SETTENDOWN PUBLIC UTILITY LLC v. WATERSCAPE UTILITY LLC

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Court of Appeals of Georgia.

SETTENDOWN PUBLIC UTILITY, LLC, et al. v. WATERSCAPE UTILITY, LLC.

Butler v. Waterscape Utility, LLC.

Nos. A13A0830, A13A0831.

Decided: November 13, 2013

George E. Butler II, for Appellant. Robert Matthew Reeves, for Appellee.

Settendown Public Utility, LLC, Ken Curren, Camella Curren, and Waterscape Services, LLC (collectively “Settendown”), and their attorney, George E. Butler, II, have filed separate direct appeals from an order of the trial court disqualifying Butler from representing Settendown in a lawsuit filed against it by Waterscape Utility, LLC (“Waterscape”).1 Waterscape filed a motion to dismiss each of these appeals, arguing that an order disqualifying counsel is an interlocutory order and that Settendown and Butler failed to obtain a certificate of immediate review or follow the application procedures required for an interlocutory appeal.2 We denied the motions to dismiss to allow us to consider Settendown's argument that there is a conflict in Georgia law on the issue of whether a disqualification order is directly appealable. Having read and considered the relevant case law, we find no such conflict. As explained in our previous decision in Lassiter Properties v. Davidson Mineral Properties, 230 Ga.App. 216–217, 495 S.E.2d 663, this issue is controlled by the Georgia Supreme Court's decision in Cherry v. Coast House Ltd., 257 Ga. 403, 404(2), 359 S.E.2d 904 (1987), rather than by Stevens v. Thomas, 257 Ga. 645, 361 S.E.2d 800 (1987). As explained more fully below, Cherry held that an order disqualifying counsel is an interlocutory order. And because neither Butler nor Settendown complied with the requirements for appealing such an order, we are without jurisdiction to consider these appeals. Accordingly, the appeals in both Case No. A13A0830 and Case No. A13A0831 are dismissed.

As an initial matter, the Georgia Code limits our jurisdiction to consider direct appeals to specific categories of judgments set forth in subsections (1) through (12) of OCGA § 5–6–34(a). All other judgments of a trial court are considered interlocutory and are therefore subject to the interlocutory appeal procedure set forth in OCGA § 5–6–34(b).

Our interlocutory appeal statute is not a run-of-the-mill procedural provision․ It is a jurisdictional law by which the General Assembly has limited the authority of Georgia's appellate courts to hear certain cases. “When the order appealed from is an interlocutory order, the appellate court does not acquire jurisdiction unless the procedure of OCGA § 5–6–34(b) for interlocutory appeal is followed.”

(Citation and punctuation omitted; emphasis in original.) American Gen. Finance Svcs. v. Jape, 291 Ga. 637, 644–645, 732 S.E.2d 746 (2012) (Nahmias, J., concurring specially), quoting Cherry, 257 Ga. at 404(2), 359 S.E.2d 904.

Orders granting a motion to disqualify an attorney representing one or more parties are not among the categories of judgments for which a right of direct appeal is granted in OCGA § 5–6–34(a). Thus, both Georgia appellate courts have consistently recognized that disqualification orders are interlocutory and therefore subject to the interlocutory appeal procedure. See Cherry, 257 Ga. at 404(2), 359 S.E.2d 904 (because a disqualification order is interlocutory, a notice of appeal from such an order does not act as a supersedeas unless the interlocutory appeal procedure has been followed); Ewing Holding Corp. v. Egan–Stanley Investments, 154 Ga.App. 493, 495–496(1), 268 S.E.2d 733 (1980) (dismissing a direct appeal from an order disqualifying the appellant's attorney because such an order is interlocutory and appellant failed to follow the required procedure for bringing an interlocutory appeal); Lassiter Properties, 230 Ga.App. at 216–217, 495 S.E.2d 663 (adopting the holding in Ewing ).

Settendown and Butler, however, argue that at least one Georgia Supreme Court case, decided the same term as Cherry, supports the conclusion that an order disqualifying counsel is directly appealable. In Stevens v. Thomas, 257 Ga. 645, 361 S.E.2d 800 (1987), a unanimous Georgia Supreme Court refused to address the appeal of an order disqualifying counsel, which was brought as part of an appeal challenging the award of sanctions and attorney fees against the defendants. One of the sanctions imposed by the trial court was the disqualification of the defendants' attorney who, together with his clients, had violated a court order to refrain from contacting potential class members. The Georgia Supreme Court found that the appeals of the disqualification order brought by the attorney and his clients were not timely because “[t]he disqualification was to take place instanter and was thus immediately appealable. The fact that the amount of attorney fees was not set until a later date does not affect the status of the disqualification as a final, appealable order.” Stevens, 257 Ga. at 647(1), 361 S.E.2d 800.

As we explained in Lassiter Properties, however, we decline to read this statement, which was unsupported by any citation to legal authority or any legal analysis and which failed to acknowledge the court's earlier decision in Cherry, as providing us with a basis for revisiting the question of whether disqualification orders are directly appealable. Rather, we view this issue as being “controlled by Cherry v. Coast House, Ltd., ․ which appears to be the latest definitive statement by the [Georgia] Supreme Court on the issue.” Lassiter Properties, 230 Ga.App. at 218, 495 S.E.2d 663.3

As we are holding that disqualification orders are interlocutory and because the procedures for appealing such an order were not followed, the only way we could acquire jurisdiction over this appeal would be if disqualification orders were considered collateral orders.

The United States Supreme Court has long recognized the collateral order doctrine as an exception to the final judgment rule,4 see Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 546–547, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949), and the Georgia Supreme Court adopted the collateral order doctrine in 1982. See Scroggins v. Edmondson, 250 Ga. 430, 431–432(1)(c), 297 S.E.2d 469 (1982); Patterson v. State, 248 Ga. 875, 287 S.E.2d 7 (1982). To be directly appealable under the collateral order doctrine, an order must “completely and conclusively decide[ ] the issue on appeal such that nothing in the underlying action can affect it; ․ resolve[ ] an issue that is substantially separate from the basic issues in the complaint; and [be] effectively unreviewable on appeal [from a final judgment].” Murphy v. Murphy, ––– Ga.App. ––––, 747 S.E.2d 21 (2013) (whole court). See also Coopers & Lybrand v. Livesay, 437 U.S. 463, 468–469(I), 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978) (denial of class certification does not constitute a collateral order because such an order is subject to revision in the district court, involves considerations that are enmeshed in the factual and legal issues of the plaintiff's case, and is subject to effective review after final judgment at the behest of the named plaintiff or intervening class members); Britt v. State, 282 Ga. 746, 748(1), 653 S.E.2d 713 (2007) (order granting a motion to compel documents related to the funding of Georgia's indigent defense system was a collateral order as it was completely unrelated to the defendant's guilt or innocence, the appeal would conclusively resolve the discovery issue, and “the important rights of a number of indigent capital defendants would be compromised if [they] had to await final judgment before seeking review of the discovery order”). We find that disqualification orders do not constitute collateral orders because, despite Settendown's and Butler's arguments to the contrary, such orders may be effectively reviewed on appeal from a final judgment.

In determining whether a matter is subject to effective appellate review, we ask whether the relief sought would be barred by the entry of final judgment in the trial court. Murphy, ––– Ga.App. at –––– (holding that denials of a motion to recuse the trial judge are not collateral orders “because the parties' interests can be protected adequately in an appeal from a final judgment”). The fact that a ruling “may burden litigants in ways that are only imperfectly reparable by appellate reversal of a final [trial] court judgment” is not sufficient to satisfy the requirement that an order be effectively unreviewable. Digital Equip. Corp. v. Desktop Direct, 511 U.S. 863, 871–872(II)(D), 114 S.Ct. 1992, 128 L.Ed.2d 842 (1994) See also Richardson–Merrell, 472 U.S. at 430–431(II) (“[t]he collateral order doctrine is a narrow exception whose reach is limited to trial court orders affecting rights that will be irretrievably lost in the absence of an immediate appeal”) (citations and punctuation omitted, emphasis supplied). Where effective relief would be available on appeal from a final judgment, therefore, Georgia's appellate courts have “ ‘routinely require[d] litigants to wait until after final judgment to vindicate’ “ even those rights that are “ ‘central to our adversarial system.’ “ Expedia v. City of Columbus, 305 Ga.App. 450, 453(1), 699 S.E.2d 600 (2010) (holding that orders adverse to claims of privilege, including the attorney-client privilege, are subject to effective appellate review and are therefore not collateral orders), quoting Mohawk Indus. v. Carpenter, 558 U.S. 100, 108–109(II)(B), 130 S.Ct. 599, 175 L.Ed.2d 458 (2009). See also General Motors Corp. v. Hammock, 255 Ga.App. 131, 131–132,, 564 S.E.2d 536 (2002) (orders compelling discovery are not collateral orders).

Further, in Richardson–Merrell, the United States Supreme Court acknowledged “that an order disqualifying counsel may impose significant hardship on litigants,” and noted that, “[p]articularly where the grounds for disqualification are troubling, this hardship may tempt courts of appeals to assert jurisdiction pursuant to” the collateral order doctrine. 472 U.S. at 440(IV). The Court then stated that appellate courts should avoid this temptation, explaining:

It would seem to us to be a disservice to the Court, to litigants in general and to the idea of speedy justice if we were to succumb to enticing suggestions to abandon the deeply-held distaste for piecemeal litigation in every instance of temptation. Moreover, to find appealability in those close cases where the merits of the dispute may attract the deep interest of the court would lead, eventually, to a lack of principled adjudication or perhaps the ultimate devitalization of the finality rule as enacted by Congress. [Accordingly], we decline to transform the limited exception carved out in Cohen into a license for broad disregard of the final[ ] [judgment] rule․We hold that orders disqualifying counsel in civil cases, like orders disqualifying counsel in criminal cases and orders denying a motion to disqualify in civil cases, are not collateral orders subject to appeal as “final judgments” [pursuant to the collateral order doctrine].

(Citations and punctuation omitted.) Id.

We need not succumb to such temptation in this case. Even in the absence of an interlocutory appeal, relief from an erroneous disqualification order is available on appeal from a final judgment. Specifically, such an error may serve as the basis for a new trial motion. See Firestone Tire & Rubber Co., 449 U.S. at 378(II) (a trial court's erroneous ruling on a motion to disqualify counsel can be remedied on appeal by “vacat[ing] the judgment appealed from and order[ing] a new trial”); Fidelity Nat'l Title Ins. Co. of New York v. Intercounty Nat'l Title Ins. Co., 310 F.3d 537, 539 (7th Cir.2002) (“incorrect decisions about disqualification may justify reversal at the end of the case”). See also, Murphy, ––– Ga.App. at –––– (noting that the remedy for the erroneous denial of a motion to recuse the trial judge is the grant of a new trial); Expedia., 305 Ga.App. at 453(1), 699 S.E.2d 600 (an order erroneously requiring the improper disclosure of privileged material may be remedied by the appellate courts “by vacating an adverse judgment and remanding for a new trial in which the protected material and its fruits are excluded from evidence”) (citation and punctuation omitted). Accordingly, like the majority of courts to address this issue, including the United States Supreme Court, we hold that because orders granting or denying a motion to disqualify counsel are fully reviewable on appeal from a final judgment, the collateral order doctrine does not apply.5 See Richardson–Merrell, 472 U.S. at 440(IV) (orders granting a disqualification order are not appealable under the collateral order doctrine); Firestone Tire & Rubber Co., 449 U.S. at 377(II) (“[a]n order refusing to disqualify counsel plainly falls within the large class of orders that are indeed reviewable on appeal after final judgment, and not within the much smaller class of those that are not”); Fiber Materials v. Subilia, 974 A.2d 918, 927(II)(A)(2) (Me., 2009) (because disqualification orders are subject to effective appellate review they are not collateral orders); Flores Rentals v. Flores, 283 Kan. 476, 491, 153 P.3d 523 (2007) (disqualification orders are interlocutory, rather than collateral); Vaccone v. Syken, 587 Pa. 380, 386, 899 A.2d 1103 (“orders disqualifying counsel in civil cases are not collateral orders subject to appeal”) (2006); Acierno v. Hayward, 859 A.2d 617, 620 (Del., 2004) (same); Travco Hotels v. Piedmont Natural Gas Co., 332 N.C. 288, 291, 420 S.E.2d 426 (same) (1992). But see PCG Trading v. Seyfarth Shaw, 460 Mass. 265, 269(1), note 6, 951 N.E.2d 315 (2011) (under Massachusetts law “[a]n order granting a motion to disqualify counsel has traditionally been held to be a final judgment and therefore immediately appealable under the collateral order doctrine”); Jacob North Printing Co. v. Mosley, 279 Neb. 585, 587–588, 779 N.W.2d 596 (2010) (under Nebraska law, orders disqualifying attorneys are considered collateral orders and are directly appealable).

Because the disqualification order at issue is interlocutory, and not collateral, it is not within “this Court's discretion to consider the disqualification of [Butler] by direct appeal at this time.” Lassiter Properties, 230 Ga.App. at 218, 495 S.E.2d 663. The appeals in Case No. A13A0830 and Case No. A13A0831 are therefore dismissed as premature. Id. Settendown's and Butler's recent motions to stay a decision in these appeals are hereby denied as moot.

Appeals dismissed in Case No. A13A0830 and Case No. A13A0831.

BRANCH, Judge.

PHIPPS, C.J., and ELLINGTON, P.J., concur.