broad discretion in the enforcement of the discovery provisions of the Civil Practice Act, and we will not interfere with the exercise of that discretion absent clear abuse.... Nevertheless, dismissal and default are the harshest sanctions available for the trial court to impose, and we have cautioned against the use of these harsher sanctions except in extreme cases.⁴

Potts does not dispute the trial court's findings regarding his actions during discovery. Instead, he argues that default is an extreme sanction that cannot be invoked for discovery abuses if the evidence remains intact, citing WellStar Health Systems v. Kemp .⁵ That case held that a trial court abused its discretion by striking the defendant's answer after its attorneys attempted to deter the plaintiff's expert witness from testifying, holding that because the lawyers’ conduct did not result in the spoliation of evidence, striking the answer was not justified.⁶ But this case is not a spoliation case. Instead, the trial court struck Potts's answer pursuant to OCGA § 9-11-37 (d), which authorizes a trial court to "take any action authorized under subparagraphs (b) (2) (A) through (b) (2) (C) of this Code section" if a party fails to respond to discovery.⁷ OCGA § 9-11-37 (b) (2) (C) permits a trial court to strike pleadings as a discovery sanction. And this Court has held "that an intentionally false response to a document production request (particularly concerning a pivotal issue in the litigation) authorizes a trial court to impose the sanctions permitted by OCGA § 9-11-37 (d) for a total failure to respond."⁸

Here, the trial court stated in the order striking Potts's answer:

Defendants’ behavior in this case is the most egregious this [c]ourt has ever seen, and thus, the extreme sanction of entering default judgment for Plaintiff and dismissing Defendants’ counterclaims is appropriate. Defendants f[l]agrantly abused the discovery process. Defendants willfully, falsely, and knowingly denied the existence of requested discoverable documents relating to pivotal issues in this litigation.

Specifically, the court noted that Potts failed to timely respond to discovery; engaged in "game playing"; attempted to "trick the [c]ourt or opposing counsel into thinking that [their] responses were timely"; "willfully misrepresented that [certain] documents were under seal as an explanation for not producing the discoverable documents"; intentionally withheld e-mails between the parties; and "repeatedly misrepresented to Clowdis the existence of [certain] documents for over a year" before attempting to use them to cross-examine Clowdis at his deposition" and finally tendering hundreds of documents to the court after representing that they did not exist.

Under these circumstances, the trial court was authorized to strike Potts's answer as a sanction for his intentionally false responses to discovery, the falsity of which Potts does not dispute.⁹

2. Potts also contends that the trial court erred by "under-redacting" the complaint, including by failing to strike allegations related to claims that were previously dismissed, and then sending it out with

the jury early in the trial after instructing that the contents thereof could not be contested. We agree.

OCGA § 9-11-55 (a) provides in relevant part that when a case is in default, the plaintiff is "entitled to verdict and judgment ... as if every item and paragraph of the complaint or other original pleading were supported by proper evidence."

[A] default operates as an admission of the well-pled facts alleged in the complaint, but not the conclusions of law contained therein: A judgment by default properly entered against parties sui juris operates as an admission by the defendant of the definite and certain allegations and the fair inferences and conclusions of fact to be drawn from the allegations of the declaration. Conclusions of law and facts not well pleaded and forced inferences are not admitted by the default judgment.¹⁰

Prior to trial, Potts filed a motion for the trial court to determine the well-pled factual allegations of the complaint along with the fair inferences and conclusions to be drawn from those allegations to determine which causes of action they supported. After a hearing, the trial court issued an order setting out the elements of a...