The Georgia Court of Appeals has refused to hear an appeal by Arnall Golden Gregory of a trial judge's ruling extending the statute of limitations for filing a legal malpractice lawsuit based on an engagement contract from four to six years.

In their application for interlocutory appeal, lawyers for AGG and two of its attorneys wrote that the order "is the first to apply a six-year statute of limitations to a legal malpractice claim based on the existence of a standard law firm engagement agreement. This represents a significant departure from existing law and should not proceed without this court's review."

The Court of Appeals declined the appeal in a one-sentence letter on April 26, meaning the litigation will continue.

A few weeks before the appellate court nixed AGG's interlocutory appeal, the plaintiff—a solar energy company accusing the firm of costing it millions of dollars involving a Laurens County project—filed a certified offer to settle the case for $2 million.

There has been no response to the offer more than a month later, according to plaintiffs attorneys Shuli Green and Scott Schweber of the Schweber Green Law Group.

They said their client, Greenavations Power and its president, were aware when it hired AGG to represent it in the purchase of about $2 million in of solar panels, equipment and extended warranties, that the firm also represented the vendor, Mage Solar, in other corporate and tax matters.

"But he was not aware that Mage was insolvent and going out of business when they asked him to sign the conflict waiver," said Green. The case represents a "clearly unwaivable conflict," she said.

"AGG knew that Mage had been losing millions of dollars for over a year, they knew it was insolvent and likely going bankrupt," said Schweber. "We feel they had an affirmative duty to reveal this clearly vital information before allowing him to go forward with the purchase."

AGG is represented by Josh Belinfante, Jeremy Littlefield and Craig Kunkes of Robbins Ross Alloy Belinfante Littlefield.

Belinfante referred a query to AGG managing partner Jonathon Eady, who declined to discuss the merits of the case.

"[B]ut we strongly deny the allegations of the suit and intend to continue to vigorously defend this litigation," Eady said via email.

According to the complaint and other filings, the litigation stems from a 2011 decision by the Laurens County Development Authority  to develop a $4.3 million solar energy facility at the Dublin City High School.

The solar panels were manufactured by Mage Solar Projects, a Germany-based company that developed a subsidiary in Dublin. AGG had been representing Mage in a variety of matters since 2010, and firm attorney Wilhelm Ziegler served as Mage's corporate secretary.

The authority hired Greenavations to handle the  project. Greenavations retained AGG to handle the financing and arrange the purchase of solar panels, equipment and extended warranties.

Greenavations knew AGG had a prior relationship with Mage, and the parties signed a conflict waiver in 2012.

The deal closed in 2013, but Mage Solar was out of business by 2014 and could not service the panels or warranties, which were for 20 and 30 years. 

In January 2017, Greenavations and AGG signed an agreement tolling the statute of limitations on any Greenavations claims arising on or after Jan. 20, 2013.

In June 2018, Greenavations Power LLC and Greenavations Power Dublin LLC sued AGG, Ziegler and partner John Gornall Jr. in Fulton County Superior Court for claims including legal malpractice and breach of fiduciary duty.

The complaint argued that the defendants knew Mage was struggling in 2011 and 2012 and concealed that knowledge until late 2013, when the panels had been already delivered and installed.  

AGG filed a  motion for partial summary judgment, arguing that nearly all the claims were barred by a four-year statute of limitations for legal malpractice based on prior case law limiting breach of contract claims to that period under Georgia's breach of contract statute concerning "any implied promise or undertaking." 

The claimed malpractice action occurred in April 2012, AGG argued, when the firm allegedly failed to disclose a "non-waivable" conflict of interest and began representing Greenavations. Thus the statute ran in April 2016, and any claims based on that conflict are time-barred, the defense said. 

In response the plaintiffs argued that another code section applied, citing  O.C.G.A. 9-3-24, which provides a six-year time limit to bring claims for "actions upon simple contracts."   

In March Judge Shawn LaGrua agreed, citing the Georgia Supreme Court's 2010 decision in Newell Recycling v. Jordan Jones & Goulding, which held that an engineering firm sued by a metal recycling company was bound by "a complete written contract," and thus the six-year limit applied.

LaGrua noted that even that limit would have barred the claims but for tolling agreements the parties signed in 2017 and 2018.

She did, however, agree with AGG that the breach of fiduciary duty claims were duplicative of those for malpractice and dismissed them.

She also granted a certificate of immediate review, and in asking the Court of Appeals to reverse her order AGG's lawyers said the issue was not the same as the one in Newell.

The Court of Appeals "has consistently held that a four-year statute of limitations is applicable to a claim for legal malpractice, even where the law firm and attorney entered into a written engagement letter (which is the common practice for most law firms)," AGG's application said.

"Georgia courts have consistently held that standard law firm engagement agreements are 'incomplete' contracts, warranting a four-year statute of limitations for legal malpractice claims," AGG's lawyers wrote.

"Newell does not change that established holding, and at the very least, this Court should determine whether it does so there is uniformity in the State," it said. "Put simply, the question arises out of the unique nature of legal services contracts and not legal services themselves."

Greenavations' response brief denied that LaGrua's order raised issues of first impression and said AGG's "attempt to distinguish law firm engagement agreements from contracts for other types of professional services is a red herring."

The firm "cites no authority to support their contention that the four essential elements of contract construction do not apply to law firm engagement letters," Greenavations argued.