In a bombshell ruling, the Georgia Supreme Court recently announced that fault for tort liability may not be apportioned to a non-party where a plaintiff sues only a single defendant. Ramifications for liability insurers could be enormous.
In Alston & Bird, LLP v. Hatcher Mgmt. Holdings, LLC, No. S20G1419, 2021 WL 3501075 (Ga. Aug. 10, 2021), an LLC plaintiff sued Alston & Bird for legal malpractice after one of the LLC’s members embezzled money, while its lawyer failed to properly advise other members on their rights to inspect books and records. At trial, Alston & Bird sought to apportion liability to the non-party embezzler. The jury agreed, finding him 60% at fault. The trial court reduced the plaintiff’s damages by the same 60%, and the plaintiff appealed.
The Court of Appeals reversed the trial court’s order apportioning fault to a non-party and the Supreme Court affirmed. The Supreme Court began by looking to the text of the apportionment statute, O.C.G.A. § 51-12-33, and found that the only provision allowing apportionment to non-parties applies only in cases with multiple defendants:
Where an action is brought against more than one person for injury to person or property, the trier of fact… shall … apportion its award of damages among the persons who are liable according to the percentage of fault of each person….
O.C.G.A. § 51-12-33(b) (emphasis added). The Court acknowledged that “[a]pplying subsection (b) to single-defendant cases may well advance some of the intentions behind the Tort Reform Act better than the statute as we interpret it today.” Alston & Bird, 2021 WL 3501075, at *6. Nevertheless, the Court determined its ruling was necessitated by the language of the statute, and it is that language the Court must “interpret and apply, not some amorphous general intention.” Id.
The Supreme Court’s ruling could have significant consequences for liability insurers. Consider tort cases where multiple parties bear fault but only one is adequately insured. A tort claimant may now elect to sue only the insured party regardless of his or her true share of fault, and the insured defendant will be prohibited from seeking to apportion liability to the other non-party tortfeasors.
For instance, in auto cases, accidents often involve one or more at-fault drivers who are grossly underinsured. Following the Supreme Court’s ruling, plaintiffs’ lawyers will now be incentivized to sue only the most insured defendant. Because defense counsel will be unable to seek to apportion fault to the other at-fault non-parties, auto insurers may feel pressured to settle claims for policy limits even though their insureds are not clearly liable.
If you have questions concerning the Georgia Supreme Court’s ruling on Georgia’s apportionment statute or how it may affect the defense of your insureds, please contact Seslee Smith, Ryan Burke, or a member of the Insurance Group.