The Eleventh Circuit Court of Appeals has asked the Georgia Supreme Court to weigh in on the state's apportionment statute as it applies to money damages against joint defendants acting “in concert,” and whether it applies to the directors of a failed bank hit with a nearly $5 million verdict tied to failed loans.

The questions were raised by an appeal filed by the former directors of the failed Buckhead Community Bank, which was closed by state regulators in 2009 and taken over by the Federal Deposit Insurance Corp.

The FDIC sued eight former directors and officers, including Buckhead Bank's founder and board chairman Charlie Loudermilk Sr., for claims including negligence and gross negligence for their roles in approving 10 commercial real estate loans that defaulted, costing the bank more than $21 million.

The directors asked Judge Thomas Thrash Jr. to apportion any damages between them under Georgia statute as the case prepared to go to trial in the state's Northern District.

A 2005 law did away with joint and several liability in cases “brought against one or more person for injury to person or property,” and Thrash ruled the bank directors acted “in concert” and that the law did not apply to such actions.

At trial, the jury found the directors negligent in approving four of the 10 loans at issue and awarded just shy of $5 million in damages.

According to the certification authored by Circuit Judges Gerald Tjoflat, Beverly Martin and R. Lanier Anderson, the directors argued that Thrash should have allowed the damages to be apportioned, because “injury to person or property” includes economic property, and cited three Georgia Court of Appeals cases in which apportionment was ordered in cases involving business and economic torts.

“Although the meaning of 'injury to person or property' was not at issue in any of these cases,” the judges wrote, “the directors cite them for the proposition that the Georgia Court of Appeals treated as 'obvious' that the apportionment statute applies in tort cases involving purely pecuniary losses.”

The FDIC argued that “Georgia law has long recognized a distinction between economic-loss claims and claims typically categorized as injuries 'to person or property.'”

The FDIC's strongest argument, the judges wrote, was a citation to a 2011 Court of Appeals ruling declaring that a lawsuit over the city of Atlanta's overbilling on utility bills did not involve injuries “to person or property” under the state's ante litem notice statute.

“In addition,” it said, “the Court of Appeals went on to hold that the claim was not an 'injury to person or property' under the apportionment statute, either.”

The FDIC also argued that Georgia's common law rule calls for joint and several liability for defendants who act in concert and that allowing apportionment in cases alleging concerted action would effectively “destroy” the concerted action doctrine.

The directors countered that they did not act in concert and were each responsible for their own decisions, including those disagreeing with the board's.

The dispute, the panel said, presents “two interdependent questions: first, whether Georgia's rule imposing joint and several liability on tortfeasors acting in concert survives; and second, if so, whether a decision of a bank's board members qualifies as such a concerted action when the claim against those directors is premised on each director's negligence in his decisional processes leading up to the board's actions.”

“Because no Georgia Supreme Court decision has yet addressed these consequential state-law questions, we respectfully ask the court to answer them,” it said.

The appellate panel's query marks the second time the justices have been asked to rule on previously unsettled law in the case. In 2014, Thrash asked the high court to decide whether Georgia's “business-judgment rule,”which protects corporate officers from liability by assuming they will act in good faith for business decisions unless they can proven to have acted negligently, shielded the defendants for ordinary negligence claims.

The justices said it did not and the case proceeded.

Last year, in response to the concerns raised about that ruling by the banking community and Georgia Chamber of Commerce, legislation was passed to raise the negligence standard so that only gross negligence falls outside the rule's protection.

The defendants' appellate counsel includes Theodore Sawicki, Robert Long, Brian Boone, Elizabeth Clark and Lauren Tapson, all of Alston & Bird, who declined to comment.

Weinberg, Wheeler, Hudgins Gunn & Dial partner E. “Billy” Gunn and associate Anna Idelevich represent one of the defendants.

Gunn said he could not comment on the litigation “other than to say, as a not-disinterested attorney, I'd really like to see some rulings on apportionment.”

The FDIC declined to comment on the pending litigation.