Hard cases make bad law, as the saying goes. The Georgia Court of Appeals recently resisted that outcome, however, in a dram shop case where an intoxicated guest left the defendant’s home, ran a red light and struck another car, killing a mother and injuring her minor son. In Shin v. Estate of Camacho, Case No. A10A0244 (Ga. Ct. App., January 21, 2010), the Court held that, because the plaintiff had failed to show the defendant host served alcohol to the guest after he became noticeably intoxicated, the host was not liable for the subsequent actions of the guest.

Strictly construing Georgia’s Dram Shop Act, O.C.G.A. § 51-1-40, the Court held that there was an absence of evidence to support the first element of the plaintiff’s case: that the defendant had served alcohol to the guest when he was in an intoxicated state. The Court noted that the Act first provides a general immunity of liability for the person who sells or furnishes alcohol to someone who in turn causes injury to another because of his intoxication. The limited exception is when the person “knowingly sells, furnishes, or serves alcoholic beverages to a person who is in a state of noticeable intoxication, knowing that such person will soon be driving a motor vehicle.” O.C.G.A. § 51-1-40(b). In this case, the defendant knew Park would be driving a vehicle, and Park had two more drinks after he was noticeably intoxicated, but it was undisputed that neither the host nor his wife provided the drinks or saw him drink them. Thus, although the host had provided alcohol to Park to the point he was noticeably intoxicated, the host did not serve him after that. The host, therefore, could not be liable to the unfortunate third person injured by the drunk driver.

Last year we reported on Condra v. Atlanta Orthopaedic Group, 285 Ga. 667, 681 S.E.2d 152 (2009), in which the Georgia Supreme Court overruled prior case law prohibiting the admission of evidence of an expert witness’s personal medical practices. Prior to Condra evidence of an expert’s own practice was deemed irrelevant on the grounds that the standard of care is that which is employed by the medical profession generally, not what one individual doctor thought was advisable and would have done under the circumstance.

On December 31, 2009, the Georgia Court of Appeals took the holding in Condra one step further. In Griffin v. Bankston, 2009 Ga. App. LEXIS 1454 (2009), plaintiff brought a dental malpractice action to recover damages stemming from her oral surgeon’s alleged negligence in failing to administer an antibiotic before, during, or after the surgical extraction of her wisdom teeth despite the presence of certain risk factors which plaintiff contended called for such antibiotics. A few days after her surgery, plaintiff began having difficulty breathing and was rushed to the hospital by her parents where she underwent an emergency tracheotomy to open and preserve her airway. Physicians at the hospital determined that plaintiff was suffering from a virulent bacterial infection that originated in her mouth. To combat the infection, she was placed on a powerful combination of antibiotics and underwent two surgeries for the placement of drainage tubes in her face, mouth, and neck. The treatment regime ultimately proved successful, but plaintiff suffered an extreme exacerbation of an already existing condition of vitiligo, a skin disorder that causes loss of pigment.

At the malpractice trial, an expert for plaintiff testified that the failure to provide plaintiff with penicillin was the cause of the virulent bacterial infection she suffered. In contrast, a defense expert testified that the oral surgeon was not required to give penicillin under the applicable standard of care. But, arguably the most compelling testimony came from one of the physicians who treated plaintiff during her hospitalization after the infection problem arose. During his deposition, plaintiff’s treating physician testified that he did not believe that administering penicillin would have been effective in light of plaintiff’s "mixed flora" infection that included bacteria resistant to that antibiotic. The trial court allowed the introduction of almost all of the treating physician’s deposition testimony, but excluded a portion of the deposition in which he testified that his personal practice was to administer penicillin as a preventative measure when he extracts impacted wisdom teeth and a steroid is used. The jury returned a verdict in favor the defense.

Consistent with the law in effect at the time, the Court of Appeals upheld the trial court’s ruling excluding the personal practice evidence. However, following Condra, the Georgia Supreme Court remanded the case back to the Court of Appeals to reconsider in light of that decision. Upon reconsideration, the Court of Appeals found that the same reasoning employed by the Supreme Court in Condra would apply to any case where evidence of the physician's personal practices could be construed by the jury as calling into question the credibility of the physician's testimony at trial, irrespective of whether the physician was a standard of care expert. In other words, “evidence that [the treating physician] routinely took the same precaution to guard against infection that he now claimed would not have made a difference in the present case arguably called into question the credibility of such a claim.” Concluding that the exclusion of evidence of the treating physician’s personal practice undermined the jury's ability to fully evaluate his credibility and deprived plaintiff of her substantial right to a thorough and sifting cross-examination, the Court of Appeals ordered a new trial where such evidence would be admissible.

Generally, a party may not bring a direct action against another party’s liability insurer. Hartford Ins. Co. v. Henderson & Son, 258 Ga. 493 (1988). In that case, the Georgia Supreme Court held that “the general rule is that because there is no privity of contract, a party may not bring a direct action against the liability insurer of the party who allegedly caused the damage unless there was an unsatisfied judgment against the insured or it is specifically permitted either by statute or provision in the policy.”

Significantly, while the Direct Action Statute provides for an “independent action,” the Plaintiff has no separate claim for damages against the motor carrier’s insurer. Andrews v. Yellow Freight Sys., 262 Ga. 476 (1992). The provision allowing joinder of the insurer is not intended, in any respect, to enhance the value of a third party’s claim for damages. Id. Thus, the mere presence of the insurer as a party defendant should theoretically have no effect on the issues of liability or injuries and should not affect the amount of the verdict. Id.

In Werner Enterprises v. Stanton, Georgia Court of Appeals, Case Nos. A09A1699 and A09A1708 (January 13, 2010), the Georgia Court of Appeals found that former O.C.G.A. § 46-7-12.1 did not authorize a direct action against an excess carrier. In that case, Plaintiffs filed suit against Werner Enterprises, Inc., Rafael Ferrer, and Liberty Mutual for the deaths of Mary Gordy and Charles Evans after their motorcycle collided with a freight truck driven by defendant Ferrer. Liberty Mutual moved for summary judgment on the grounds that former O.C.G.A. § 46-7-12.1 authorized direct actions against primary liability insurers, but not excess insurers. Werner was self-insured with $1 million in coverage and the policy issued by Liberty Mutual was an excess policy providing $4 million of coverage in excess of Werner’s self-insurance. Plaintiffs argued that "Werner's self-insurance was not insurance because there was no third party to assume the risk for Werner, and that, therefore, Werner simply had a $1 million deductible." The Court rejected Plaintiff's argument.

Relying on an earlier case, Jackson v. Sluder, 256 Ga. App. 812 (2002), the Court of Appeals agreed with Liberty Mutual and found that an excess policy is not subject to suit under the Direct Action Statute. The court concluded that

[n]othing in the statute mentions any other insurance or provides authorization for suit against the excess insurer. Under the guise of construing a statute, we are not at liberty to rewrite it. Moreover, excess insurance coverage is not regarded as collectible insurance until the limit of liability of the primary policy is exhausted.
Werner Enterprises (quoting Jackson, 256 Ga. App. at 818).

Although the Direct Action Statute continues to be a thorn in the side of insureds and their carriers, we can take some solace in the Court of Appeals’ unwillingness to extend the statute to provide for a direct action against an excess carrier.

In Rutherford v. Revco, Case No. A09A1331 (Ga. Ct. App., Nov. 24, 2009), and Nosiri v. Helm, Case No. A09A1563 (Ga. Ct. App., Dec. 1, 2009), the Georgia Court of Appeals rendered questionable decisions denying the defendants summary judgment in cases where the plaintiffs appeared to have equal knowledge of the hazardous condition. These cases point out the increasing difficulty premises liability defendants face in convincing the court that they should prevail as a matter of law.

Reiterating the rule that a plaintiff must show the defendant had knowledge of the hazard and that the plaintiff lacked such knowledge despite the exercise of ordinary care, the Court first held that the defendant had constructive knowledge of the hazard because “[n]otice of the defect is presumed in cases of defective construction.” As to the second part of the test, that is, whether the plaintiff had equal knowledge of the hazard, the Court held “the fact that Rutherford had walked into the store once does not as a matter of law give her actual or constructive knowledge of the hazard she faced walking out of the store directly onto the steep ramp.” To prevail, the defendant must show that the plaintiff was aware of the “specific hazard,” not just knowledge of “the generally prevailing hazardous conditions.” The Court noted that the plaintiff’s view of the ramp was blocked by the door before she exited, there was no landing, and the ramp was not painted to distinguish it from the sidewalk below. The Court dispensed with the prior traversal rule by holding that “going up a ramp is obviously very different from coming down a ramp.”

Judge Andrews dissented. Because the plaintiff went up the ramp to get inside the store, he argued, “she is presumed to have had equal knowledge of any hazard.” More importantly, Judge Andrews pointed out what the majority failed to discuss: the plaintiff’s own testimony that she did not know why she fell. A plaintiff must be able to identify the cause of her fall. When the plaintiff can only speculate as to the cause, the defendant is entitled to summary judgment.

In Nosiri v. Helm, a 5-2 decision, the Court affirmed the denial of summary judgment for the defendant even though the undisputed facts appeared to show the plaintiff had equal knowledge of the hazard. The plaintiff was an independent contractor with a prosthesis on her left leg. Prior to her accident, she had complained to one of the defendants about wires, including the defendant’s radio and cell phone charger wires, which lay across the floor near her workstation. She would often move the cell phone cord out of the way, as she did the day before her accident. The plaintiff was injured when, after passing by the defendant and another man twice, she came by them a third time and the cell phone cord caught her prosthesis, causing it to come off and the plaintiff to fall.

Citing Robinson v. Kroger Co., 268 Ga. 735 (1997), the majority held that a jury must determine whether the plaintiff exercised reasonable care. As to the plaintiff’s knowledge of the hazard, the Court held that “while there is no question that Helm was aware of the existence of the cell phone cord the day before her fall and the other days that she moved it, there is no evidence that she was aware of its exact position at the time it tripped her.”

Judge Andrews, joined by Judge Johnson, again dissented. Judge Andrews pointed out that the plaintiff had worked at the location for three months and said something about the phone cord every day. On the day of the accident, she walked across the cord twice before it caught her leg. Judge Andrews too cited Robinson and the line of cases in which “the evidence was undisputed that the plaintiff had knowledge of the hazard equal to or greater than that of the owner/occupier, making it impossible for the plaintiff to prove that the owner/occupier had . . . superior knowledge.” Here, too, the plaintiff’s own voluntary negligence should have barred her claim. Judge Andrews stated that the majority’s holding “construes the ‘equal knowledge’ and ‘voluntary negligence’ defenses set forth in Robinson, supra, so narrowly as to virtually eliminate the owner/occupier’s right to summary judgment.”

An action for medical malpractice in Georgia must be brought within two years after the date on which an injury or death arising from a negligent or wrongful act or omission occurred. O.C.G.A. § 9-3-71(a). With some exceptions, this usually means the date of the allegedly negligent treatment.

While small revisions and refinements have been made to the “new injury rule” rule by Georgia courts over the years, the Georgia Court of Appeals significantly expanded the rule 17 months ago in Lee v. McCord, 292 Ga. App. 707 (2008) where the rule was extended beyond the misdiagnosis context to a negligent treatment case as well. However, in McCord v. Lee, 2009 Ga. LEXIS 639 (2009), the Georgia Supreme Court reversed, again limiting the new injury rule only to cases where a misdiagnosis results in a significantly more serious medical condition.

Floyd Lee was diagnosed with prostate cancer in October 2001. One month later, radiation oncologist, Dr. Dale McCord, treated the cancer by implanting radioactive seeds in Lee’s prostate. Although the seeds were allegedly implanted improperly, Lee was symptom free until 2004 at which time Lee's doctors determined that his cancer had metastasized. The following year, Lee filed a medical malpractice suit against McCord, but the the trial court granted summary judgment on statute of limitations grounds. The Court of Appeals reversed, reasoning that using the “new injury” test from misdiagnosis cases, a jury could conclude that that Lee was not “injured” from the improperly planted radioactive seeds until he began experiencing serious symptoms. The Georgia Supreme Court granted certiorari to determine whether “the Court of Appeals erred in utilizing the ‘new injury’ exception to the general rule for determining commencement of the limitations period in negligent misdiagnosis cases, even though this case does not involve a misdiagnosis.”

In its 5-2 opinion reversing the holding of the Court of Appeals, the Georgia Supreme Court characterized the lower court’s holding as “expanding the limited ‘new injury’ exception into a universal standard for medical malpractices cases;" something the majority of the Court was not prepared to do. In its decision, the Supreme Court stated that the rationale for the exception, which focuses on the point which a new injury becomes manifest, is that it is often impossible to pinpoint the date that the new injury actually arose other than at some point between the misdiagnosis and the correct diagnosis. However, in her dissent, Chief Justice Hunstein (joined by Justice Benham) contended that the same rationale underlying the exception in misdiagnosis cases would apply equally to Lee’s situation.

A debate is raging among Georgia's trial judges, the defense bar, and the plaintiff's bar on the "correct" interpretation of the recently enacted statutes pertaining to joint and several liability. In DeKalb County alone, judges are split on the issue. On January 22, 2009, in a case being defended by this firm, Judge Janis Gordon gave the defense the opportunity to apportion damages to a non-party when there was only one named defendant and the plaintiff passenger was not responsible for his injuries. Taylor v. DeKalb County, Civ. Action No: 06A50694-7, State Court of DeKalb County (January 22, 2009). See also Georgia Insurance Defense Lawyer blog post dated January 26, 2009, DeKalb County Judge Upholds Constitutionality of Apportionment Statute: O.C.G.A. § 51-12-33.

Amidst this confusion, my client, DeKalb County, faced an interesting dilemma as the Taylor case neared trial before Judge Gordon. We had timely filed a Notice of Fault of Non-Party identifying the driver of Plaintiff's vehicle as the at-fault non-party and won on the apportionment issue. However, the plaintiff's special damages alone were approximately $1,000,000, and if the jury assigned even 5% of fault to my client, then the verdict against DeKalb County would still have been higher than the limits of DeKalb County's insurance policy. (In Georgia, a county waives sovereign immunity only to the extent of liability insurance purchased.)

Consequently, we were in a situation where the jury could believe it was doing DeKalb County a favor by assigning very little blame to the DeKalb County Police Officer who struck the vehicle in which Plaintiff was a passenger, but because the damages were so high, DeKalb County would still be forced to pay its entire policy limits. Additionally, we faced the uncertainty of what would happen on appeal if the jury apportioned damages in a case where there was just one named defendant and the plaintiff was not negligent.

After much discussion within our firm and with our trial consultant, and with great angst, we informed Judge Gordon that in spite of all the briefing and her Order allowing us to apportion damages in this case, we were going to waive that right. Instead, we wanted to go for all or nothing by challenging the jury to render a complete defense verdict or to find against DeKalb County and award the full amount of damages to Plaintiff. Our strategy was risky given that it allowed Plaintiff's counsel to argue joint and several liability: that if the police officer was even 1% negligent, DeKalb County was 100% responsible.

Thankfully, our decision paid off and on December 17, 2009, the jury returned a defense verdict for DeKalb County. The jurors had been split 7-5 in our favor for several hours and finally, after being re-charged twice on the definition of proximate cause, they unanimously found in favor of DeKalb County. I believe, however, that had those 5 minority jurors been given the opportunity to apportion fault to the non-party driver, the verdict would have reflected a compromise and DeKalb County would have been forced to pay policy limits. My belief was validated the next day when Plaintiff's counsel e-mailed me a "postscript" saying simply that he had spoken to several jurors and that we were right to waive apportionment.

In a premises liability case, it is essential to establish the status of the plaintiff to determine the duty owed by the property owner. A recent case in the Georgia Court of Appeals illustrates the critical distinction between an invitee and a licensee. In Jarrell v. JDC & Associates, LLC, 296 Ga. App. 523 (2009), the Court agreed that the defendants were entitled to summary judgment because the plaintiff was a licensee, not an invitee.

On appeal, the Court rejected the plaintiff’s argument that he was an invitee. The Court restated the definitions of invitees and licensees and the respective duties owed to each. An invitee is someone who, “by express or implied invitation, has been induced or led to come upon premises for any lawful purpose.” A licensee “is one who is permitted, either expressly or impliedly, to go on the premises of another, but merely for his own interest, convenience, or gratification.” Thus, the property owner owes a greater duty of care to the invitee, that is, “to exercise ordinary care to keep the premises and approaches safe.” The duty owed to a licensee is merely “not to injure the licensee wantonly or willfully.” The test “is whether the party coming onto the business premises had present business relations with the owner or occupier which would render his presence of mutual benefit to both, or whether his presence was for his own convenience, or was for business with one other than the owner or occupier.”

In this case, the Court found no evidence that the defendant property owners even knew the plaintiff was on the property. The plaintiff’s purpose there was to conduct business connected with his employer’s vendor, not the defendants. There was also no evidence that the defendants had invited BellSouth onto the property to check its vendors’ work. The hidden hole was not a mantrap or pitfall because the defendants had not prepared it to cause harm to the plaintiff. Thus, the plaintiff had failed to show the defendants had willfully and wantonly caused him harm. The Court also noted that licensees must be ignorant of the risk involved, and here, the plaintiff testified that he had walked hundreds of construction sites that used straw for erosion control. The plaintiff failed to show the defendants breached the duty owed to him as a licensee and, therefore, the defendants were entitled to judgment as a matter of law.

In Ramos-Silva v. State Farm Inc. Co., 2009 Ga. App. LEXIS 1250 (2009), the Georgia Court of Appeals held that a Uninsured Motorist (“UM”) insurer’s right of subrogation survives the execution of a limited liability release.

In Ramos-Silva, Roberto Ramos-Silva was involved in a motor vehicle accident with Mary Reddy. Ms. Reddy was injured in the accident. Ramos-Silva’s liability insurer settled with Ms. Reddy and her husband, agreeing to pay its $25,000 policy limits in return for a limited liability release pursuant to O.C.G.A. § 33-24-41.1. Ms. Reddy also recovered $75,000 from her own insurer, State Farm Insurance Company, pursuant to the UM provision of her automobile insurance policy.

Following these settlements, State Farm filed suit against Ramos-Silva seeking subrogation for the money it paid to Ms. Reddy pursuant to O.C.G.A. § 33-7-11, which expressly grants a UM carrier the right to bring a subrogation claim against the tortfeasor to recover monies paid to the carrier’s insured. See O.C.G.A. § 33-7-11(f). However, when State Farm sought to pursue its subrogation rights against Ramos-Silva, Ramos-Silva contended that the limited release barred State Farm’s action because State Farm’s right to subrogation was not expressly reserved within the limited release. The trial court rejected Ramos-Silva’s argument and denied his motion for summary judgment on those grounds. The Court of Appeals upheld the trial court’s ruling.

In reaching its decision, the Court determined that doing so was necessary in order to construe O.C.G.A. § 33-7-11 and O.C.G.A. § 33-24-41.1 “in a consistent and harmonious manner.” Significantly, the Court also found it important to recognize (as it has done previously) that one of the equitable purposes of subrogation is “to deter wrongdoing by placing the ultimate responsibility for paying an obligation on the person who in equity and good conscience ought to pay for it." (citations omitted)

As an agency of the state, the Georgia Department of Transportation (“DOT”) is entitled to sovereign immunity except to the extent sovereign immunity has been waived by the provisions of the Georgia Tort Claims Act (“GTCA”). See Georgia Military College v. Santamorena, 237 Ga. App. 58, 61; O.C.G.A. § 50-21-21. Under the GTCA, the State has agreed to waive sovereign immunity for the torts of state officials and employees subject to certain exceptions and limitations. O.C.G.A. §§ 50-21-23 and 50-21-24. O.C.G.A. § 50-21-24 enumerates 13 exceptions to the State’s waiver of sovereign immunity. In DOT v. Miller, 2009 Ga. App. LEXIS 1293 (November 10, 2009), DOT argued that the “discretionary function” exception to the State’s waiver of sovereign immunity barred Plaintiff’s recovery. The Court of Appeals rejected that argument.

The GTCA then defines “discretionary function or duty” to mean “a function or duty requiring a state officer or employee to exercise his or her policy judgment in choosing among alternate courses of action based upon a consideration of social, political, or economic factors.” O.C.G.A. § 50-21-22 (2). “This definition of discretionary function is almost identical to the definition of discretionary function that has been developed by the federal courts in construing the discretionary function exception to the Federal Tort Claims Act.” Brantley v. Dept. of Human Resources, 271 Ga. 679, 682 (1999). The United States Supreme Court has stated that the purpose of the discretionary function exception “is to prevent judicial ‘second guessing’ of legislative and administrative decisions grounded in social, economic, and political policy through the medium of an action in tort,” and that, for that reason, “when properly construed, the exception ‘protects only government actions and decisions based on consideration of public policy.’” Id. citing U.S. v. Gaubert, 499 U.S. 315 (1991), quoting Berkowitz v. U.S., 486 U.S. 531, 537 (1988). “Under federal law, the discretionary function exception may apply not only to policy and planning level employees, but also to employees who make day-to-day operational and management decisions.” Id. at 683 citing U.S. v. Gaubert, 499 U.S. 315 (1991). “It is the nature of the conduct, rather than the status of the actor, that governs whether the discretionary function exception applies to a given case.” Id.

In Miller, Plaintiff’s decedent was killed after the vehicle he was driving hydroplaned, left the roadway, and landed submerged in a roadside pond. Plaintiff argued that DOT negligently failed to keep a culvert clear of debris which caused accumulated rainwater from the pond to cover the travel way of the road.

In support of its Motion for Directed Verdict, DOT argued it was entitled to sovereign immunity based on the Discretionary Function Exception to the waiver of sovereign immunity because DOT personnel could make a “judgment call” as to which culverts to inspect after each major storm. Id. At *3 and *4.

The Court disagreed, finding that the “judgment call” relied upon by DOT in Miller was not the type of discretionary function contemplated by the GTCA. Relying on DOT v. Brown, 267 Ga. 6, 7 (1996), (Georgia Supreme Court found that DOT's initial decision to extend a highway was a policy decision within the meaning of the discretionary function exception but the decision to open the road prior to completion with an alternative traffic control system was not.) the Court held that “the day-to-day decision of whether and where to send out DOT personnel to inspect for road hazards on the day in question was not a basic governmental policy decision for purposes of the GTCA.” Id. at *5.

“Electronic Discovery,” two words that strike fear into the hearts of many lawyers. Ask most seasoned litigators to define “metadata,” “native format,” or “clawback agreements” and you will see the eyes of the proverbial deer in the headlights. Unfortunately, however, the time has come to hold our collective noses and jump in or we risk disaster for our clients.

The most frightening aspect of ESI is that is often contains metadata, which has been aptly described as the “ghost haunting electronic documents.” See David Hricik and Chase Edward Scott, Metadata: The Ghost Haunting E-documents, GA Bar Journal, Vol. 13, No. 5, (2008). Metadata is simply the data about data. You can see metadata in Microsoft Word when you click on properties and can display the author of a document, the date the document was created, the number of times the document was opened or even the number of minutes spent creating the document. Metadata can also be embedded, like the fax band which shows the time, date, and fax number on every fax we send or receive. While these examples only represent the tip of the iceberg, you can start to imagine the potentially tremendous impact on our clients when they are forced to produce ESI.

The seminal case on e-discovery is Zubulake v. UBS Warburg, 217 F.R.D. 309 (S.D.N.Y. 2003) which began as a garden variety employment discrimination case and ultimately spawned four other cases, Zubulake II – Zubulake V, which together signaled the transformation of discovery from a predominately paper-based process to an electronic one.

See Zubulake I, 217 F.R.D. 309 (addressing the legal standard for determining the cost allocation for producing emails contained on backup tapes); Zubulake v. UBS Warburg, LLC, 2003 U.S. DIST LEXIS 7940, No. 02 CIV. 1243, 2003 WL21087136 (S.D.N.Y. May 13, 2003) (‘Zubulake II’) (addressing Zubulake’s reporting obligations); Zubulake v. UBS Warburg, LLC, 216 F.R.D. 280 (S.D.N.Y. 2003) (‘Zubulake III’) (allocating backup tape restoration cost between Zubulake and UBS); Zubulake v. UBS Warburg, LLC, 220 F.R.D. 212 (S.D.N.Y. 2003) (‘Zubulake IV’) (ordering sanctions against UBS for violating its duty to preserve evidence).

The Advisory Committee on Civil Rules responded to the evolving world of electronic discovery by enacting a package of amendments to Federal Rules of Civil Procedure 16, 26, 34, 37 and 45 which all went to effect on December 1, 2006. One of the most significant revisions to the federal rules came with the addition of the phrase “electronically stored information” to Federal Rule 34’s definition of “document.” Additionally, Federal Rule 26(b)(2) was amended to include a two-tiered approach to e-discovery. Relying on Zubulake and its progeny, Rule 26 divided the world of e-discovery into two categories, “accessible data” and “inaccessible data.” Accessible data can be obtained without unreasonable burden or technological difficulty and can be discovered without court intervention. Conversely, “inaccessible data” includes information that often requires the assistance of an IT consultant to retrieve and requires good cause and a court order for production. While inaccessible data need not be produced in the absence of an agreement or court order, parties nevertheless have a duty to preserve the data.

The issue of what electronically stored information needs to be preserved and when was also addressed by Zubulake in its progeny. The Zubulake court held that when a party, “reasonably anticipates litigation,” the obligation to preserve both paper documents and ESI is triggered. Unfortunately, neither Zubulake or the Federal Rules prescribed a bright-line test and instead, what triggers the duty to preserve ESI is determined on a case-by-case basis.

Zubulake also imposed the duty upon attorneys to understand our clients’ retention programs and information management systems. We were required to issue a litigation hold notice once litigation is reasonably anticipated. With that litigation hold, attorneys have a duty to explain ESI as a source of discovery, the importance of suspending ESI deletion, and inform our clients to suspend all routine document destruction. The risk of spoliation (the intentional destruction of evidence) can include fines, the dismissal of pleadings, or an adverse inference instruction whereby a court can charge the jury that the defendant deleted certain information after they had an obligation to preserve it. The jury is then instructed that it can infer that the deleted information was harmful to the defendant.

Federal Rule 37 was amended to restrict the Judge’s obligation to impose sanctions on parties for the failure to provide ESI lost as a result of “the routine, good faith operation of an electronic information system.” Fed.R.Civ.P. 37(e). However, this so called “safe harbor” may also prove unsafe if the litigation hold letter or preservation letter has been issued, but our client fails to disable its auto-delete functions.

Finally, Rule 26(b) encourage parties to execute so-called “clawback” agreements, which permit parties to request the return of privileged ESI which was inadvertently produced without a claim that the privilege was waived. Simply put, these clawback agreements acknowledge the fact that the sheer volume of ESI makes the inadvertent or accidental production of privileged information inevitable and simply permits parties to request the return of that information without waiving their privilege to the information contained thereon. See also Federal Rule of Evidence 502.

Thankfully, there is plenty of help available to lawyers and our clients as we step into the world of e-discovery. The Honorable Shira A. Scheindlin, author of the landmark Zubulake opinions, has co-authored Electronic Discovery and Digital Evidence: Cases and Materials with Daniel J. Capra and The Sedona Conference. Books such as eDiscovery, Plain and Simple (or as I call it, e-discovery for dummies) by Allison Brecher and Shawnna Childress can serve as a good introduction for those just learning about e-discovery. There are also companies like Fios, Inc. or RenewData which specialize in helping organizations process, analyze and review potential relevant electronically stored information associated with litigation. Finally, there is specialized software for e-discovery, like Clearwell’s e-discovery platform, Discover-e, or Lexis Nexis’s Applied Discovery.

The year 2010 will be a watershed year for e-discovery. It is time for lawyers to bite the bullet so that we can understand ESI, protect our clients from the consequences of not preserving ESI, and use ESI strategically to our client’s benefit throughout the litigation process and at trial.

In Beneke v. Parker, Case No. S08G2078 (Ga. Sup. Ct., Sept. 28, 2009), the plaintiff’s Complaint was deemed timely even though it was filed two years and two weeks after the date of accident giving rise to the lawsuit. On April 27, 2005, the plaintiff was a passenger in a car which was rear-ended by the defendant. The defendant was cited for following too closely. The plaintiff filed her complaint for personal injuries on May 11, 2007. The defendant filed a motion for summary judgment, arguing that the two-year statute of limitations had run, but the trial court denied the motion. The trial court held that O.C.G.A. § 9-3-99 tolled the statute of limitations until the defendant paid the fine in connection with his traffic citation. O.C.G.A. § 9-3-99 provides that the limitation period is “tolled from the date of commission of the alleged crime or the act giving rise to such action in tort until the prosecution of such crime or act has become final or otherwise terminated.”

The Georgia Supreme Court affirmed the denial of the defendant’s motion for summary judgment and reversed the Court of Appeals’ ruling that there is a question of fact as to whether the traffic charge is a “crime” that would toll the statute of limitations in the civil case. The Court pointed out that a violation of one of the Rules of the Road is a misdemeanor, which is defined as “any crime other than a felony” under O.C.G.A. § 16-1-3(9). Thus, O.C.G.A. § 9-3-99 would apply to toll the statute of limitations until the defendant’s traffic citation for following too closely was finalized. It was unnecessary, therefore, for the jury to determine whether the defendant acted with criminal intent or criminal negligence.

Although the Court agreed with the Court of Appeals that such a ruling “will have a significant impact on personal injury actions arising out of vehicle accidents by tolling the statute of limitation in those situations where a traffic citation is issued,” the Court stated that the statutory language was clear, and that it was up to the Legislature to limit O.C.G.A. § 9-3-99 to criminal intent or criminal negligence crimes should it want that result.

As a practical matter, then, before counsel for the defendant files a motion for summary judgment based on the running of the statute of limitations, counsel must determine whether a traffic citation was issued in connection with the accident at issue and the date of the final disposition of the charge. The statute of limitations begins to run from the date of the disposition of the charge, not the date of the accident.

In a unanimous decision written by new Georgia Supreme Court Justice David E. Nahmias, the Court sent a message to liability insurers this week that even an offer to pay policy limits may not necessarily shield the company from a bad faith claim. In Fortner v. Grange Mut. Ins. Co., the Court reiterated that the true question is still whether the insurance company acted reasonably in its response to the settlement offer.

At the trial of the bad faith claims against Grange, the jury found in favor of Grange. Fortner appealed, arguing that one of the jury charges improperly suggested that a defense verdict was appropriate when an insurer tenders its policy limits. (The charge was based on the “safe harbor” provision recognized by the Georgia Supreme Court in Cotton States Mut. Ins. Co. v. Brightman, 276 Ga. 683 (2003)). A divided Court of Appeals found no error in the charge. However, the Georgia Supreme Court reversed, reasoning that the judge’s charge improperly “instructed the jury that it must return a verdict for Grange based solely on the fact that the insurance company tendered its policy limits without regard to whether the conditions it added were a reasonable response to the settlement offer.” The Court stated that “[o]therwise, if two or more insurers are involved in a case and the plaintiff makes a settlement offer to one insurer that conditions settlement on another insurer also settling, the first insurer could, as a matter of law, avoid a bad faith claim by offering its policy limits but making the offer contingent on unreasonable conditions that a plaintiff is guaranteed to reject.”

Fortner closes a loophole in the law for insurance companies that might abuse the “safe-harbor” protections enunciated in Brightman. However, it also presents a challenge for an insurer that sincerely wants to settle a claim against its insured in a multi-party case where a global settlement cannot be reached. The Court acknowledged that an insurer is still entitled to a “safe harbor from liability for an insured’s bad faith claim . . . by meeting the portion of the demand over which it has control,” but to enjoy such automatic protection, the insurer apparently cannot add any terms whatsoever to the plaintiff’s offer. Nonetheless, the Court’s decision does not mean that an insurance company cannot condition settlement on indemnification language or a full release, as is common practice when settling claims of this nature. It simply means that if it does so, a jury may someday get to decide whether the insurance company’s “conditions” were reasonable and adequately protected its insured’s interests.