Alston & Bird, LLP v. Hatcher Management Holdings, LLC

Maury Hatcher embezzled money from a family holding company, Hatcher Management Holdings (HMH), while he managed it. HMH later sued the law firm Alston & Bird for legal malpractice over its role in Maury's scheme. A jury found the law firm liable and split blame among the firm, HMH, and Maury (who was not a defendant in this case), then a trial judge reduced the firm's damages to reflect Maury's share of fault too. The question for the Supreme Court of Georgia was whether Georgia's apportionment statute allows a judge to cut a single defendant's damages based on a nonparty's percentage of fault, and whether an award of litigation expenses for bad faith can be divided up the same way. The court held that the statute's fault-splitting rule for multiple people only applies when a lawsuit names more than one defendant, so the law firm here could not get its damages reduced for Maury's fault. But the court also held that litigation expense awards are a form of damages and can still be apportioned based on the plaintiff's own fault, so it sent that part of the case back for further review.

OCGA § 51-12-33 (b), which apportions damages by percentage of fault among multiple people, applies only to lawsuits brought against more than one defendant, not single-defendant cases; but litigation expenses awarded under OCGA § 13-6-11 count as damages and are subject to apportionment under subsection (a) based on the plaintiff's own fault.

The ruling clarifies that Georgia defendants sued alone cannot shrink their damages by pointing to a nonparty's fault, though they may still seek contribution from joint wrongdoers. It also means litigation expense awards tied to bad faith are not automatically shielded from being reduced for a plaintiff's own fault.

Affirmed in part, reversed in part, and remanded

1. The court read the apportionment statute's text closely, noting that subsection (a) applies to actions 'brought against one or more persons,' while subsection (b), which requires splitting damages by each person's percentage of fault, applies only where an action is 'brought against more than one person.'
2. Because the law firm was the only named defendant, the court concluded subsection (b) simply does not apply, since the General Assembly used narrower wording there than in subsection (a) and courts must presume lawmakers meant the different phrasing they chose.
3. The court explained that subsection (c), which tells juries to consider nonparty fault when assessing percentages of fault, does not itself authorize reducing a single defendant's damages; only subsections (a) and (b) actually authorize reducing damages, and neither applies to nonparty fault in a one-defendant case.
4. Turning to litigation expenses under Georgia's bad-faith litigation expense statute (O.C.G.A. § 13-6-11), the court noted that such expenses are defined by statute as part of 'damages,' so they fall within the apportionment statute's requirement to apportion the 'total amount of damages.'
5. The court distinguished this case from its earlier ruling in Federal Deposit Insurance Corporation v. Loudermilk, explaining that fault is only legally impossible to divide when people acted in concert, whereas bad faith by a single defendant is not automatically indivisible and a jury could find the plaintiff partly responsible for it.
6. Because the jury never was asked whether the plaintiff company shared any responsibility for the law firm's bad faith, the court sent the litigation-expense apportionment question back to the Court of Appeals to sort out whether the evidence and jury instructions supported dividing that award.

• apportionment of damages
• legal malpractice
• nonparty fault
• litigation expenses
• bad faith damages