United States District Court, S.D. Georgia, Savannah Division
LLOYD DAN MURRAY, JR. and JENNIFER McGHAN, Individually and on behalf of all others similarly situated, Plaintiffs,
ILG TECHNOLOGIES, LLC, d/b/a ILG INFORMATION TECHNOLOGIES, and BARIS MISMAN, Individually and as Sole Proprietor of ILG INFORMATION TECHNOLOGIES, Defendants.
STAN BAKER UNITED STATES DISTRICT JUDGE.
matter is before the Court on a number of motions including
Defendants' Motion for Summary Judgment, (doc. 10),
Plaintiffs' Motion for Class Certification, (doc. 55);
Defendants' Supplemental Motion for Summary Judgment,
(doc. 65); Plaintiffs' Motion for Partial Summary
Judgment, (doc. 94); and Plaintiffs' Request for Oral
Argument on All Pending Motions, (doc. 101). Plaintiffs Lloyd
Murray, Jr. (“Mr. Murray”) and Jennifer McGhan
(“Ms. McGhan”) filed this putative class action
against Defendants ILG Technologies, LLC (“ILG”)
and Baris Misman (“Mr. Misman”), based on
allegations that a software created by Defendants incorrectly
calculated Plaintiffs' bar exam scores. (Doc. 1-3.)
Plaintiffs originally filed this suit in the Superior Court
of Bryan County, (id.), and Defendants subsequently
removed to this Court, (doc. 1). After Defendants filed their
first Motion for Summary Judgment, (doc. 10), Plaintiffs
filed a Response, (doc. 38), and Defendants filed a Reply.
(Doc. 44.) Plaintiffs subsequently filed an Amended
Complaint, (doc. 63). Defendants filed a Supplemental Motion for
Summary Judgment addressing the additional causes of action,
(doc. 65), to which Plaintiffs responded, (doc. 77), and
Defendants replied, (doc. 79).
case arises out of a cruel twist of events. Plaintiffs were
originally told that they had failed the exam to gain
admission to the State Bar of Georgia only to find out months
later that they had actually passed the exam. Plaintiffs
contend that Defendants are to blame for their agonizing and
costly journey because ILG, a company solely owned by Mr.
Misman, provided a software system to aid in the
administration of the entire bar admission process. ILG
provided this system pursuant to a contract with the Georgia
Office of Bar Admissions. In their initial Complaint,
Plaintiffs levy claims of Breach of Contract, Negligence, and
Negligent Misrepresentation. (Doc. 1-3.) Plaintiffs also
assert a claim for the Regrading of Bar Exams. (Id.
at p. 10.) In their Amended Complaint, Plaintiffs reassert
their original claims (with the exception of their request
for a regrade) and allege additional claims of Defamation,
Negligent Design, and Strict Liability. (Doc. 63.) Factually,
the parties dispute whether the disastrous glitch in grading
Plaintiffs' exams was caused by errors in Defendants'
software or errors elsewhere in the examination, grading, and
communication process. Regardless, in their Motions for
Summary Judgment, Defendants contend that even if their
software factually caused the grading error, Plaintiffs
cannot legally recover the damages they seek through any of
the asserted claims.
Motions call for this Court to resolve the parties'
arguments based on the substantive law of Georgia as set
forth by the Georgia General Assembly and the state's
appellate courts. After a thorough review of that law and its
application to the facts of this case, the Court finds that
it must grant Defendants' Motions. As explained below,
Plaintiffs cannot recover for breach of contract because they
are not in privity of contract with Defendants and are not
third-party beneficiaries of Defendant ILG's contract
with the Office of Bar Admissions. Moreover, Georgia's
economic loss rule bars Plaintiffs' general negligence,
strict liability, and negligent design claims, and the
undisputed evidence thwarts Plaintiffs' claims of
negligent misrepresentation and defamation. The Court is
mindful that this result may seem like another hapless turn
in Plaintiffs' harrowing saga. However, this Court's
obligation is to say what the law is, not what it should be.
Having fulfilled that responsibility and applied that law to
the facts of this case, the Court GRANTS
Defendants' Motions for Summary Judgment, (docs. 10, 65)
and DENIES as moot all other pending motions
in this case.
incidents giving rise to this action came to light on
September 6, 2016. (Doc. 10-2, p. 1.) On that day, the
Georgia Board of Bar Examiners announced that ninety people
who took the July 2015 and February 2016 Georgia bar
exams-forty-five from each exam-were incorrectly assigned
failing scores. (Id.) In fact, these ninety
individuals had passed their respective exams. (Id.)
Plaintiffs Murray and McGhan were two such persons. (Doc.
1-3, p. 2.) Plaintiffs filed this putative class action
against Defendants on behalf of all ninety test takers.
(Id. at pp. 3, 6.)
The Bar Admission Process and Exam Scoring
person who wishes to practice law in the state of Georgia
must first be admitted pursuant to the Rules promulgated by
the Supreme Court of Georgia. (Doc. 10-3, p. 5.) This process
is handled by two boards-the Board to Determine Character and
Fitness, and the Board of Bar Examiners. (Doc. 38, p. 3.) The
Office of Bar Admissions (“OBA”) provides
administrative support to both Boards. (Id.) Prior
to sitting for the Georgia Bar Exam, applicants'
credentials are reviewed by the Board to Determine Character
and Fitness. (Doc. 37-12, p. 9.) Applicants who pass this
stage are then permitted to take the bar exam. (Id.)
exam itself is a two-day test that is written and
administered by the Board of Bar Examiners. (Doc. 38, p. 3.)
The exam consists of a multiple-choice component known as the
“MBE” and two separate writing components-two
essays collectively called the “MPT” and four
Georgia-specific essays. (Id.) After the exam, the
completed MBE answer sheets are sent to the National
Conference of Bar Examiners to be graded by a machine. (Doc.
37-12, p. 33.) The scores are sent to the OBA, and any
individual who does not score at least a 115 on the MBE
portion of the exam is deemed an “automatic fail,
” meaning the applicant's essays are not submitted
for grading. (Doc. 38, p. 7.) The essays that are submitted
for grading are then graded by the Board of Bar Examiners,
and the completed scores are entered into a database.
(Id. at p. 5.) A score of 270 or higher qualifies as
a “passing score.” (Id.) Before the
scores are finalized, the essays of individuals who received
an initial score within five points below 270-or 265 to
269-are regraded. (Id.) Once the regrades are
complete, the new scores are entered into the database.
(Id.) Applicants are then notified of the results
electronically. (Doc. 10-2, p. 4.)
The Software Program and Underlying Contract
ILG is a technology company that creates custom software, and
Mr. Misman is ILG's sole proprietor. (Doc. 37-9, p. 16;
doc. 38, p. 3.) At all times relevant to this action,
Defendants had a contract with the OBA to create and provide
a computer program that would facilitate the entire bar
admission process (hereinafter “the Contract”).
(Doc. 38, p. 3; doc. 38-1.) It is undisputed that Plaintiffs
were not parties to the contract between Defendants and the
OBA. (Doc. 10-1, p. 2; doc. 38-6, p. 2.) The Contract states
that Defendants “promise[d] to provide, and OBA
promise[d] to pay for, a complete, customized, turn-key
system of enterprise for digitizing and electronically
administering the entire bar admission process.” (Doc.
38-1, p. 3.) The system was intended to be a
“user-friendly” way for the OBA to organize
“the data that is received from the fitness application
and the data that's received from the  bar examination
process.” (Doc. 38, p. 3.) It was also intended to
efficiently and effectively communicate the relevant data to
bar applicants. (Id.)
software designed by Defendants was used by the OBA and the
Boards to calculate the scores and communicate the results of
the July 2015 and February 2016 bar exams. (Doc. 10-1, pp.
2-3; doc. 38-6, pp. 2-3.) All communications through the
software came from the OBA and the Board of Bar Examiners;
Plaintiffs were never contacted by Defendants. (Doc. 38-6, p.
Overview of Claims
lawsuit, Plaintiffs request relief for: (1) the cost of
taking additional bar exams; (2) the cost of additional study
materials; (3) loss of income; (4) injury to their property
right in the employment of the legal profession; and (5)
injury to their reputations. (Doc. 63, pp. 8-9.) To seek
these damages, Plaintiffs assert six theories of liability.
First, Plaintiffs allege that Defendants committed acts of
negligence by “failing to accurately calculate, record,
and/or report Plaintiffs' and the class members', Bar
Exam Grades.” (Id. at p. 8.) Plaintiffs also
argue that Defendants breached their contract with the OBA,
and that Plaintiffs were third-party beneficiaries to that
contract. (Id. at pp. 11-12.) Further, Plaintiffs
claim that because they relied on the incorrect results to
their detriment, Defendants are liable to them for negligent
misrepresentation. (Id. at p. 10.) Plaintiffs also
allege Defendants breached their duties to exercise
reasonable care in designing a software free of unreasonable
risks and to provide a merchantable product, meaning
Plaintiffs are entitled to damages in strict products
liability and for negligent design. (Id. at pp.
12-13.) Additionally, Plaintiffs argue that the
software's incorrect results constitute false
publications and that Defendants are thus liable for
defamation. (Id. at 13.)
initially requested a regrade of July 2015 and February 2016
bar exams scoring between 259 and 264. (Id.)
However, Plaintiffs “withdrew” this claim in
their Response to Defendants' Motion for Summary
Judgment, (doc. 38, p. 26), and indicate the claim as
“withdrawn” in their Amended Complaint, (doc. 63,
p. 10). Finally, Plaintiffs seek attorney's fees due to
Defendants' alleged bad faith, stubborn litigiousness,
and having caused Plaintiffs unnecessary trouble and expense.
(Id.) In their Motions, Defendants seek summary
judgment on all of Plaintiffs' claims asserted in
Plaintiffs' initial and Amended Complaints. (Docs. 10-2,
judgment “shall” be granted if “the movant
shows that there is no genuine dispute as to any material
fact and that the movant is entitled to judgment as a matter
of law.” Fed.R.Civ.P. 56(a). A fact is
“material” if it “might affect the outcome
of the suit under the governing law.” FindWhat
Inv'r Grp. v. FindWhat.com, 658 F.3d 1282, 1307
(11th Cir. 2011) (quoting Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986)). A dispute is
“genuine” if the “evidence is such that a
reasonable jury could return a verdict for the nonmoving
moving party bears the burden of establishing that there is
no genuine dispute as to any material fact and that it is
entitled to judgment as a matter of law. See Williamson
Oil Co. v. Philip Morris USA, 346 F.3d 1287, 1298 (11th
Cir. 2003). Specifically, the moving party must identify the
portions of the record which establish that there are no
“genuine dispute[s] as to any material fact and the
movant is entitled to judgment as a matter of law.”
Moton v. Cowart, 631 F.3d 1337, 1341 (11th Cir.
2011). When the nonmoving parties would have the burden of
proof at trial, the moving party may discharge its burden by
showing that the record lacks evidence to support the
nonmoving parties' case or that the nonmoving parties
would be unable to prove their case at trial. See
id. (citing Celotex Corp. v. Catrett, 477 U.S.
317, 322-23 (1986)). If the moving party discharges this
burden, the burden shifts to the nonmovants to go beyond the
pleadings and present affirmative evidence to show that a
genuine issue of fact does exist. Anderson, 477 U.S.
determining whether a summary judgment motion should be
granted, a court must view the record and all reasonable
inferences that can be drawn from the record in a light most
favorable to the nonmoving parties. Peek-A-Boo Lounge of
Bradenton, Inc. v. Manatee County, 630 F.3d 1346, 1353
(11th Cir. 2011) (citing Rodriguez v. Sec'y for
Dep't of Corr., 508 F.3d 611, 616 (11th Cir. 2007)).
However, “facts must be viewed in the light most
favorable to the non-moving parties only if there is a
‘genuine' dispute as to those facts.”
Scott v. Harris, 550 U.S. 372, 380 (2007).
“[T]he mere existence of some alleged factual dispute
between the parties will not defeat an otherwise properly
supported motion for summary judgment; the requirement is
that there be no genuine issue of material fact.”
Id. (citation and emphasis omitted).
Choice of Law
diversity action, the Court must apply the choice-of-law
rules of its forum state of Georgia to determine which
state's substantive laws apply. Boardman Petroleum,
Inc. v. Federated Mut. Ins. Co., 135 F.3d 750, 752 (11th
Cir.1998). The claims discussed in this Order resound in
contract and tort. The at-issue contract between the OBA and
Defendants contains a choice of law provision, wherein the
parties agreed that the contract “will be governed by
and construed solely in accordance with the law of the State
of Georgia.” (Doc. 38-1, p. 23.) Georgia courts
generally enforce choice-of-law provisions unless the
application would contravene public policy. See Becham v.
Synthes USA, 482 Fed.Appx. 387, 390-91 (11th Cir. 2012)
(per curiam). The parties have not provided any reason for
the Court not to follow the Contract's choice of law
provision in this case. Accordingly, Plaintiffs' breach
of contract claim will be analyzed under Georgia law. See
Interface Kanner, LLC v. JPMorgan Chase Bank, N.A., 704
F.3d 927, 932 (11th Cir. 2013) (“The parties have not
offered any reason why the choice-of-law provision above
contravenes strong public policy, and the court is aware of
no such reason. Accordingly, [the law of the forum designated
in the choice of law provision] applies in determining
whether [the plaintiff] is an intended third-party
beneficiary to [the contract].”)
Plaintiff's tort claims, in tort actions, “Georgia
continues to apply the traditional choice of law principles
of lex loci delicti.” Willingham v. Glob.
Payments, Inc., No. 1:12-CV-01157-RWS, 2013 WL 440702,
at *14 (N.D.Ga. Feb. 5, 2013). “The rule of lex
loci delicti  requires application of the substantive
law of the place where the tort of the wrong occurred.”
Carroll Fulmer Logistics Corp. v. Hines, 710 S.E.2d
888, 889 (Ga.Ct.App. 2011). The parties do not dispute that
the events giving rise to this action took place in the state
of Georgia. Thus, Plaintiffs' claims for negligence,
negligent misrepresentation, negligent design, product
defect, and defamation are governed by Georgia
Defendants are Entitled to Summary Judgment on Claims of
Breach of Contract
assert a breach of contract claim against Defendants, arguing
that “Plaintiffs and those similarly situated were
intended beneficiaries of the contract” between the OBA
and Defendants (“the Contract”). (Doc. 63, p.
11.) In their original Motion for Summary Judgment,
Defendants argue that, because Plaintiffs are not parties to
the Contract, they cannot recover. (Doc. 10-2, p. 19.)
Defendants also allege that Plaintiffs failed “as a
matter of law to establish that they are third-party
Georgia contract law, “[t]he doctrine of privity of
contract requires that only parties to a contract may bring
suit to enforce it. Wirth v. Cach, LLC, 685 S.E.2d
433, 434 (Ga.Ct.App. 2009). Here, it is undisputed that
Plaintiffs are not parties to the Contract and, thus, are not
in contractual privity with Defendants. (Doc. 38-6, p. 2.)
“As a general rule, one not in privity of contract with
another lacks standing to assert any claims arising from
violations of the contract.” Dominic v. Eurocar
Classics, 714 S.E.2d 388, 391 (Ga.Ct.App. 2011);
see O.C.G.A. § 9-2-20(a). However, an exception
to this rule is codified in O.C.G.A. § 9-2-20(b), which
provides that “[t]he beneficiary of a contract made
between other parties for his benefit may maintain an action
against the promisor on the contract.” Such a person,
known as a third-party beneficiary, has standing to enforce a
contract where “the promisor engages to the promisee to
render some performance to a third person.”
Dominic, 714 S.E.2d at 391 (citations omitted).
decide whether a contract was intended to benefit a third
party, courts must look at the contract itself. Where the
parties do not dispute which writing constitutes the
operative contract and the terms of the contract are not
ambiguous, the determination of third-party beneficiary
status is a question of law. See id. at 391
(treating question of third-party beneficiary status as
question of law where contractual language was not in
dispute); Kaesemeyer v. Angiogenix, Inc., 629 S.E.2d
22, 24 (Ga.Ct.App. 2006) (“Construction of a written
contract is a question of law for the trial court based on
the intent of the parties as set forth in the
contract.”); cf. Encompass Indem. Co. v. Ascend
Techs., Inc., No. 1:13-CV-02668-SCJ, 2015 WL 10582168,
at *6 (N.D.Ga. Sept. 29, 2015) (finding fact dispute as to
third party beneficiary status due to factual dispute as to
whether contract existed); Arvida/JMB Partners, L.P.-II
v. Hadaway, 489 S.E.2d 125, 128 (Ga.Ct.App. 1997) (trial
court did not err in submitting ambiguous contract to jury
where rules of construction failed to decipher meaning). In
such a case, a court is not permitted to use parol evidence
to interpret the terms of the contract. O.C.G.A. §
13-2-2(1) (parol evidence used to explain latent or patent
ambiguities in a contract); see generally Fluid Equip.
Int'l Ltd. v. Reddy-Buffaloes Pump, Inc., No.
2:16-CV-150, 2017 WL 4404247, at *4 (S.D. Ga. Sept. 29, 2017)
(“[T]he court is generally permitted to use parol
evidence to resolve ambiguities in contracts.”).
However, even where parol evidence is permissible,
“[p]arol evidence cannot confer third-party beneficiary
status where the contract itself fails to do so . . .
.” CDP Event Servs., Inc. v. Atcheson, 656
S.E.2d 537, 540 (Ga.Ct.App. 2008) (citation omitted)). Here,
there is no question as to the relevant contract and neither
party argues that the Contract's language is ambiguous.
Thus, the Court will look only to the Contract itself to
determine whether Plaintiffs are third-party beneficiaries to
the Contract between Defendants and the OBA.
party's status as a third-party beneficiary depends upon
the intention of the contracting parties to benefit the third
party, and this intention is determined by a construction of
the contract as a whole.” Am. Fletcher Mortg. Co.
v. First Am. Inv. Corp., 463 F.Supp. 186, 195 (N.D.Ga.
1978). Additionally, the parties' intent must be
identifiable on the face of the contract. Atcheson,
656 S.E.2d at 539. “[I]t must clearly appear from the
contract that it was intended for [another's]
benefit.” Boller v. Robert W. Woodruff Arts Ctr.,
Inc., 716 S.E.2d 713, 717 (2011) (citations omitted).
Importantly, “a third party is entitled to enforce only
those specific provisions of a contract of which he is an
intended beneficiary.” Archer W. Contractors, Ltd.
v. Estate of Pitts, 735 S.E.2d 772, 779 (Ga. 2012);
see also City of Atlanta v. Atl. Realty Co., 421
S.E.2d 113, 118 (Ga.Ct.App. 1992) (“In appearing that
Atlantic is an intended third party beneficiary to that
paragraph 16 of the construction contract, Atlantic has the
requisite standing to sue Banks, the promisor of that
provision, for any breach of that
provision, pursuant to OCGA § 9-2-20(b).”
argue that the Contract does not contain language indicating
that Plaintiffs have standing to enforce it. Specifically,
Defendants note that the Contract does not “identify
Plaintiffs or other bar applicants as intended beneficiaries,
” “promise specific benefits [or] offer
[Plaintiffs] any warranties, ” and “does not
expressly state that bar applicants can sue
Defendants.” (Doc. 10-2, p. 20.) In response,
Plaintiffs rely on Section 1.1 of the Contract, which states
in relevant part,
ILG promises to provide, and OBA promises to pay for, a
complete, customized, turn-key system of enterprise software
for digitizing and electronically administering the entire
bar admission progress (hereinafter the
“Solution”). The Solution will
include a . . . system for OBA's correspondence with
applicants . . . .
The Solution will come with complete instructions
and will provide for receiving and processing the
[applications] and for conducting all related activities of
OBA and the Bar admission process. Toward this end, ILG will
provide to OBA, tailor to OBA's particular activities,
license, install, populate with existing data, and support
and maintain [the software] . . . .
(Doc. 38, p. 24; doc. 38-1, pp. 3-4.) The parties disagree on
how this section should be interpreted. According to
Plaintiffs, “[t]he whole purpose of the contract, as
stated on the contract's first page [in Section 1.1], was
to benefit the Plaintiffs[.]” (Doc. 38, p. 25.)
Plaintiffs claim Section 1.1's use of the word
“applicants” demonstrates that “[t]he
cornerstone of the contract was to communicate with bar
applicants regarding whether the applicants were admitted to
the practice of law.” (Id.)
record before the Court demonstrates that, as a matter of
law, Plaintiffs are not third-party beneficiaries of the
contract between Defendants and the OBA for purposes of
this action. As noted above, “a third party is
entitled to enforce only those specific provisions of a
contract of which he is an intended beneficiary.”
Archer, 735 S.E.2d at 779. Looking to the language
in Section 1.1-the provision used to support Plaintiffs'
claim-it does not “clearly appear from the contract
itself that both contracting parties intended to benefit
[Plaintiffs.]” Kaiser Aluminum & Chemical Corp.
v. Ingersoll-Rand Co., 519 F.Supp. 60, 72 (S.D. Ga.
1981). In fact, Section 1.1 unambiguously provides that ILG
was to: (1) create software for the OBA; (2) tailor it to the
OBA's particular needs; (3) so the OBA could carry out
its duties of facilitating admission to the Georgia bar.
(Doc. 38-1, pp. 3-4.) Contrary to Plaintiffs'
interpretation, the mention of “applicants” in
this section is in the course of describing how the software
created by ILG will assist the OBA in their
communication with bar applicants-a necessary aspect of the
OBA's admission process. See, e.g., Kaiser, 519
F.Supp. at 72 (“The fact that a third party is
mentioned in [a] contract does not necessarily indicate that
a third party beneficiary situation is created.”).
Because the contracting parties, Defendants and the OBA, did
not intend for Plaintiffs to be beneficiaries of the
contractual provisions Plaintiffs allege Defendants breached,
Plaintiffs cannot sue to enforce those provisions as
comparison, other provisions in the Contract could render
Plaintiffs third-party beneficiaries as to those
provisions. “Georgia law is clear that there must
be ‘a promise by the promisor to the promisee to render
some performance to [the] third person[.]'”
AT&T Mobility, LLC v. Nat'l Ass'n for Stock
Car Auto Racing, Inc., 494 F.3d 1356, 1361 (11th Cir.
2007). Thus, for Plaintiffs to be deemed third-party
beneficiaries, there would need to be an agreement between
the promisor-Defendants-and the promisee-the OBA-that
Defendants would do something for Plaintiffs. The Contract
has several provisions in which Defendants promised to
provide support and make certain features available to
applicants. Specifically, Defendants promised to: (1) make an
electronic communication portal for use by bar applicants,
(doc. 38-1, p. 4); (2) provide support to bar applicants who
sought to use Defendants' software or encountered
difficulty, (id. at pp. 9, 11); and (3) maintain the
confidentiality of all information regarding individual bar
applicants, (id. at p. 16). While Plaintiffs may
have been intended beneficiaries of these contractual
provisions, they are not intended to be beneficiaries of the
provisions that they claim Defendants breached. As discussed
above, the contractual provision that Plaintiffs are
attempting to enforce provides that Defendants promised the
OBA to create a ...