Atlanta Business Attorney Blog

Now that the basic litigation terms have been defined, how does the process actually work in the business litigation context? One of the most commonly litigated issues is breach of contract. Here is an example of how the process would unfold.

First, the parties must enter into a contract.

Johnny and Penny have three small children and recently realized that they have outgrown their current residence. In order to purchase a larger home, they would first need to sell their current house. Unfortunately, in the current housing climate, they fear their house would sell for less than it is worth so they decide to finish their basement instead of purchasing a new home.

Johnny and Penny start interviewing contractors for the job. A+ Home Solutions puts in a bid, or an offer, to do the job for $30,000.00. Johnny and Penny submit a counteroffer, asking that A+ Home Solutions do the work for $25,000.00. The $25,000.00 counteroffer acts as a rejection of A+ Home Solutions’ initial offer. A+ Home Solutions accepts Johnny and Penny’s offer. Johnny and Penny wisely consult with their attorney who drafts a written contract for the project outlining each party’s responsibilities and duties. All of the parties sign the contract. In consideration for agreeing to finish the basement, Johnny and Penny gave A+ Home Solutions $5,000.00 to begin the work.

Continue reading "Georgia Business Litigation Terms - Example of use of terms" »

Georgia Business Litigation: Definitions of Common Terms associated with Business Law and Litigation:

Affirmative Defenses: The defendants defenses to the allegations in the complaint included in the defendant’s Answer filed with the court.

Answer: A document used to respond to the complaint or petition. Answers usually admit or deny specific allegations or claims in the document being answered. Also called a response.

Appeal: A procedure to ask a higher court to review the ruling of a lower court.

Cause of Action: Failure to perform a legal obligation to do, or refrain from doing, some act that gives rise to liability for which a plaintiff seeks a legal remedy. Also called a claim.

Complaint: The document filed by the plaintiff that initiates a lawsuit. The complaint provides information regarding what harm the plaintiff is alleging and what relief the plaintiff is seeking.

Counterclaim: The claim asserted by the defendant against the plaintiff after the plaintiff files the initial lawsuit, or complaint, against the defendant. The counterclaim is asserted in the same lawsuit and is often filed with the defendant’s answer to the complaint.

Cross-Claim: In a lawsuit where there are multiple defendants, a claim or cause of action filed by one defendant against another defendant.

Continue reading "Georgia Business Litigation & Law - Part I: Pleadings & Related Litigation Terms" »

A Georgia court must have power to rule over both parties in order for a lawsuit to be properly filed in Georgia. This concept is known as jurisdiction under the law. If a Georgia court does not have jurisdiction over both parties, then the defendant, the party against whom a lawsuit is filed, may have grounds to file a motion to dismiss the case.

O.C.G.A. § 9-10-91, commonly known as the Georgia Long Arm Statute, defines when a lawsuit may be filed against a business not located in Georgia. The statute provides a list of conditions, one of which must be met, in order to file a lawsuit in Georgia against a nonresident defendant. The statute sets forth the following grounds:

(1) If the defendant transacts business in Georgia;
(2) If the defendant “commits a tortious act or omission” in Georgia;
(3) If the defendant “commits a tortious injury” in Georgia that was caused by an act in another state if the defendant “regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered in this state”; or
(4) If the defendant “owns, uses, or possesses any real property situated within this state.”

Continue reading "How to sue a Business that is Not Located in Georgia: The Long Arm Statute" »

Many people establish corporations in Georgia and other states to reduce their personal liability. With all of the benefits afforded to corporations, there are also some burdens, especially in the legal realm. One such burden is the requirement that an attorney represent a corporation in court. This constraint is discussed and explained in the 1997 Georgia Supreme Court case Eckles d/b/a Atlanta Technology Group v. Atlanta Technology Group, Inc., 267 Ga. 801 (1997). (The Court does specify that this principle does not apply to all non-corporate business owners.) In the Eckles case, a corporation was represented in the lawsuit by one if its corporate officers who was not licensed to practice law.

A corporation, though considered to be a person under Georgia law, can only act through its agents, while a natural person can represent himself in court. A person representing a corporation in a Georgia court is clearly acting in a representative legal capacity, which worried the Georgia Supreme Court: “The qualifications of the individual "representing a corporation ... in court is one of vital judicial concern. Such person is clearly engaged in the practice of law in a representative capacity. Thus, it is clear that permitting a corporation to be represented by a layman in a court of record would constitute a major exception to the requirement that a legal representative be a licensed attorney who is subject to the authority of the courts of which he or she is an officer. Indeed, there appears to be no reason why the prohibition against legal representation by a layman in a court of record should not apply when the party represented is a corporation rather than a natural person.”

The Court also remained aware of its role as the governing body for the practice of law in Georgia, and rejected creating an exception to its rule that only a lawyer could represent another person in a court proceeding. This is because the practice law is a privilege and not an absolute right, which results in the responsibilities lawyers owe not only their clients, but also the courts. “To allow a corporation to maintain litigation and appear in court represented by corporate officers or agents only would lay open the gates to the practice of law for entry to those corporate officers or agents who have not been qualified to practice law and who are not amenable to the general discipline of the court.”

Disputes inevitably arise in the course of business relationships, which sometimes result in lawsuits being filed. We routinely receive calls from Georgia businesses looking for guidance on what actions to take once they have been served with a lawsuit that was filed by an opposing party, who is typically called a Plaintiff. Below are some general tips and guidelines that all such businesses should consider:

1) Deadlines are extremely important: The party that has been sued, commonly referred to as the Defendant, will be served with a Complaint which contains the facts and allegations that form the basis of the lawsuit. Once a Georgia business has been served with a lawsuit, it is important to keep timeframes in mind. Generally, the Defendant has 30 days to file an Answer to the Complaint from the date when the Defendant actually received the Complaint. This deadline can be shorter depending on the court involved or the type of lawsuit that was filed. The Complaint will be accompanied by a Summons form, which should directly specify the number of days that the Defendant has to file an Answer. Though the Answer is typically the first deadline that a Defendant should be concerned about, there are also additional deadlines in the legal process.

2) Consult an attorney: Even if you plan to represent your Georgia corporation in a lawsuit, it is advisable to at least have an initial meeting with an attorney to discuss procedural issues and how to best represent your business. Also you need to determine if you can even legally represent your business as some courts in Georgia require a business to be represented by legal counsel. If your business falls into this category and you do not seek representation, the Plaintiff can seek immediate judgment against your business, which the court will likely grant.

Continue reading "My Georgia business was sued in Atlanta. What should I do?" »

The Georgia Court of Appeals recently upheld a trial court ruling in the case of Wilks v. Overall Constr. Inc. that the 6 year statute of limitations from O.C.G.A. §9-3-24 applies for lawsuits to be filed in simple construction contract cases. This case makes two extremely important points: (1) people must abide by the time limits contained in the Official Code of Georgia if they want to ensure that their disputes will be heard; and (2) if you suspect something was constructed incorrectly, do NOT wait until you notice problems to have it inspected.

In this case, a homeowner hired a contractor to perform some construction on his home. This work was governed by a written contract signed by the parties. The work was completed on or about July 23, 1999, at which time the homeowner paid the contractor. Within a year, the homeowner began noticing problems, and over the course of the next 5 years, the contractor returned to perform repair work. Even after all of the repairs, the homeowner still noticed construction problems, and finally hired an engineer to inspect the construction in June 2007. The inspection revealed that there were deficiencies in the construction and the materials used, which prompted the homeowner to file suit in July 2007 for breach of contract – almost 8 years after the work was initially completed! Unfortunately for the home owner, he had waited too long to bring suit under the applicable statute of limitations, which resulted in dismissal of his lawsuit.

The important lesson to take from this case is that if you file suit for breach of a simple construction contract, you MUST make sure to do so within 6 years after work was substantially completed. Do NOT simply allow a contractor to make repairs, as the statute of limitations will not be adjusted to run from the most recent repair date. If only the homeowner in the Wilks case had ordered the inspection earlier, he could have filed suit prior to July 2005, thus ensuring that his case was heard.

When it comes time for a person to file a lawsuit in Georgia, there are many different courts to choose from. It is often confusing for a non-lawyer to determine which court is the proper one for his dispute. This blog will hopefully shed some light on the appropriate trial court in which to pursue disputes. However, this is by no means a comprehensive list. Make sure to contact an experienced business attorney for further guidance on choice of forum.

Superior Court: This court has exclusive jurisdiction to hear all civil business disputes concerning any amount of money between citizens of Georgia (1) where the party filing suit wants to force another party to act (affirmative equitable relief) and (2) where parties seek a determination as to ownership of land. Aside from these cases, superior courts can hear almost any other civil case, except those with certain specialized subject matter.

State Court: This court can hear almost all civil business cases between citizens of Georgia with the exception of cases where the superior court has exclusive jurisdiction or cases concerning specialized subject matter.

Continue reading "Courts in Georgia: Magistrate Court, State Court, Superior Court, Court of Appeals, Supreme Court, Federal District Court, Federal Appeals Court" »

The Georgia Court of Appeals recently upheld a trial court ruling in the case of Wilks v. Overall Constr. Inc. that the 6 year statute of limitations from O.C.G.A. §9-3-24 applies for lawsuits to be filed in simple construction contract cases. This case makes two extremely important points: (1) people must abide by the time limits contained in the Official Code of Georgia if they want to ensure that their disputes will be heard; and (2) if you suspect something was constructed incorrectly, do NOT wait until you notice problems to have it inspected.

In this case, a homeowner hired a contractor to perform some construction on his home. This work was governed by a written contract signed by the parties. The work was completed on or about July 23, 1999, at which time the homeowner paid the contractor. Within a year, the homeowner began noticing problems, and over the course of the next 5 years, the contractor returned to perform repair work. Even after all of the repairs, the homeowner still noticed construction problems, and finally hired an engineer to inspect the construction in June 2007. The inspection revealed that there were deficiencies in the construction and the materials used, which prompted the homeowner to file suit in July 2007 for breach of contract – almost 8 years after the work was initially completed! Unfortunately for the home owner, he had waited too long to bring suit under the applicable statute of limitations, which resulted in dismissal of his lawsuit.

The important lesson to take from this case is that if you file suit for breach of a simple construction contract, you MUST make sure to do so within 6 years after work was substantially completed. Do NOT simply allow a contractor to make repairs, as the statute of limitations will not be adjusted to run from the most recent repair date. If only the homeowner in the Wilks case had ordered the inspection earlier, he could have filed suit prior to July 2005, thus ensuring that his case was heard.