Georgia Appeals Court Extends Judgmental Immunity, Protects Settlements

One noticeable trend in legal malpractice cases is unsatisfied clients suing their own attorneys over settlements in civil litigation.  This type of claim is more likely when part of the settlement includes the promise of future payments.  The risk of non-payment alone increases the risk of an unhappy, unpaid client.  This risk naturally increases when the economy sours after the settlement agreement.

A “negligent settlement” case was recently decided in the favor of the attorney as a matter of law by the Georgia Court of Appeals.  In Mosera v. Davis, the client sued his litigation counsel in an odd case of deja vu.  Mosera earned a large settlement arising out of a business lawsuit.  He then loaned money to a client of his litigation attorney (and someone with whom Mosera had already done business) for a real estate development.  His loan was not properly secured:  the note was made to an entity that did not own the property and the deed to secure debt was not filed.  Mosera then hired new counsel to bring suit against multiple entities involved in the development loan.  After a few months, the parties engaged in a multiparty, detailed settlement that included up front payments, payments over time based upon the development of the same real estate project, and security in the form of an unfiled deed to secure debt.  Within a year, the settling parties defaulted.  Dissatisfied over the settlement, Mosera sued the attorneys that helped him get the settlement.

The trial court granted summary judgment on multiple issues, including proximate cause (Mosera could not prove the case within the case or that he would have collected had he won) and judgmental immunity.  On appeal, the Court of Appeals relied upon judgmental immunity to affirm.

Under Georgia law, if the doctrine of judgmental immunity applies, there can be no liability for acts and omissions by an attorney in the conduct of litigation which are based on an honest exercise of professional judgment.  As described, judgmental immunity is easily applied to trial decisions, e.g., whether to call a specific witness, but it is not limited to such applications.  For example, one prior case in Georgia, Hudson v. Windholz, 202 Ga.App. 882, 416 S.E.2d 120 (1992),  had applied judgmental immunity in a settlement context. 

The holding in Mosera is significant.   Based on the evidence, Mosera’s attorney recommended the settlement because, while imperfect, it was the best deal that the defendants were going to offer.  Despite Mosera’s claims that he did not understand some of the risks of the settlement, the evidence showed that Mosera had received advice about the issues he claimed to not understand.  Because his attorneys had properly advised him of those risks, their judgment and advice about the benefits of the settlement entitled them to summary judgment.

Mosera pursued settlement with defendants and knew that they would settle only if he released the lis pendens and agreed to file the Deed to Secure Debt only if they defaulted under the Settlement Agreement. The evidence reflects that appellees advised Mosera of the consequences of failing to file a deed to secure debt; that Mosera understood the risks involved; and that this was the best deal appellees could obtain for him, given defendants’ demands and Mosera’s desire to settle. In light of this evidence, and in light of the fact that there is no evidence that defendants would have agreed to terms more favorable for Mosera, we conclude that appellees exercised their best, informed judgment given the circumstances. Accordingly, we affirm the trial court’s ruling granting summary judgment to appellees.

The holding in Mosera makes the application of judgmental immunity to “negligent settlement” cases a little easier and supports generally the strong public policy in favor of the finality of settlements.  Given the trend in some states to liberally allow “negligent settlement” cases to proceed, Georgia remains a state that stands behind its public policy in favor of settling litigation.  

(The attorney defendants in Mosera v. Davis, 2010 Fulton County D. Rep. 3228 (Ga. Ct. App. Sept. 28, 2010), were represented by Kim M. Jackson of Hawkins, Parnell, Thackton & Young, LLP)

1 Response to “Georgia Appeals Court Extends Judgmental Immunity, Protects Settlements”

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