The Georgia Court of Appeals reinstated the bulk a $2 million legal malpractice verdict against Alston & Bird, ruling the trial judge should not have reduced it to less than $700,000 to reflect the 60% of fault a jury assigned to a nonparty.

The opinion leaves Alston & Bird on the hook for about $1.7 million, including post-apportioned damages of more than $640,000 and $1.1 million in attorney fees. But the appeals court tossed more than $340,000 in prejudgment interest the jury awarded.

The opinion arises in part from an earlier Court of Appeals ruling in which the court allowed the nonparty—a former Alston client—to be added to the jury form over the plaintiffs' objections.  

Thursday's ruling was penned by one of the court's newest members, Judge Verda Colvin, a former assistant U.S. attorney in Georgia's Middle District who was appointed to the court by Gov. Brian Kemp last month. 

The convoluted dispute began when Maury Hatcher, the former manager of family-owned business Hatcher Management, was accused of looting the company and fleeing to Florida with more than $1.2 million in ill-gotten gains. The company sued Hatcher and won a $4 million judgment that remains unpaid.

The company sued Alston & Bird in 2012 for legal malpractice and breach of fiduciary duty, claiming former partner Jack Sawyer knew Hatcher was looting the business, and failed to inform the family members about their right to review and receive company disbursements, among other claims. 

Alston filed a notice of nonparty fault seeking to add Hatcher and his siblings, Jerry and Barry Hatcher, to the case. Fulton County Superior Court Judge Craig Schwall refused to do so. 

The Court of Appeals reversed Schwall in 2016, citing the Georgia Supreme Court's 2015 decision in Zaldivar v. Prickett.

That decision said the 2005 apportionment statute "requires the trier of fact in some cases to divide responsibility for an injury among all of those who 'contributed to' it—parties and nonparties alike—according to their respective shares of the combined 'fault' that produced the injury."

The case went to trial in 2018, and the jury awarded the company more than $2.1 million, including $697,614 in damages, attorney fees and expenses of $1,096,561 and prejudgment interest of $341,831.

The panel apportioned 60% of the fault to Maury Hatcher, 32% to Alston and 8% to the plaintiff, Hatcher Management.

Alston's lawyers, Robbins Ross Alloy Belinfante Littlefield partners Richard Robbins, Jason Alloy and Jeremy Littlefield, told Schwall he should reduce the entire verdict against the firm by 68%, per the jury's apportionment of fault.

Hatcher's lawyers, Harmon Caldwell Jr., Harry MacDougald, Jeremy Moeser and Christine Dial of Caldwell, Propst & DeLoach, argued that only the 8% apportioned to their client should be subtracted and the rest levied against Alston.

After briefings and a hearing, Schwall ultimately sided with Alston, awarding $683,522 to Hatcher. Both sides appealed. 

Colvin's May 21 order, written with the concurrence of Judges Yvette Miller and Clyde Reese, said Schwall erred in allowing the jury to award prejudgment interest.

Relevant Georgia law only allows such interest to be assessed in breach-of-contract claims, Colvin wrote, and Hatcher asserted no such claim against Alston in its complaint. 

Thus, "we must conclude that the trial court erred when it authorized the recovery of prejudgment interest here," Colvin said.

But Alston's assertion that it was not responsible for the 60% of the judgment apportioned to Maury Hatcher was also incorrect, she said. 

Pointing to the court's earlier opinion in the case, Colvin said the law draws a distinction between the apportionment of fault to a plaintiff and of damages levied against a defendant in a case in which a nonparty is also blamed.

The law states that a trial court "shall reduce the amount of damages otherwise awarded to the plaintiff in proportion to his or her percentage of fault," wrote Colvin.

As the court has ruled in an earlier case, "we made clear that [the apportionment statute] does not authorize a jury to apportion damages against a nonparty," the opinion said. 

"Here, the jury awarded compensatory damages in the amount of $697,614," Colvin wrote. "Because this is an action involving only one defendant, and because the jury found that [Hatcher] was 8% responsible for the injuries it suffered, the trial court should have reduced this award of compensatory damages by 8% rather than 68%."

Similarly, she said, the award of attorney fees should not have been reduced because the jury specifically found that Alston acted in "bad faith."

"Given that the court's 68% reduction in the award resulted in a final judgment of $683,522.07—less than the jury's award of fees and costs alone—it is clear that the trial court included the fee award as part of 'all damages awarded by the jury,'" Colvin wrote.

There was "nothing in the jury's verdict to indicate that there was any allocation of bad faith to anyone other than Alston & Bird," she said, and thus those fees should not have been reduced.  

Alston's lawyers referred a query to the firm's managing partner, Steve Collins, who did not respond to requests for comment. Hatcher's attorneys also did not respond to queries.