Samsung Elecs. Am. v. Brewer

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SAMSUNG ELECTRONICS AMERICA, INC. v. BREWER;

BREWER; v. SAMSUNG ELECTRONICS AMERICA, INC.

Nos. A23A0452, A23A0453

Court of Appeals of Georgia, First Division

June 30, 2023

BARNES, P. J., DILLARD, P. J., and SENIOR APPELLATE JUDGE PHIPPS

BARNES, PRESIDING JUDGE.

These companion appeals arise from the grant of a default judgment against Samsung Electronics America, Inc. in a products liability action filed by Jordan Brewer after he was injured when the battery in his e-cigarette exploded in his pocket. In Case No. A23A0452, Samsung challenges the trial court's denial of its motion to open default judgment.^[1] In his cross-appeal, Case No. A23A0453 Brewer asserts that the trial court erred in granting Samsung's motion to set aside the judgment. Upon review, we vacate the trial court's judgment in granting Samsung's motion to set aside the judgment in Case No A23A0453, and dismiss as premature the judgment denying Samsung's motion to open default judgment in Case No. A23A0452.

The record reflects that on July 15, 2020, Brewer filed the subject lawsuit against Samsung and other defendants.^[2] Brewer alleged that he was injured when the battery to an e-cigarette or "vape" pen caught fire or exploded in his pocket, and that Samsung was involved in designing, manufacturing, distributing, and selling the battery. Brewer asserted negligence and products liability causes of action against Samsung based on its alleged negligent design and manufacturing of the battery and negligent failure to warn of the risks and harms associated with the battery. Brewer's damages claims included a claim for punitive damages.

On July 20, 2020, Samsung was served with a copy of the complaint, summons, and discovery requests, including requests for admission. The summons stated that

[y]ou are hereby summoned and required to file with the Clerk of said court and serve upon the Plaintiff's attorney . . . an answer to the Complaint which is herewith served upon you, within 30 days after service of this summons upon you, exclusive of the day of service. If you fail to do so, judgment by default will be taken against you for the relief demanded in the complaint.

The discovery requests indicated that responses thereto were due within 45 days. Samsung's legal department received a copy of the complaint on the day it was served.

Samsung failed to file an answer or responsive pleading to the lawsuit within 30 days of the date of service, i.e., August 19, 2020, which placed it in default by operation of law. See OCGA §§ 9-11-12 (a) ("A defendant shall serve his answer within 30 days after the service of the summons and complaint upon him, unless otherwise provided by statute...."); 9-11-55 (a).^[3] Samsung still had not filed an answer or responsive pleading within 45 days of the date of service, i.e., September 3, 2020, which meant it could no longer open the default as a matter of right. See OCGA § 9-11-55 (a). On September 10, 2020, Brewer filed a motion for default judgment against Samsung and to drop the remaining defendants from the lawsuit.^[4]On September 16, 2020, the trial court issued an order declaring Samsung in default on the issue of liability and scheduled a damages hearing for October 9, 2020.^[5]According to the court, Samsung's registered agent was served with a copy of the default judgment, and the Clerk had followed the usual practice of issuing a notice of the damages hearing to Samsung. Following the damages hearing, on October 12, 2020, judgment was entered in favor of Brewer and against Samsung in the amount of $10,860,972 as "general and special damages, past and future." The trial court's order reflected that in determining the amount of damages

the Court on October 9, 2020 listened and heard the testimony of live witnesses regarding past and future damages and reviewed copious amounts of evidence presented including photographs of the injuries at issue and medical records and bills associated with [Brewer's] injuries; [and found] after hearing the testimony and reviewing the evidence that [Brewer's] injuries and condition are permanent in nature and that [Brewer] has a remaining life expectancy of approximately fifty-five (55) years according to the statutory annuity and mortality table[.]

On December 4, 2020, during the same term of court,^[6] Samsung filed a motion to set aside the default judgment, or in the alternative, motion for new trial.^[7] Relying on the trial court's authority to set aside its judgment within the same term of court in which it was entered, Samsung argued that there were "meritorious grounds" to set aside the default judgment, including that it was the wrong party; the court lacked personal jurisdiction over Samsung because the sole resident defendant had been dismissed from the case; the judgment resulted from fraud and/or mistake; Samsung had not received notice of the damages hearing; OCGA § 9-11-5 (a), which addresses waiver of notice for failure of a party to file pleadings, was unconstitutional; and the damages awarded on the default judgment were grossly excessive and violated the Eighth and Fourteenth Amendments.

By the time of the pending motion to set aside the judgment, the initial trial court judge who entered the default judgment had assumed senior judge status, and a new trial court judge had been assigned to the case. Following a hearing on the motion, on January 7, 2022, the newly assigned judge granted Samsung's motion to set aside, the judgment awarding "damages in excess of $10 million," concluding that the significant award of damages should be reconsidered due to the limited evidence in the record, the discrepancy between the special damages and the overall award, and the judgment's failure to break down the types of damages awarded. The trial court further acknowledged that Samsung had abandoned any arguments related to OCGA § 9-11-60 and had instead argued that the trial court should exercise its plenary power to set aside a judgment entered within the same term of court.^[8] The trial court emphasized that "this is not a holding in favor of Samsung's argument that the damages award is so grossly excessive that it violates the Eighth Amendment or Due Process Clause of the Fourteenth Amendment."

Subsequent to the grant of Samsung's motion to set aside the default judgment, on January 24, 2022, Samsung filed a motion to open the default pursuant to OCGA § 9-11-55 (b).^[9] Following a hearing, the trial court denied the motion, concluding that Samsung had met and satisfied the preconditions for opening the default by making a showing under oath, offering to plead instanter, announcing ready to proceed to trial, presenting a meritorious defense under oath (that it was not the party responsible for the manufacture or distribution of the battery), and paying the court costs to the clerk of court. The court further concluded, however, that Samsung had failed to establish that this was a proper case to open default judgment, specifically rejecting the company's argument that "it is not a proper party to [the] lawsuit and that manifest injustice would result if it were not permitted to open the default and present this argument."^[10] Characterizing Samsung's action in pursuing its company protocol in response to similar lawsuits as "a failed legal strategy" that was "willful and deliberate and done with indifference to the correct legal process or else was gross negligence,"^[11] the trial court chronicled Samsung's response from the time it was served on July 22, 2020 until December 4, 2020, when "Samsung finally filed its motion to set aside the judgment."^[12] The trial court recounted that Samsung had failed at every step to follow its own procedure in this case. It did not follow up with Brewer's attorney, did not timely send the promised documentation to support its assertion that it was not the responsible party until after the judgment was entered, and did not obtain a voluntary dismissal. The trial court summarized that "in a case where a party's legal department is fully aware of the existence of a lawsuit and wilfully and continually ignores the associated legal responsibilities that accompany being sued for extended periods of time, there is no proper case to open default."

Turning to the issues on appeal, which include both the denial of Samsung's motion to open the default, and the grant of Samsung's motion to set aside the default judgment, this Court has indicated that, "the first and essential step against any final judgment, including a default judgment, is a motion to set aside the judgment under OCGA § 9-11-60 (d)." The Pantry, Inc. v. Harris, 271 Ga.App. 346, 347 (2) (609 S.E.2d 692) (2005). See also Bank of Cumming v. Moseley, 243 Ga. 858 (257 S.E.2d 278) (1979) (noting that once a default judgment is set aside, the case returns to the posture it occupied prior to the entry of the default judgment); Granite Loan Solutions, LLC v. King, 334 Ga.App. 305, 310 (3) (c) (779 S.E.2d 86) (2015) (explaining that where the trial court had entered a final judgment, it could not open the default without first setting aside the final judgment, which it had declined to do). Thus, we must first consider whether the trial court erred in granting Samsung's motion to set aside the default judgment.

Case No. A23A0453

In setting aside the judgment, the trial court concluded that,

[i]n consideration of [the] evidence, and given the extreme breadth of the discretion afforded to this Court to determine what is a meritorious reason to set aside a judgment and whether to do so, the Court ultimately agrees with Samsung that reconsideration of the damages award is a sufficiently meritorious reason to set aside the judgment here and analyze whether the amount of

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