Articles Posted in Georgia Supreme Court

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Dr. Carol Walker, a physician who sold nutritional supplements, filed a damage suit in the State Court of Gwinnet County against AmeriSciences and three of the company's corporate officers (appellants) under the Fair Business Act (FBPA), OCGA 10-1-399(b), for failure to disclose and comply with the repurchase requirements of the Sale of Business Opportunities Act (SBOA), OCGA 10-1-415(d)(1). On appeal, appellants contended that the Court of Appeals erred in failing to give res judicata effect to an earlier Texas declaratory judgment. The court held that Dr. Walker was barred by the Texas judgment from filing an FBPA claim against AmeriSciences in Georgia and a Georgia court could not make its own determination regarding whether the forum selection clause precluded the filing of an FBPA claim in Georgia. Also at issue was whether the State Court of Gwinnett County had personal jurisdiction over the individual defendants. The court held that because the "fiduciary shield" doctrine did not apply in Georgia, the allegations of the complaint were sufficient to withstand appellants' attack on the trial court's jurisdiction over the individual defendants on the ground that they acted in their corporate capacities. Appellants further contended that, even if the trial court had personal jurisdiction over the individual defendants, they could not be personally liable for violations of the SBOA because none of them was a "seller" within the meaning of OCGA 10-1-410(10). The court held that pursuant to OCGA 10-1-399(a) and 10-1-417(b), each individual defendant was subject to personal liability for any violation of the SBOA which he had committed and which was proved by Dr. Walker. View "Amerireach.com, LLC., et al. v. Walker" on Justia Law

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Cobb Electric Membership Corporation ("Cobb EMC") members filed a derivative action against Cobb EMC and the parties subsequently entered into a settlement agreement. At issue was whether the Court of Appeals erred by failing to defer to the trial court's determination that Cobb EMC's Board of Directors ("Board") was authorized to adopt the proxy voting bylaw agreement. Also at issue was whether the Court of Appeals erred in holding that the use of the proxy voting pursuant to the Board's bylaw amendment violated the provision of the settlement agreement. The court held that although the Court of Appeals mischaracterized the nature of the issue on appeal, it did utilize the correct standard for reviewing the trial court's legal conclusions, i.e., de novo review. The court also held that while it agreed with the conclusion that the Board's proxy voting bylaw amendment violated the terms of the settlement agreement, the Court of Appeal's reasoning was not the basis upon which the court's conclusion rested. The court held, nevertheless, that the Board's proxy voting bylaw amendment violated the trial court order approving the settlement agreement because it significantly changed the conditions under the parties' agreed-upon plan for proposing the option of proxy voting. The court finally held that, because the trial court's May 2009 order did not address the "full cooperation" requirement of its previous order, the Court of Appeals erred in considering the issue. Accordingly, the judgment was affirmed in part and reversed in part.