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Dunwoody Plaza Partners, LLC v. Markowitz

Court of Appeals of Georgia, Fourth Division

June 21, 2018


          DILLARD, C. J., DOYLE, P. J., and MERCIER, J.


         Dunwoody Plaza Partners, LLC ("the Plaza"), and its attorney, Perry A. Phillips, filed a complaint against Dunwoody Cigars of Atlanta, LLC ("DCA"), and Jay Markowitz, alleging one count of abusive litigation; the complaint also named several other individual defendants[1] against whom the Plaza made allegations of fraudulent transfers and requested disgorgement of wrongfully distributed funds in the amount of $102, 434.31 from the individual defendants, Markowitz, and DCA, as well as punitive damages and attorney fees under OCGA § 9-15-14.[2]

         In response, the individual defendants (aside from Markowitz) filed motions for summary judgment, while Markowitz filed a motion for attorney fees under OCGA § 9-15-14. After a hearing on Markowitz's motion for attorney fees, the trial court granted his motion on the basis that Phillips and the Plaza failed to provide adequate notice to Markowitz under OCGA § 51-7-84 (a) prior to filing the abusive litigation claim, meeting the standard for an award under OCGA § 9-15-14.

         The Plaza and Phillips appeal, arguing that the trial court erred by granting Markowitz's motion for attorney fees under OCGA § 9-15-14 because (1) the letters mailed to DCA's attorneys met the statutory requirements for abusive litigation notices, or there was a question of fact as to whether the abusive litigation notices were proper as to Markowitz; and (2) the fee award was not supported by the evidence. For the reasons that follow, we reverse.


         The record shows that DCA leased a strip-mall property from the Plaza, and in 2015, the two entities became engaged in a dispute over the end date of the lease. DCA filed a declaratory judgment action in superior court against the Plaza. Thereafter, the Plaza filed a dispossessory action against DCA in state court, and DCA answered.

         In January 2015, attorney Robert Sichel sent a letter to the Plaza stating that he represented DCA; this letter included references to Markowitz.[3] In February 2015, Sichel also sent multiple emails to Phillips in which he refers to his "clients" (in plural) in response to whether Markowitz had extended the lease or if the Plaza had committed a breach. In one email, Sichel chastised Phillips for including Markowitz's email on a response, and Sichel threatened Phillips not to communicate to his "clients" again. Robert Mulholland of The Mulholland Law Firm, P. C., ("the Firm") was copied on those emails. In May and June of 2015, Mulholland began communicating with Phillips on behalf of DCA, including an email in which Mulholland admonished Phillips for allowing an employee of the Plaza to contact and allegedly threaten Markowitz; Mullholland warned Phillips from communicating with "my client. That includes any of the Officers."

         On May 22, 2015, while the declaratory judgment action and dispossessory action were pending, the Plaza sent two letters to Mulholland and Thomas J. Lyman, care of the Firm, advising them (1) that both the declaratory judgment case filed by DCA against the Plaza and DCA's defenses filed in the dispossessory action filed by the Plaza constituted abusive litigation under OCGA § 51-7-80 et. seq., (2) that Markowitz as a member or manager of DCA authorized the abusive litigation (specifically the declaratory judgment action), and (3) that if the declaratory judgment action and defenses to the dispossessory action were not dismissed or withdrawn, the Plaza would file abusive litigation claims against "you, your firm, [DCA], its members and managers."

         Lyman deposed that he, Mulholland, Sichel, Markowitz, and the other owners of DCA all met when he, Mulholland, and Sichel were customers of DCA, and he appeared as the attorney for DCA at the dispossessory action hearings. Lyman deposed that he withdrew from representation in the case around July 2015, and the Firm's work in the cases largely was a favor for all of the owners of DCA.

         On June 18, 2015, the Plaza filed a second dispossessory action against DCA for non-payment of rent. Eventually, DCA closed, the dispossessory cases ended in favor of the Plaza, and the Plaza obtained a large award in its favor in the declaratory judgment action, which DCA originally had filed against the Plaza.

         Abusive Litigation Case

         In the present case, James A. Gober and his law firm Arnall, Golden, Gregory LLP, filed an entry of appearance and later an answer and amended answer on behalf of DCA, Markowitz, and the six other named defendants. Although Gober filed motions for summary judgment on behalf of five out of seven individual defendants, [4]Gober filed on behalf of Markowitz only a "Motion to Recover Attorney Fees and Expenses of Litigation" under OCGA 9-15-14, claiming that the Plaza's abusive litigation claim against him was not filed with prior notice to him as required by OCGA § 51-7-84 (a), and therefore, he was due attorney fees and expenses under OCGA § 9-15-14.

         The Plaza filed a consent order dismissing without prejudice its claims against five out of the seven individual parties. Following a hearing, the trial court granted Markowitz's attorney fee motion, holding that the Plaza did not provide Markowitz with the statutorily required abusive-litigation notice, and therefore, the Plaza's abusive-litigation claim against him "lacked substantial justification, " was "groundless, " "plainly foreclosed, " and "unsupported by the facts known to [the Plaza] before filing suit." At the time of the hearing, Gober testified that he billed 270 hours for a total of $134, 810 in fees to defend all of the defendants against all of the claims.[5] After finding that the Plaza and its ...

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