SMITH, Presiding Judge.
Mary Helen Moses appeals from the trial court's order granting summary judgment in favor of her former partner, Randall Jordan, on her counterclaim against him for wrongful dissolution of their law partnership. She asserts the trial court erred in (1) granting summary judgment on the wrongful dissolution claim, (2) granting Jordan's motion for judgment on the pleadings with regard to the dissolution date of the partnership, (3) granting a protective order to Jordan with regard to her requests for admission, and (4) ordering her to file personal property with the clerk of the court and subsequently providing it to Jordan. For the reasons set forth below, we find merit in all of these claims and reverse.
Summary judgment is only proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. OCGA § 9-11-56(c). "A de novo standard of review applies to an appeal from a grant of summary judgment, and we view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant." Matjoulis v. Integon Gen. Ins. Corp., 226 Ga.App. 459(1), 486 S.E.2d 684 (1997).
So viewed, the record shows that in 2000, Moses began practicing law as a contract attorney for Jordan's law firm, Jordan & Bristol ("J & B") in Brunswick, Georgia. The majority of Moses's work involved the "preparation of motions and briefs at the trial and appellate level."
After Steven Bristol left the partnership in December 2002, Jordan and Moses formed a new partnership, Jordan and Moses, effective January 1, 2003. At the outset, Jordan was the rainmaker and trial lawyer, and Moses was the writer, manager, and business person. In 2004, Moses started traveling more and the day-to-day management of the law firm was delegated to two associate attorneys.
In the spring of 2006, Jordan first started thinking about ending his partnership with Moses based upon his assertion that she spent too much time in the office talking about her personal problems. In the summer of 2006, Jordan "concluded that [Moses]'s behavior in the workplace had become so divisive, unprofessional and inappropriate that [his] law practice was suffering." In August, he asked two associate attorneys and the office manager to prepare memos outlining their experiences with Moses to assist him as he "considered whether to continue to practice law with [Moses]." Moses was not aware that Jordan asked the employees for these memos.
Based on her awareness that there were management issues in the office, Moses sent
On Sunday, August 27, 2006, Jordan left a letter in Moses's office chair before leaving town that "purported to dissolve the partnership effective August 31, 2006." The following day, Moses sent an e-mail to Jordan informing him that she "did not agree to dissolve the partnership effective August 31, 2006," that she wanted to resolve the partnership "appropriately," and stated her "intention to continue to represent the firm's clients." Based upon a subsequent conversation between Moses's attorney and Jordan, Moses understood that Jordan had "agreed to maintain the status quo at the law firm" until the partnership matters were resolved. Her attorney subsequently received letters from Jordan's attorney declaring the firm dissolved no later than September 26, 2006.
Moses learned in early October that Jordan had informed the firm's three railroad clients that the firm had dissolved. In December 2006, Moses learned that Jordan had sent out a letter announcing the formation of The Jordan Firm.
In January 2007, Jordan filed a motion for declaratory judgment in superior court asking for a declaration that the law partnership "was legally dissolved by action of the Plaintiff on September 26, 2006" and that Moses was "owed no further monies from assets of the partnership as a result of the dissolution ... and that ... [Moses] be required to account for any excess monies that may have been paid to her by the firm." Moses answered and asserted counterclaims for breach of the partnership agreement, wrongful dissolution of the partnership, breach of fiduciary duty, conversion, tortious interference with contract and business relationships, defamation and disparagement, recoupment, trespass, constructive eviction, punitive damages, and attorney fees and costs of litigation under OCGA § 13-6-11.
Following discovery, Jordan moved for summary judgment on Moses's wrongful dissolution counterclaim, which the trial court granted. The trial court also granted Jordan a protective order with regard to requests for admission served by Moses. Additionally, the trial court ordered Moses, sua sponte, to turn over to the clerk of court a portable hard drive acquired by Moses before Jordan filed suit against her.
1. Moses asserts the trial court erred by granting Jordan's motion for summary judgment on her counterclaim for wrongful dissolution of the partnership. Because Moses has raised genuine issues of fact with regard to this claim, we agree.
The Uniform Partnership Act, OCGA § 14-8-1 et seq., provides that the dissolution of a partnership can occur in a variety of ways, including "[b]y the express will or withdrawal of any partner." OCGA § 14-8-31(a)(2). "Upon dissolution of a partnership the partners cease to be associated in the carrying on of the partnership. The partnership shall continue until termination pursuant to Code Section 14-8-30 and until termination the partners shall be associated in the winding up of the partnership." OCGA § 14-8-29. Finally, "[o]n dissolution the partnership is not terminated, but continues until the winding up of the partnership affairs is completed." OCGA § 14-8-30. The Act also provides the following remedy for wrongful dissolution:
OCGA § 14-8-38(b)(1)(B).
There are few Georgia cases addressing the scope of a partner's cause of action for wrongful dissolution under the Uniform Partnership Act. In the seminal case, this court followed the reasoning of the California Supreme Court and held:
(Punctuation omitted.) Arford v. Blalock, 199 Ga.App. 434, 437-438(6), 405 S.E.2d 698 (1991), citing Page v. Page, 55 Cal.2d 192, 196-198, 10 Cal.Rptr. 643, 359 P.2d 41 (1961).
In Wilensky v. Blalock, 262 Ga. 95, 414 S.E.2d 1 (1992), the Georgia Supreme Court endorsed "the reasoning of the [Georgia] Court of Appeals," in Arford, supra, and affirmed. Id. at 98-99(3), 414 S.E.2d 1. It held that a viable claim for wrongful dissolution of the partnership existed based upon a partner's conduct in physically excluding a partner "from the partnership's place of business" and keeping "for himself all the partnership's material assets and continuing income from its mortgage origination business." Id. At the time of the wrongful dissolution, the partners in Arford had been in negotiations to dissolve the partnership, which included "discussing the amount it would take for one of them to buy out the other's interest in the partnership." Id. at 96-97, 414 S.E.2d 1.
More recently, this court affirmed a trial court's award of damages for wrongful dissolution of a partnership when a former partner in a check-cashing business closed the business while his partner was traveling, sent a letter terminating the business, occupied a new space near the old business, actively solicited customers away from his former partner, appropriated profits to his own use, and failed to compensate his former partner in any way. Asgharneya v. Hadavi, 298 Ga.App. 693, 697-698, 680 S.E.2d 866 (2009).
Based on these decisions, Moses argues she can avoid summary judgment on her wrongful dissolution claim if she can demonstrate that genuine issues of fact exist as to whether Jordan "froze [her] out" and appropriated the business to his own use or dissolved the partnership to gain the benefits of the business for himself without compensating her for a prospective business opportunity. Moses overlooks another crucial element of a wrongful dissolution claim: the partner's decision to dissolve must be wrongful. Stated differently, the power to dissolve "must be exercised in good faith." Arford, supra, 199 Ga.App. at 438, 405 S.E.2d 698. Compare Chaney v. Burdett, 274 Ga. 805, 807(2), 560 S.E.2d 21 (2002) (partner's general duty to act in utmost good faith "continues until the affairs of the partnership are wound up" and a breach of this duty after dissolution can give rise to a claim for breach of fiduciary duty).
With regard to Jordan's state of mind at the time he decided to dissolve the partnership,
In his deposition, Jordan testified that Moses knew that he would deposit the check into the firm's bank account and that they had an agreement that he would keep the entire fee.
Moses averred in her affidavit:
Although Moses was aware that the case had settled in late 2005, she stated:
Moses also produced a copy of a partnership agreement signed by Jordan that required him to share the net profits of the firm with her equally.
Based upon Moses's evidence that Jordan secretly kept the proceeds of this check for himself in March 2006 and his testimony that he first contemplated dissolving the firm in the spring of 2006, we find that Moses has presented at least one genuine issue of material fact with regard to her wrongful dissolution claim.
2. Moses contends the trial court erred by determining as a matter of law based upon the parties' pleadings alone that the partnership "was lawfully dissolved in September 2006." We agree.
The record shows that Moses moved for partial judgment on the pleadings with regard to her claim that Jordan breached the express terms of the partnership agreement by unilaterally dissolving it in September 2006. Jordan filed a cross-motion to dismiss asking the court to find as a matter of law that the partnership "was legally dissolved by action of the Plaintiff on September 26, 2006." Jordan filed a second motion to dismiss regarding Moses's counterclaim for tortious interference with contract and business relationships.
On December 16, 2008, the trial court issued a written order denying Moses's motion for partial judgment on the pleadings, and granting Jordan's motion to dismiss Moses's counterclaim in tort. The trial court's order does not reference Jordan's separate motion for judgment on the pleadings with regard to the date the partnership was dissolved.
On January 7, 2009, the trial court noted in a discovery order that "since the Court has found that the partnership was lawfully dissolved in September 2006, each party shall disclose to the other the gross revenues for their respective practices for 2007." (Emphasis supplied.) Moses contends that the trial court erred by making this finding for the first time in a discovery order, particularly since there was a dispute in the pleadings with regard to the dissolution date of the partnership. The record shows that at the time of the trial court's discovery ruling, the parties had not yet submitted any evidence
The record shows that Jordan's complaint for declaratory judgment against Moses asserts that he notified her on August 27, 2006, that he intended to dissolve their law partnership. According to Jordan's complaint, "the partnership remained in operation until September 26, 2006, when it was finally dissolved by [Jordan]." In her verified answer, Moses denied that the partnership was dissolved on September 26, 2006. In her counterclaim, she asserted that the partnership billed clients for work performed by her in September 2006 and that she took her last partnership draw in October 2006.
It appears that at the time of its ruling on the motion for protective order, the trial court believed it had resolved Jordan's pending motion for judgment on the pleadings with regard to the lawful dissolution of the partnership in September 2006 in Jordan's favor. Based upon the record before us, however, the protective order contains the trial court's only ruling on the issue, and we will construe it as the grant of Jordan's motion for judgment on the pleadings.
"[A] motion for judgment on the pleadings should be granted only where the pleadings disclose with certainty that the plaintiff would not be entitled to relief under any state of provable facts." (Citations and punctuation omitted.) Kelley Mfg. Co. v. Martin, 296 Ga.App. 236, 237, 674 S.E.2d 92 (2009). In this case, the pleadings demonstrate disputed facts with regard to the operative date of the partnership's dissolution. Consequently, the trial court erred by granting Jordan's motion based solely upon the pleadings before it. Wright v. Swint, 224 Ga.App. 417, 418-419(1), 480 S.E.2d 878 (1997) (reversing trial court's grant of motion to dismiss because trial court improperly decided issue of fact).
3. In an apparently related—although confusing—claim of error, Moses asserts the trial court erred by concluding as a matter of law that "the mutual consent provision in the partnership agreement violated public policy." Moses apparently takes issue with one statement made in the trial court's order denying her motion for judgment on the pleadings with regard to her claim that Jordan breached the partnership agreement. She does not assert in her enumeration of error, however, that the trial court erred in denying her motion for judgment on the pleadings. Instead, she asserts the trial court erred by using its public policy finding to conclude that Jordan lawfully dissolved the partnership on September 26, 2006. Based upon our holding in Division 2, the specific error asserted here is moot.
4. Moses asserts the trial court erred by granting Jordan's request for a protective order with regard to her second request for admissions.
(Citation and punctuation omitted.) DeLoitte Haskins & Sells v. Green, 187 Ga.App. 376, 379(2), 370 S.E.2d 194 (1988).
The record shows that Moses served a second request for admissions asking Jordan to admit that 327 specific credit card charges spanning a three-year period were not ordinary and necessary business expenses, that 58 expert witness invoices for services performed before the formation of the partnership were improperly paid from partnership funds, that the partnership made payments on three personal loans taken out by Jordan before the formation of the partnership, that nine specific personal expenses were paid out of partnership funds, and that Jordan or his
Jordan moved for a protective order on the grounds that the
In his supporting brief, Jordan argued with regard to the credit card charges that "Defendant has used no discretion in making the requests and instead included numerous charges that were for obvious ordinary and necessary business expenses...." He asserted that the remaining requests "demonstrate bad faith on the part of the defendant" because she was "fully aware that all expert witness fees were properly paid ..., that the lines of credits were utilized for ... firm business, and that the [alleged personal expenses] were routinely paid out of [partnership] funds." After reviewing the first 30 requests to admit with regard to the credit card charges, Jordan determined that 28 were legitimate expenses and two were for alleged charges for which he could not find any documentation. Based on his review of the first 30 requests, Jordan asserted that Moses could not have made the numerous requests in good faith. Jordan supported the claims made in his brief with an affidavit.
In an affidavit filed in opposition to Jordan's motion for protective order, Moses averred: "I took each American Express bill and examined it carefully and only included those charges which I found suspicious." Examples provided by Moses include "charges of over $11,000 from a Ritz Carlton hotel in Jamaica for lodging December 22-29, 2004, [and] a charge of $361.34 from Bennie's Red Barn, a local restaurant, on New Year's Eve...." She explained that she requested more information about these and other charges because "they appeared to be holiday entertainment for Mr. Jordan's family and friends" or because it seemed unlikely that Jordan would be in the location for business or would be billing a client to spend the night in a hotel close to his home. Based on her review of one monthly bill, she believed that her requests accounted for "less than 10% of the total number of charges on the firm's credit card statements." She sought the information in the request to determine whether she received all the proceeds from the firm to which she was entitled and whether she should be liable for the firm's debts as alleged in Jordan's complaint.
During the hearing on the motion for protective order, Moses's counsel pointed out that because Jordan sought a ruling from the court that Moses was owed nothing further from the partnership, Moses was entitled to serve requests for admissions to show that Jordan used the
Jordan's attorney countered that the number of requests standing alone "show a burden."
After taking the matter under advisement, the trial court issued a written order concluding that "Defendant's massive request for admissions is burdensome and oppressive, and Plaintiff's request for a protective order with respect to them is granted. Defendant is entitled to depose Plaintiff to explore his knowledge of the matters raised in the requests." The trial court made no finding, however, with regard to whether Moses asserted the requests in bad faith or for the purpose of harassment.
While it is true that a trial court has broad discretion with regard to entering
(Citations, punctuation and footnote omitted.) Id. at 738-739(1), 538 S.E.2d 82. Requests for admission, in particular, are designed "with a view toward establishing uncontested facts that go to the merits of the case." (Citation and punctuation omitted.) Mote v. Tomlin, 136 Ga.App. 616, 617(1), 222 S.E.2d 57 (1975). In addition, it is well-settled that
(Citations and punctuation omitted.) Osborne v. Bank of Delight, 173 Ga.App. 322, 324(2), 326 S.E.2d 523 (1985).
In this case, the trial court issued the protective order because the requests to admit were "burdensome and oppressive" based upon the sheer number standing alone.
5. Moses contends the trial court erred in confiscating from her possession her only portable hard drive copy of the law firm's server and giving it to Jordan. The record shows without dispute that Moses obtained the portable hard drive months before Jordan filed his lawsuit against her. The trial court ordered her to file it with the clerk sua sponte in response to Jordan's motion for a more limited protective order.
The trial court's authority with regard to protective orders under OCGA § 9-11-26(c) is limited to rulings in discovery matters and in response to motions to compel. A trial court may under the discovery rules order a party to "produce and permit [a] party ... to inspect and copy, test or
In this case, the trial court abused its discretion by utilizing a discovery order to force Moses to turn over personal property in her possession, particularly in light of the trial court's subsequent determination that there was no evidence that it had been "obtained by [Moses] in bad faith."
Judgment reversed.
DILLARD and McFADDEN, JJ., concur.