Alston & Bird LLP and two of its attorneys, W. Thomas Carter, III, and Randolph A. Moore, III, defendants below, appeal from the trial court’s grant of partial summary judgment to their former clients, Mellon Ventures II, L. P.; Noro-Moseley Partners IV, L. P.; Noro-Moseley Partners IV-B, L. P.; SBK Capital, LLC; and GE Capital Equity Investments, Inc. collectively the “appellees” or “investors”, in a lawsuit asserting several claims arising out of a soured financial transaction, including legal malpractice. Appellants also appeal from denial of their motion for partial summary judgment and from several procedural and evidentiary rulings. Finding error, we affirm in part and reverse in part. Summary judgment is appropriate if the pleadings and evidence “show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” OCGA § 9-11-56 c. On appeal from the grant or denial of summary judgment, we conduct a de novo review, with all reasonable inferences construed in the light most favorable to the nonmoving party. A grant of summary judgment must be affirmed if right for any reason, whether stated or unstated. It is the grant itself that is to be reviewed for error, and not the analysis employed.1 So viewed, the evidence shows that, in 1999, Joan Lyman and Michael Pearson founded SecureWorks, a small computer software company “SecureWorks” or “the company”. Lyman and Pearson later hired Jardon Bouska to join the company; these three are referred to herein collectively as the “managers.” In 2000, the company sought additional capital; and in October 2000, SecureWorks agreed to a tentative deal whereby the investors would invest $20 million in the company. In return for the infusion of money, the managers would cede control of the company to the investors by issuing them “Class C Preferred Stock,” which allowed the investors to outvote the common stock owned by the managers. After reaching this tentative agreement with the managers, Mellon, the lead investor, hired appellants Carter and Moore to draft the final documents.2 Although only Mellon hired the attorneys and gave them their instructions, it was the custom in the venture capital world that the attorney retained by the leading investor would also represent other investors who might be invited by the leading investor to participate in the deal. Mellon brought GE Capital into the deal as an additional investor. As the transaction progressed, GE and other investors demanded additional terms, including a provision that would increase the number of the investors’ preferred shares if the company missed revenue targets, changes to the managers’ employment agreements, and a lock-up provision that would prevent the managers from selling their shares except in an initial public offering, even if the investors fired them from the company. As a result, a day or so before the closing, Lyman and the other managers requested that the contract be changed to provide them additional protection in the event that the investors later decided to sell out and to transfer their preferred stock to new investors with whom the managers might not feel comfortable. Mellon, on behalf of all the investors, agreed and asked appellants to revise the draft contract to make certain concessions in this regard to the managers. The result was Section 2.3 b of the Shareholders’ Right of First Refusal and Co-Sale Agreement the “Shareholders Agreement”, executed October 30, 2000, a section referred to as the “tag-along” clause. Unfortunately, the tag-along clause conflicts with a provision of the corporate charter, the so-called “waterfall” clause. It is undisputed that, late in the process, someone with Alston & Bird “cut and pasted” the tag-along clause from an older contract for prior financing of the company. The transferred paragraph was not appropriate for the economics of the new financing. No one caught the mistake until after the closing.
A few years after the closing, the investors became convinced that the unilateral drafting error in the closing documents of the Class C Preferred Stock refinancing impaired the value of their investment and made it difficult to sell their interest in the company. Attempts to negotiate a settlement with the managers failed, and the investors, represented by new counsel, filed suit against the managers, seeking to reform the Shareholders’ Agreement to reflect the original intent of the investors. In settlement of that lawsuit, the investors paid approximately $5.4 million to the managers. In return, the managers agreed to a redrafted tag-along clause. The investors then sued Alston & Bird, Carter, and Moore, alleging legal malpractice in the preparation of the documents relating to the Series C Preferred Stock refinancing, especially the Shareholders Agreement.
