Georgia Supreme Court Rules Statutes Allow for Double Recovery of Attorney’s Fees
By: Sarah Daley
On March 8, 2022, the Georgia Supreme Court issued a ruling in Junior v. Graham, which involved the reconciliation of two Georgia statutes – O.C.G.A. §§ 13-6-11 and 9-11-68(b)(2). Both statutes provide authority for a court to award plaintiffs attorney’s fees and litigation expenses based on specific conduct by defendants. Focusing heavily on the text of the statutes and the Georgia General Assembly’s ability to “say what they mean,” the court found that a recovery of fees and expenses could be made under both statutes, with neither limiting the award under the other.
Section 13-6-11 allows for a court to award fees and costs where defendants are shown to have acted in bad faith or where defendants have either been stubbornly litigious or caused plaintiffs unnecessary trouble and expense. Section 9-11-68(b)(2), on the other hand, allows for an award of attorney’s fees and litigation expenses that a plaintiff incurs after the defendant has turned down a reasonable statutory settlement offer, but only where the offer was made in good faith and plaintiff is awarded a final judgment in an amount greater than the 125% of the offer made pursuant to the statute.
In Junior, both the trial court and the Georgia Court of Appeals held that a plaintiff could not recover attorney’s fees and litigation expenses under both statutes, albeit for different reasons. The trial court held that allowing recovery under both statutes was an impermissible double recovery and found that an award for fees and expenses under O.C.G.A. § 13-6-11 precluded any similar award under O.C.G.A. § 9-11-68(b)(2). Although the Court of Appeals affirmed, it held that O.C.G.A. § 9-11-68(b)(2) applied only to fees and expenses “incurred,” and found that, where those fees and expenses were already recovered under O.C.G.A. § 13-6-11, they would not have been “incurred.” The Georgia Supreme Court found both lower courts’ rationales uncompelling and held that neither statute precluded or limited recovery under the other.
The Supreme Court paid particular attention to the text of the statutes, noting that, while general public policy may disfavor double recovery of compensatory damages, nothing prevented the Georgia General Assembly from overruling this policy consideration by statute. The Supreme Court held that while both statutes might use attorney’s fees and litigation expenses as a measure of the award, the statutes were intended to remedy different conduct.
Specifically, the court pointed out that only O.C.G.A. § 13-6-11 allows for an award of attorney’s fees and litigation expenses as part of actual damages in the underlying suit. In contrast, O.C.G.A. § 9-11-68(b)(2) provides for such an award as a sanction in order to encourage good faith cooperation in settlement discussions. Additionally, while the award is permitted under O.C.G.A. § 13-6-11, it is mandatory under O.C.G.A. § 9-11-68.
The Supreme Court rejected the trial court’s denial based on double recovery. Under its reasoning, double recovery can be allowed for by statute. Here, the court stated that the General Assembly could have placed language in either statute which would limit recovery under one where there was recovery under another. In fact, the General Assembly actually put this type of language in a similar statute dealing with frivolous litigation, stating that “[a] party may elect to pursue either the procedure specified in this subsection or the procedure specified in [O.C.G.A. § 9-15-14], but not both.” O.C.G.A. § 9-11-68(e)(3). The Supreme Court also rejected the Court of Appeals’ argument that fees and expenses could not be “incurred” if they were already satisfied with a previous award. The Court reasoned that the plaintiffs still incurred the fees and expenses even if they had already been compensated.
Ultimately, all the justices participating in the decision concurred, holding that nothing in the statutory scheme enacted by the General Assembly precluded or limited recovery of attorney’s fees and litigation expenses under both O.C.G.A. §§ 13-6-11 and 9-11-68(b)(2). Going forward, defendants could be hit with duplicative awards for fees and expenses if they are found liable under both statutes.
Although the statutes may have been intended to remedy different conduct, the Supreme Court’s ruling seemingly creates the danger that the same conduct could cause a defendant to be liable under both statutes. For example, if a defendant were to reject a reasonable settlement offer based on its own good faith belief there was no liability, and the court or jury finds no viable argument against liability, it could potentially be forced to pay a double award of attorney’s fees and expenses. The end result of the decision in Junior v. Graham will be to put additional pressure on defendants to effectively analyze the strength of their defenses before raising them and accurately evaluate their exposure when faced with a statutory demand.
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