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Agio Corp. v. Coosawattee River Resort Ass'n, Inc.

Court of Appeals of Georgia

July 15, 2014

AGIO CORPORATION et al.
v.
COOSAWATTEE RIVER RESORT ASSOCIATION, INC. BLANTON et al.
v.
COOSAWATTEE RIVER RESORT ASSOCIATION, INC

Reconsideration denied July 30, 2014.

Discovery. Gilmer Superior Court. Before Judge Bradley.

Edward Hine, Jr., for appellants (case no. A14A0479).

Robinson & Blazer, John E. Robinson, Gregory H. Blazer, Mark A. C. Robinson, for appellants (case no. A14A0480).

Weissman, Nowack, Curry & Wilco, Seth M. Friedman, for appellee.

Barnes, Presiding Judge. Boggs and Branch, JJ., concur.

OPINION

Page 692

Barnes, Presiding Judge.

These companion appeals were filed after the grant of the appellants' applications for interlocutory review of the trial court's denial of a protective order. In Case No. A14A0479, Agio Corporation, DRST Holdings, Ltd., International Christian Alliance, Inc., Merit Financial Group, LLC, Sunbelt Restructure Group, Inc., and Jerry Sewell (collectively, " Agio" ) appeal the denial of their motion for a protective order seeking to prevent an inspection by Coosawattee River Resort Association, Inc., of a shared network computer server. In Case No. A14A0480, C. Terry Blanton and CTB Law Firm, LLC (collectively, " the Blanton Law Firm" ), nonparties to the litigation, also appeal the same order denying the motion for the protective order.[1] We have consolidated the appeals for review, and for the reasons that follow, we reverse the trial court's order permitting the copying of the entire network server.

" Parties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action. ..." OCGA § 9-11-26 (b) (1). OCGA § 9-11-26 (c) authorizes the trial court in which an action is pending, " [u]pon motion by a party or by the person from whom discovery is sought and for good cause shown, ... [to] make any order which justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense." The grant or denial of a motion for protective order generally lies within the sound discretion of the

Page 693

trial court, Bridges v. 20th Century Travel, 149 Ga.App. 837, 839 (256 [328 Ga.App. 643] S.E.2d 102) (1979), and the exercise of that discretion is reviewed on appeal only for an abuse of that discretion. Fulton County Bd. of Assessors v. Saks Fifth Avenue, 248 Ga.App. 836, 842 (547 S.E.2d 620) (2001).

The record demonstrates that Coosawattee sued Agio alleging, among other things, that it participated " in the fraudulent transfers of over four-hundred and sixty (460) lots located within the Coosawattee River Resort ... to hinder, delay or defraud [Coosawattee] from collecting validly assessed homeowners' association assessments." It sought to have the transfers voided, and to obtain a judgment for all assessments, an injunction to prevent future transfers, and punitive damages, attorney fees and costs of litigation. Coosawattee filed a request pursuant to OCGA § 9-11-34 to " inspect the premises as described," including

[a]ll computer systems, back-up tapes and other sources of electronically stored data identified in [Agio's] responses to [Coosawattee's] First Interrogatories to [Agio], including but not limited to the server and work station used by Jerry Sewell (" Electronic Storage" ). [Coosawattee] seeks to inspect these items for electronically stored information which is responsive to all of [Coosawattee's] First and Second Requests for Production of Documents to you, which are incorporated herein by reference. The inspection requested shall be made where the Electronic Storage is located, beginning at 10:00 A.M., on the 31st day following service of this request, and continuing thereafter until completed.

Agio filed a motion for a protective order and objected on the grounds that allowing Coosawattee to inspect the computer server and hard drive would permit access to privileged, confidential, undiscoverable information created by nonparties, including the Blanton Law Firm that shared the office space and common server with its client, appellant Jerry Sewell, and other nonparties. Agio further objected that " in searching for that discrete information [Coosawattee] will also be able to view every piece of electronic data on the server, whether created by [Agio] or a nonparty, whether privileged or nonprivileged, ...


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