WHEATLEY v. MOE'S SOUTHWEST GRILL, LLC (N.D.Ga. 9-30-2008)

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Docket Number

Civil Action No. 1:05-cv-2174-TCB.

Motions

Motion for attorney fees : Denied

Attorney(S)

Guy H. Weiss, Jonathan Riley Granade, Robert Edward Casey, Jr., Casey Gilson Leibel, Atlanta, GA, for Plaintiff. David Roland Hughes, Davis, Pickren, Seydel, Atlanta, GA, for Defendants.

Judges

Timothy C. Batten

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Smart Summary

Factual and Procedural Background

Anne Wheatley, the Plaintiff, was employed part-time beginning July 2003 as an administrative assistant to a company vice president at Moe's Southwest Grill, LLC and Mama Fu's Noodle House, Inc., both subsidiaries/franchise concepts of Raving Brands Holding, Inc., founded by Defendant Martin Sprock. After promotions, on March 23, 2004, Wheatley was informed by Sprock and Rick Akam (then COO of Raving Brands) that she had become a partner in Raving Brands and was to receive 50,000 shares in both Moe's and Mama Fu's, with financial distributions consistent with stock ownership. Wheatley resigned in April 2005 and requested stock certificates, but neither the certificates nor further payments were provided.

Wheatley filed suit on August 22, 2005, asserting claims including conversion (later amended to "quasi-conversion"), piercing the corporate veil, breach of fiduciary duty, violations of Georgia's civil RICO statute, constructive trust, money had and received, quantum meruit, declaratory judgment of ownership of shares, litigation expenses, and punitive damages. Defendants denied liability and counterclaimed for breach of contract, intentional interference, trade secrets violations, and declaratory judgment denying Plaintiff's ownership of unrestricted shares.

The principal dispute centered on whether Defendants orally promised Wheatley that her shares were unrestricted and would remain hers after termination. Defendants denied this and asserted the shares were restricted. Defendants made a settlement offer under O.C.G.A. § 9-11-68 which Plaintiff did not accept, leading to its deemed rejection by operation of law. The Court granted Defendants’ motion for summary judgment on August 27, 2007, concluding Plaintiff could not prove an enforceable agreement for unrestricted shares. Plaintiff appealed, and the Eleventh Circuit affirmed on July 18, 2008. Defendants then moved for attorney’s fees and expenses under O.C.G.A. § 9-11-68, seeking fees incurred both pre-appeal and on appeal. Plaintiff opposed on grounds that the statute did not apply and was unconstitutional under the Georgia Constitution.

Legal Issues Presented

Whether O.C.G.A. § 9-11-68 applies to this case, which involves both tort and non-tort claims.
Whether O.C.G.A. § 9-11-68 applies in federal court given the existence of Federal Rule of Civil Procedure 68 and the Erie doctrine.
Whether O.C.G.A. § 9-11-68 violates the Georgia Constitution by infringing the right of access to courts (Ga. Const. art. I, § 1, ¶ 12) or by constituting an unconstitutional special law (Ga. Const. art. III, § 6, ¶ 4).
If constitutional, whether the statute applies when multiple claims are asserted, some sounding in tort and others not.

Arguments of the Parties

Plaintiff's Arguments

O.C.G.A. § 9-11-68 applies only to tort actions, and since this case involves both tort and non-tort claims, the statute does not apply.
The statute violates her constitutional right of access to the courts under the Georgia Constitution.
The statute is an unconstitutional special law because it solely affects tort litigants.
The statute is preempted by Federal Rule of Civil Procedure 68 and thus inapplicable in federal court.

Defendants' Arguments

The statute applies because the Plaintiff’s claims are predominantly tort claims.
O.C.G.A. § 9-11-68 is substantive state law and not preempted by Rule 68, so it applies in federal court under Erie.
The statute is constitutional and authorizes attorney’s fees and expenses for offers of settlement rejected by the opposing party.
The statute allows conditions on offers of settlement, which were properly included in their offer.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
McGahee v. Rogers, 280 Ga. 750, 632 S.E.2d 657 (2006)	Interpretation that attorney’s fees statutes do not authorize fees for appellate proceedings.	Supports limitation of O.C.G.A. § 9-11-68 awards to fees incurred before entry of judgment, excluding appellate fees.
David G. Brown P.E., Inc. v. Kent, 274 Ga. 849, 561 S.E.2d 89 (2002)	Attorney’s fees statutes do not permit awards for appellate litigation expenses.	Reinforces statutory limitation on fees to pre-judgment period.
Staten v. Staten, 242 Ga. 399, 249 S.E.2d 81 (1978)	Allows recovery of attorney’s fees on appeal in specific substantive areas (divorce actions).	Distinguishes statutes allowing appellate fees from O.C.G.A. § 9-11-68, which does not.
American Ass'n of Cab Cos. v. Olukoya, 233 Ga.App. 731, 505 S.E.2d 761 (1998)	Allows attorney’s fees on appeal under bad faith insurer statute.	Shows exceptions where appellate fees are allowed, contrasting with O.C.G.A. § 9-11-68.
Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938)	Federal courts in diversity apply state substantive law and federal procedural law.	Framework for analyzing whether O.C.G.A. § 9-11-68 applies in federal court.
Gasperini v. Ctr. for Humanities, Inc., 518 U.S. 415, 116 S.Ct. 2211, 135 L.Ed.2d 659 (1996)	Analysis of substantive vs. procedural state law in federal diversity cases.	Supports applying O.C.G.A. § 9-11-68 as substantive law in federal court.
Esfeld v. Costa Crociere, S.P.A., 289 F.3d 1300 (11th Cir. 2002)	Multi-step test for applying state or federal law in diversity cases.	Guides court’s analysis on conflict between O.C.G.A. § 9-11-68 and Rule 68.
Hanna v. Plumer, 380 U.S. 460, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965)	Federal procedural rules supersede conflicting state law.	Used to determine whether Rule 68 preempts O.C.G.A. § 9-11-68.
Tanker Management, Inc. v. Brunson, 918 F.2d 1524 (11th Cir. 1990)	State offer-of-settlement statute not in direct collision with Rule 68.	Supports the court’s conclusion that O.C.G.A. § 9-11-68 can be harmoniously applied with Rule 68.
Walker v. Armco Steel Corp., 446 U.S. 740 (1980)	Federal courts must apply state substantive law when no direct conflict with federal rules.	Analogous to the court’s reasoning on applying O.C.G.A. § 9-11-68 in federal court.
Alyeska Pipeline Service Co. v. Wilderness Soc., 421 U.S. 240, 95 S.Ct. 1612, 44 L.Ed.2d 141 (1975)	Limits on federal courts’ inherent power to award attorney’s fees; distinction between federal and state law on fees.	Supports the substantive nature of O.C.G.A. § 9-11-68 and its application in diversity cases.
People of Sioux County v. Nat'l Surety Co., 276 U.S. 238, 48 S.Ct. 239, 72 L.Ed. 547 (1928)	State attorney’s fees statutes should not be thwarted by removal to federal court.	Supports application of O.C.G.A. § 9-11-68 in federal diversity cases.
Pinkerton Laws, Inc. v. Royal Ins. Co. of Am., 227 F.Supp.2d 1348 (N.D.Ga. 2002)	O.C.G.A. § 33-4-6 is substantive law for Erie purposes.	Analogous reasoning applied to O.C.G.A. § 9-11-68 as substantive law.
Elberta Crate Box Co. v. Cox Automation Systems, LLC, No. 6:05 CV 03 (HL), 2005 WL 1972599 (M.D.Ga. Aug. 16, 2005)	O.C.G.A. § 13-6-11 is substantive for Erie purposes.	Supports substantive characterization of O.C.G.A. § 9-11-68.
Wheatley v. Moe's Southwest Grill, LLC, 285 Fed.Appx. 660 (11th Cir. 2008)	Affirmed summary judgment for Defendants on enforceability of unrestricted stock agreement.	Final appellate disposition of the underlying case.
Kitchen v. CSX Transp., Inc., 19 F.3d 601 (11th Cir. 1994)	Supports certification of unsettled questions of state law to state supreme court.	Justifies certification of constitutional questions to Supreme Court of Georgia.
Wood v. N.Y. Life Ins. Co., 758 F.2d 1459 (11th Cir. 1985)	Certification to state supreme court should not be limited in scope by federal court’s framing.	Guides scope of certification to Georgia Supreme Court.

Court's Reasoning and Analysis

The Court first addressed Defendants' renewed motion for attorney's fees for fees incurred on appeal, concluding that O.C.G.A. § 9-11-68 expressly limits fee awards to the period from rejection of the offer of settlement through entry of judgment, excluding appellate fees. The Court denied the renewed motion for appellate fees as meritless.

Turning to the applicability of O.C.G.A. § 9-11-68, the Court analyzed Plaintiff’s argument that the statute applies only to tort actions. The Court found the statute refers to offers to settle tort claims, not tort actions, and thus it authorizes offers to settle any tort claims within a case, even if the case also contains non-tort claims. The Court noted no controlling precedent on this issue and included it in the questions certified to the Georgia Supreme Court.

Regarding the statute’s applicability in federal court, the Court applied the Erie doctrine and Eleventh Circuit precedent. It found no direct conflict between O.C.G.A. § 9-11-68 and Federal Rule of Civil Procedure 68, as the two address different remedies and procedures. The statute is substantive law creating a right to attorney’s fees for settlement offers, and the Court is bound to apply it in this diversity case.

The Court then considered Plaintiff’s constitutional challenges to O.C.G.A. § 9-11-68, specifically the right of access to courts and the prohibition on special laws. The Georgia Supreme Court has ruled that retroactive application violates the constitution, but retroactivity is not at issue here. Because the constitutionality of the statute on these grounds remains an open question, the Court deferred ruling and certified the constitutional questions to the Georgia Supreme Court.

Holding and Implications

The Court DENIED Defendants’ renewed motion for attorney’s fees and expenses of litigation incurred on appeal.

The Court DENIED WITHOUT PREJUDICE Defendants’ original motion for attorney’s fees and expenses of litigation incurred pre-judgment, pending resolution of certified questions by the Supreme Court of Georgia regarding the constitutionality and applicability of O.C.G.A. § 9-11-68.

The Clerk was directed to forward the certified record and questions to the Supreme Court of Georgia.

The direct effect is that no attorney’s fees are awarded at this time, and the substantive legal questions regarding the statute’s constitutionality and scope remain unresolved pending state supreme court guidance. No new federal precedent was established beyond the application of existing Erie and procedural principles.

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Anne WHEATLEY, Plaintiff, v. MOE'S SOUTHWEST GRILL, LLC; Mama Fu's Noodle House, Inc.; Ra

ORDER

TIMOTHY BATTEN, District Judge

I. Background

Atlanta-based Defendant Raving Brands Holding, Inc. is a national franchisor of food and beverage concepts. Its concepts include Defendant Moe's Southwest Grill, LLC and Defendant Mama Fu's Noodle House, Inc. Defendant Martin Sprock founded Raving Brands, Moe's, and Mama Fu's.

In July 2003, Plaintiff Anne Wheatley became a part-time, hourly employee of Moe's and Mama Fu's, serving as an administrative assistant to a company vice president. After a series of promotions, on March 23, 2004, Sprock and Rick Akam, who at that time was Raving Brands' chief operating officer, informed Plaintiff that she had become a partner in Raving Brands. They also told her that as a part of the compensation package for being made partner, she was to receive 50,000 shares in both Moe's and Mama Fu's. She in fact received financial distributions consistent with stock ownership.

At the end of April 2005, Plaintiff resigned from Moe's and Mama Fu's. The next month, she wrote a letter to Defendants requesting that the stock certificates for her shares be given to her. She never received a response from Defendants, nor did she receive the certificates or any further distribution payments.

On August 22, 2005, Plaintiff filed this suit against Defendants. Her complaint set forth claims for conversion; conversion: piercing the corporate veil; breach of fiduciary duty; violations of Georgia's civil RICO statute; constructive trust; money had and received; quantum meruit; a declaratory judgment that she is the owner of 50,000 unrestricted shares of Moe's and Mama Fu's; expenses of litigation; and punitive damages.

Plaintiff later amended her complaint to change her claim for conversion to a claim for "quasi-conversion."

Defendants denied liability and filed a counterclaim setting forth claims against Plaintiff for breach of contract, intentional interference with business opportunities and prospective advantage, violations of the Georgia Trade Secrets Act, and a declaratory judgment that Plaintiff does not own unrestricted shares in Moe's and Mama Fu's.

Issue having been joined, the case boiled down to whether, as Plaintiff contended, Defendants had orally promised her that her stock in Moe's and Mama Fu's was unrestricted, meaning that she would still own it and could take it with her upon her termination from Defendants' employ. Defendants denied having ever made any such promise and insisted that Plaintiff's shares were restricted.

On January 10, 2007, Defendants made an offer of settlement to Plaintiff pursuant to O.C.G.A. § 9-11-68. The offer stated that Defendants would pay Plaintiff $35,000 on the condition that she dismiss the case and release Defendants from liability on all claims. Plaintiff never responded to Defendants' offer. Therefore, pursuant to O.C.G.A § 9-11-68(c), as of February 9, 2007 (thirty days from the date of offer) Defendants' offer was deemed rejected.

On August 27, 2007, the Court granted Defendants' motion for summary judgment on the claims in Plaintiff's complaint, essentially finding that as a matter of law Plaintiff could not prove that she and Defendants had an enforceable agreement that her 50,000 shares in Moe's and Mama Fu's were unrestricted.

On September 10, 2007, Defendants filed a motion, pursuant to O.C.G.A. § 9-11-68, for an award of attorney's fees and expenses of litigation [143]. Defendants requested attorney's fees of $96,711.00 and expenses of litigation of $306.25, which were incurred between February 9 and August 27, 2007.

On September 18, 2007, Plaintiff appealed the August 27, 2007 order to the Eleventh Circuit. Defendants cross-appealed the portion of the order that struck their counterclaim as a sanction for their abusive discovery practices. This Court reserved ruling on Defendants' motion until a final disposition was reached by the Eleventh Circuit.

On July 18, 2008, the Eleventh Circuit affirmed. Wheatley v. Moe's Southwest Grill, LLC, 285 Fed.Appx. 660 (11th Cir. 2008). A certified copy of the Eleventh Circuit's opinion was filed in this Court on September 12, 2008.

Plaintiff opposes Defendants' motion on two grounds. First, she contends that O.C.G.A. § 9-11-68 does not apply in this case. Second, she contends that the statute violates the Georgia Constitution.

II. Discussion

A. Defendants' Renewed Motion for Attorney's Fees

Prior to ruling on Defendants' original motion for attorney's fees, the Court will address Defendants' renewed motion for attorney's fees, which Defendants filed on September 26, 2008[166].

In their renewed motion, Defendants reassert their claim for attorney's fees and expenses incurred between February 9 and August 27, 2007, plus a new claim for attorney's fees and expenses of approximately $49,000 incurred while the case was on appeal to the Eleventh Circuit. Plaintiff has not yet filed a response to this motion, as the ten-day period for her to do so has not yet expired. LR 7.1(B), NDGa.

The portion of Defendants' renewed motion that seeks attorney's fees and expenses of litigation incurred on appeal is meritless. The statute expressly limits awards of fees and expenses to those incurred "from the date of the rejection of the offer of settlement through the entry of judgment. . . ." O.C.G.A. § 9-11-68(b)(1). Accordingly, the Court will deny Defendants' renewed motion. The Court will now turn to Defendants' original motion for attorney's fees, which seeks $97,017.25 incurred between February 9 and August 27, 2007.

The statute's express limitation on awards of attorney's fees through (but not beyond) the entry of judgment is consistent with the Georgia Supreme Court's interpretations of other fee-shifting statutes that are available in civil actions generally. See, e.g., McGahee v. Rogers, 280 Ga. 750, 632 S.E.2d 657 (2006) (holding that O.C.G.A. § 9-15-14, involving frivolous litigation, does not authorize the recovery of attorney's fees and expenses of litigation incurred on appeal); David G. Brown P.E., Inc. v. Kent, 274 Ga. 849, 851, 561 S.E.2d 89, 91 (2002) (holding that O.C.G.A. § 13-6-11, which authorizes awards of attorney's fees against a defendant who acts in bad faith, is stubbornly litigious, or causes the plaintiff unnecessary trouble and expense "does not permit an award of attorney fees and litigation expenses for proceedings before the appellate courts."). On the other hand, the supreme court has allowed the recovery of attorney's fees incurred on appeal pursuant to fee-shifting statutes covering specific substantive areas of law. See, e.g., Staten v. Staten, 242 Ga. 399, 249 S.E.2d 81 (1978) (holding that O.C.G.A. § 19-6-2, involving divorce actions, authorizes recovery of attorney's fees and expenses of litigation incurred on appeal); Am. Ass'n of Cab Cos. v. Olukoya, 233 Ga.App. 731, 505 S.E.2d 761 (1998) (holding that O.C.G.A. § 33-4-6, which authorizes an award of attorney's fees against an insurer who refuses in bad faith to pay a covered claim, allows recovery of attorney's fees and expenses of litigation incurred on appeal).

B. Applicability of O.C.G.A. § 9-11-68 to This Action

1. Characterization of This Case as a "Tort" Action

Plaintiff first contends that O.C.G.A § 9-11-68 is applicable only in tort actions and that this is not a tort action. Defendants disagree, insisting that the statute is applicable because this is a tort action.

Plaintiff and Defendants characterize the individual counts of Plaintiff's complaint as indicated in the chart below. Plaintiff's Defendants' Count Characterization Characterization Quasi-conversion Tort Tort Conversion: piercing the Tort Tort corporate veil Breach of fiduciary duty Tort Tort Georgia's civil RICO Hybrid criminal-civil Tort — based on the tort of statute statute conversion Constructive trust Contract Equity — based on fraud, which is a tort Money had and received Quasi-contractual Equity Quantum meruit Contract Equity Declaratory judgment [No characterization] Based on above torts Expenses of litigation [No characterization] Based on above torts Punitive damages [No characterization] Based on above torts According to Plaintiff, because this case involves both tort and non-tort claims, "the instant case is not a tort action" and O.C.G.A. § 9-11-68 does not apply. Defendants, who, as the chart above reflects, characterize almost all of Plaintiff's claims as being tort claims, counter that "Plaintiff's action was in tort and O.C.G.A. § 9-11-68 applies."

The statute, however, does not expressly limit its application to tort actions. Instead, it authorizes either party to serve upon the other party an offer to "settle a tort claim . . ." O.C.G.A. § 9-11-68(a) (emphasis added).

There are no Georgia or federal cases addressing Plaintiff's argument. It appears to this Court that because the statute refers to offers to settle tort claims rather than tort actions, there is no need to determine the proper characterization of a pleading asserting multiple causes of action. The statute authorizes either party to offer to settle any tort claims asserted in the case. However, as discussed below, because this Court intends to certify to the Supreme Court of Georgia a question regarding the statute's constitutionality, the Court will include in that certification a question relating to this issue.

2. Applicability of O.C.G.A. § 9-11-68 in Federal Court

Plaintiff also argues that the statute is inapplicable to this case pursuant to Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), and its progeny. She contends that Fed.R.Civ.P. 68 ("Rule 68"), which authorizes a party defending a claim to collect costs incurred after an offer of judgment is rejected by the opposing party, preempts O.C.G.A. § 9-11-68. The Court disagrees.

Under the Erie doctrine, when a federal court adjudicates state law claims in a diversity of citizenship action, the court is obligated to apply the state substantive law and federal procedural law. See Gasperini v. Ctr. for Humanities, Inc., 518 U.S. 415, 427, 116 S.Ct. 2211, 135 L.Ed.2d 659 (1996). Due in part to the confusing nature of this substance/procedure dichotomy, the Eleventh Circuit has adopted a multi-part analysis for determining whether state or federal law should be applied to a particular issue raised in diversity cases. See, e.g., Proudfoot Co. World Headquarters L.P. v. Thayer, 877 F.2d 912, 917-19 (11th Cir. 1989).

The first step is for the court to determine whether state and federal law conflict with respect to the disputed issue. Esfeld v. Costa Crociere, S.PA., 289 F.3d 1300, 1306 (11th Cir. 2002). "If no conflict exists, then the analysis need proceed no further, for the court can apply state and federal law harmoniously to the issue at hand." Id. at 1306-07. If, however, the relevant state and federal laws conflict, the court must ask whether a congressional statute or Federal Rule of Civil Procedure addresses the disputed issue. Hanna v. Plumer, 380 U.S. 460, 469-70, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965). If a federal statute or rule does directly cover the disputed issue, the court is to apply federal law. Id. at 471, 85 S.Ct. 1136. "If no federal statute or rule is on point, then the court must determine whether federal judge-made law, rather than state law, should be applied." Esfeld, 289 F.3d at 1307.

In evaluating whether federal judge-made law or state law should be applied, the district court should begin by determining whether a decision not to apply state law to the disputed issue would lead to different outcomes in state and federal court. Id. In other words, "[w]ould application of the standard have so important an effect upon the fortunes of one or both of the litigants that failure to apply it would unfairly discriminate against citizens of the forum State, or be likely to cause a plaintiff to choose the federal court?" Gasperini, 518 U.S. at 428, 116 S.Ct. 2211. If the answer is "no," then the court should apply federal judge-made law. Esfeld, 289 F.3d at 1307. Conversely, if the answer is "yes," indicating that state law is outcome-determinative, the court must apply the state law, unless significant "countervailing federal interests" are at stake justifying the application or federal law. Id.

While the question of whether O.C.G.A. § 9-11-68 is substantive law and whether it is in conflict with Rule 68 is a matter of first impression, the Eleventh Circuit and other courts have addressed the applicability in federal court of similar state-enacted offer-of-settlement and fee-shifting statutes.

For instance, in Tanker Management, Inc. v. Brunson, 918 F.2d 1524, 1528 (11th Cir. 1990), the Eleventh Circuit considered the issue of whether a Florida statute that provided that a prevailing defendant could recover attorney's fees if the plaintiff unreasonably rejected either a settlement offer or an offer of judgment was in conflict with Rule 68. Impliedly determining that the Florida statute was substantive law, the Eleventh Circuit found that Rule 68 did not conflict with the Florida statute:

Appellant's argument in favor of Rule 68 fails initially because Rule 68 is not in "direct collision" with the portion of F.S.A. § 45.061 applicable in this case. Rule 68 concerns only interest and offers of judgment, while the Florida statute concerns attorney's fees, offers of judgment and settlement offers. Thus, the circumstances here are similar to those in Walker v. Armco Steel Corp., 446 U.S. 740 [(citations omitted)] (1980), in which the Court in a diversity action was asked to determine whether the federal court should follow state law or, alternatively, Fed.R.Civ.P. 3 in deciding when an action is commenced for the purpose of tolling the state statute of limitations. In the course of holding that Oklahoma law controlled, the Court stated: "`[T]he scope of the Federal Rule [is] not as broad as the losing party urge[s], and therefore, there being no Federal Rule which cover[s] the point in dispute, Erie command[s] the enforcement of state law.'" 446 U.S. 740, 750 [(citations omitted)] (1980) (citing Hanna v. Plumer, 380 U.S. 460, 472 [(citations omitted)] (1965)).

Tanker Mgmt., 918 F.2d at 1528.

Similarly, Rule 68 and O.C.G.A. § 9-11-68 are not in "direct collision" with one another. Rule 68 is available only to a party defending against a claim, whereas O.C.G.A. § 9-11-68 is available to both plaintiffs and defendants. Moreover, Rule 68 allows the recovery of "costs," which ordinarily does not include attorney's fees. O.C.G.A. § 9-11-68, on the other hand, awards the successful offeror his attorney's fees incurred between the date of rejection of the offer and the entry of judgment. Additionally, Rule 68 applies to any claim, whereas O.C.G.A. § 9-11-68 is applicable only to tort claims. Further, Rule 68 authorizes offers of judgment, not offers of settlement, as is the case with O.C.G.A. § 9-11-68. Finally, unlike Rule 68, O.C.G.A. § 9-11-68 expressly allows the offeror to place conditions (as Defendants did here) on the acceptance of the offer of settlement. In light of these substantial differences between Rule 68 and O.C.G.A. § 9-11-68, the two cannot be said to be in "direct collision," and there is no reason to believe that O.C.G.A. § 9-11-68 cannot be applied in harmony with Rule 68.

Defendants' offer of settlement included, among others, the following conditions: that Plaintiff would execute a general release of not only Defendants, but also "their respective agents, employees, subsidiaries, contractors, insurers, representatives, successors and assigns" from any and all claims that could have been asserted in this action; and that Plaintiff release all claims of ownership as to any interest in the defendant companies and "their respective subsidiaries, successors and/or predecessors in interests, and affiliated companies."

Further, in Tanker Management the Eleventh Circuit discussed the leading United States Supreme Court case regarding the parameters set on the award of attorney's fees in federal court actions: Alyeska Pipeline Service Co. v. Wilderness Soc., 421 U.S. 240, 95 S.Ct. 1612, 44 L.Ed.2d 141 (1975). In Alyeska, the Court made a careful distinction between how federal courts should apply their inherent power to award attorney's fees, unless expressly forbidden by Congress, and how federal courts should apply state law regarding attorney's fees. Id. at 259, 95 S.Ct. 1612. The Court noted:

A very different situation is presented when a federal court sits in a diversity case. "[I]n an ordinary diversity case where the state law does not run counter to a valid federal statute or rule of court, and usually it will not, state law denying the right to attorney's fees or giving a right thereto, which reflects a substantial policy of the state, should be followed."

Id. at 259 n. 31, 95 S.Ct. 1612 (citations omitted) (quoting 6 J. MOORE, FEDERAL PRACTICE, ¶ 54.77[2], pp. 1712-1713 (3d ed. 1974) (footnotes omitted)). The Supreme Court continued by discussing People of Sioux County v. Nat'l Surety Co., 276 U.S. 238, 243, 48 S.Ct. 239, 72 L.Ed. 547 (1928), a case prior to Erie in which the Court recognized that it would be an anomalous result if a state statute providing for attorney's fees could be thwarted by removal of the case to federal court. Alyeska, 421 U.S. at 259 n. 31, 95 S.Ct. 1612. In Alyeska, the Supreme Court found no reason a different result should be reached post- Erie.

O.C.G.A. § 9-11-68 creates a substantive right to attorney's fees in certain cases where either party, having made an offer of settlement (not judgment, unlike Rule 68), ultimately prevails. While the statute may provide certain procedural constraints, the statute is at its core a substantive law. Accord Pinkerton Laws, Inc. v. Royal Ins. Co. of Am., 227 F.Supp.2d 1348, 1357 (N.D.Ga. 2002) (holding that O.C.G.A. § 33-4-6, which authorizes an award of attorney's fees against an insurer who refuses in bad faith to pay a covered claim, was substantive law for purposes of the Erie doctrine and thus inapplicable where the parties had agreed that the policy was governed by Florida law); Elberta Crate Box Co. v. Cox Automation Systems, LLC, No. 6:05 CV 03 (HL), 2005 WL 1972599, at *5-6 (M.D.Ga. Aug. 16, 2005) (holding that O.C.G.A. § 13-6-11, which authorizes an award of attorney's fees against a defendant who acts in bad faith, is stubbornly litigious, or causes the plaintiff unnecessary trouble and expense, is substantive for purposes of Erie).

Because O.C.G.A. § 9-11-68 is substantive in nature and does not conflict with a federal law or rule of procedure, the Court is bound to apply it to this case. C. The Constitutionality of O.C.G.A. § 9-11-68

Plaintiff also contends that O.C.G.A. § 9-11-68 violates the Georgia Constitution in two ways. First, she argues that the statute violates her constitutional right of access to the courts. See Ga. Const. art. I, § 1, ¶ 12. Second, she contends that because the statute "solely affects tort litigants," it is an unconstitutional special law, contrary to Ga. Const. art. III, § 6, ¶ 4.

O.C.G.A. § 9-11-68 became effective on February 16, 2005. The Georgia Supreme Court has held that retroactive application of the statute violates the Georgia Constitution. Fowler Props., Inc. v. Dowland, 282 Ga. 76, 646 S.E.2d 197 (2007). Otherwise, the supreme court, which has exclusive appellate jurisdiction over questions regarding the constitutionality of Georgia statutes, has not yet addressed the constitutionality of O.C.G.A. § 9-11-68.

Plaintiff filed this action on August 22, 2005. Therefore, retroactive application is not involved in this case.

Ga. Const. art VI, § 6, ¶ 2(1).

Because resolution of this case involves questions of Georgia law which are dispositive but unanswered by precedent in the decisions of the Supreme Court of Georgia, this Court defers its decision in this case pending certification of the questions below to the Supreme Court of Georgia pursuant to Ga. Const. art. VI, § 6, ¶ 4; O.C.G.A. § 15-2-9; and Rule 37 of the Supreme Court of Georgia. See Kitchen v. CSX Transp., Inc., 19 F.3d 601 (11th Cir. 1994).

QUESTIONS TO BE CERTIFIED

1. Does O.C.G.A. § 9-11-68 violate art. I, § 1, ¶ 12 of the Georgia Constitution?

2. Does O.C.G.A. § 9-11-68 violate art. III, § 6, ¶ 4 of the Georgia Constitution?

3. If the answer to both questions 1 and 2 is "no," does O.C.G.A. § 9-11-68 apply to a case such as this, in which the Plaintiff asserts multiple claims, some of which sound in tort and some of which do not?

Nothing in this certification, including the Court's statement of the questions to be certified, is meant to limit the scope of the inquiry by the Supreme Court of Georgia. See Wood v. N.Y. Life Ins. Co., 758 F.2d 1459, 1462 (11th Cir. 1985).

The entire record in the case, together with copies of the briefs of the parties, is transmitted herewith.

III. Conclusion

For the foregoing reasons, the Court DENIES Defendants' renewed motion for attorney's fees and expenses of litigation incurred on appeal [166]. The Court DENIES Defendants' original motion for attorney's fees and expenses of litigation [143] WITHOUT PREJUDICE pending the Supreme Court of Georgia's answers to the questions certified herein. The CLERK is DIRECTED to forward a certified copy of the record to the Supreme Court of Georgia.