LAKES v. MARRIOTT CORP

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Docket Number

S94G0066.

Attorney(S)

Joseph H. King, Jr., for appellants. Gorby Reeves, Michael J. Gorby, Amanda H. Burri, Martha D. Turner, for appellees.

Judges

Robert Benham

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Smart Summary

Factual and Procedural Background

Appellants filed a tort action against appellees which was scheduled for pre-trial non-binding arbitration pursuant to a local rule. The appellants failed to appear at the arbitration, resulting in an award entered in appellees' favor. After appellants did not file a timely demand for jury trial with the Court Administrator within 30 days following the arbitration award, appellees moved for entry of judgment based on the arbitration award. Before the hearing on that motion, appellants voluntarily dismissed their case pursuant to OCGA § 9-11-41(a). Subsequently, appellants refiled the same tort action as a renewal under OCGA § 9-2-60. The trial court entered judgment for appellees in the original case, ruling appellants were not entitled to dismiss voluntarily, and barred appellants from recovery in the refiled case by res judicata. The Court of Appeals affirmed, holding appellants were not authorized to dismiss because appellees were entitled to judgment due to appellants' failure to properly file the demand for trial. This Court granted certiorari to determine whether appellants were entitled to refile their action after a voluntary dismissal under these circumstances.

Legal Issues Presented

Whether appellants were entitled to refile their tort action after voluntarily dismissing the original case pursuant to OCGA § 9-11-41(a) given that appellees were entitled to judgment due to appellants' failure to comply with the procedural rule regarding demand for trial following arbitration.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Turner v. MARTA, 197 Ga. App. 447 (398 S.E.2d 794) (1990)	Failure to demand trial after arbitration entitles opposing party to judgment based on arbitration award.	The Court of Appeals relied on Turner to hold appellees were entitled to judgment due to appellants' failure to properly file demand for trial.
OCGA § 9-11-41(a)	Allows voluntary dismissal by plaintiff before resting case, subject to limitations.	The Court analyzed the legislative intent and judicial limitations on voluntary dismissal under this statute.
Muhanna v. O'Kelley, 185 Ga. App. 220 (363 S.E.2d 626) (1987)	Voluntary dismissal is barred after court announces intent to rule for defendant; requires actual knowledge of adverse ruling.	Distinguished from present case to show entitlement to judgment does not equal knowledge of actual adverse ruling.
Peoples Bank of Talbotton v. Exchange Bank, 119 Ga. 366, 368 (46 S.E. 416) (1903)	Voluntary dismissal cannot be used to deprive opposing party of a victory once actual result is known.	Supported the principle that knowledge of actual, not possible, result bars voluntary dismissal.
Bailey v. Austin, 185 Ga. App. 831 (366 S.E.2d 214) (1988)	Voluntary dismissal is effective absent announcement of adverse ruling even when sanction threatened.	Used to distinguish present case from Court of Appeals' reasoning and support dismissal validity.
Kilby v. Keener, 249 Ga. 667 (293 S.E.2d 318) (1982)	Dismissal may be vacated by amending complaint after dismissal.	Distinguished from Bailey to clarify different procedural posture.
Smith v. Memorial Med. Ctr., 208 Ga. App. 26 (430 S.E.2d 57) (1993)	Dismissing a case deprives trial court of jurisdiction over the matter.	Supported holding that trial court lacked authority to enter judgment after voluntary dismissal.
C S Indus. Supply Co. v. Proctor Gamble Paper Products Co., 199 Ga. App. 197 (404 S.E.2d 346) (1991)	Legislative intent behind voluntary dismissal is to allow plaintiff to escape untenable positions without bad-faith exception.	Provided context for interpretation of OCGA § 9-11-41(a) rights and limits.

Court's Reasoning and Analysis

The Court examined the interplay between the local arbitration rule, OCGA § 9-11-41(a) governing voluntary dismissal, and the precedent set by Turner v. MARTA. It acknowledged that while appellees were entitled to judgment due to appellants' failure to file a timely demand for trial, this entitlement did not equate to appellants having knowledge of the actual outcome of the case. The Court emphasized the distinction between an expectation of judgment and an announced or entered judgment, relying on prior cases such as Muhanna and Bailey to establish that voluntary dismissal remains effective absent an announcement of an adverse ruling. The Court rejected the Court of Appeals' "handwriting on the wall" approach, which treated entitlement to judgment as actual knowledge of the case's result. Because appellants voluntarily dismissed before any ruling or judgment was entered, the dismissal was effective and divested the trial court of jurisdiction. Consequently, the trial court lacked authority to enter judgment for appellees in either the original or refiled case, and the Court of Appeals' affirmance of those judgments was erroneous.

Holding and Implications

Judgment reversed.

The Court held that appellants' voluntary dismissal was effective because there had been no announcement or entry of judgment, and appellants did not have knowledge of the actual adverse ruling at the time of dismissal. This decision restores appellants' right to refile the action. The ruling directly affects the parties by invalidating the trial court's entry of judgment for appellees and the Court of Appeals' affirmance, but does not establish a new precedent beyond clarifying the application of voluntary dismissal rights under the circumstances presented.

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LAKES et al. v. MARRIOTT CORPORATION et al.

BENHAM, Presiding Justice.

Appellants filed a tort action against appellees. In accordance with a local rule, the case was scheduled for pre-trial non-binding arbitration. When appellants did not appear for arbitration, an award was entered in appellees' favor. Then, when a demand for jury trial had not been filed with the Court Administrator within 30 days after the arbitration award as required by the rule (appellants filed their demand with the clerk of court), appellees moved for entry of judgment pursuant to Turner v. MARTA, 197 Ga. App. 447 ( 398 S.E.2d 794) (1990). Prior to a scheduled hearing on that motion, appellants filed a voluntary dismissal pursuant to OCGA § 9-11-41 (a). Just over a month later, appellants filed the same tort action again as a renewal action under OCGA § 9-2-60. On appellees' motion, the trial court entered judgment for appellees in the first case, holding that appellants were not entitled to dismiss voluntarily. In the second case, the trial court held that appellants were barred from recovery by res judicata. The Court of Appeals affirmed, holding that appellants were not authorized to dismiss the first action because appellees were already entitled to judgment due to appellants' failure to file the demand for trial properly: "Thus, the handwriting was on the wall and [appellants] knew the actual result of their case". Lakes v. Marriott Corp., 210 Ga. App. 335 ( 436 S.E.2d 36) (1993). This court granted appellants' application for certiorari, posing the question whether appellants were entitled to refile their action after a voluntary dismissal under the facts of this case.

Fulton Superior Court Rule 1000, which entitles each party to a de novo trial upon the filing of a demand for trial with the Court Administrator within 30 days after entry of the arbitration award, but provides that the failure to file the demand for trial constitutes consent to the award and authorizes entry of judgment on the award upon the motion of any party.

The Court of Appeals held in that case that failure of a party to demand trial after arbitration entitles the opposing party to a judgment based on the arbitration award.

Appellants were resisting appellees' motion on the basis of an allegation that their counsel was misled by the superior court clerk's staff to believe that filing a demand for trial with the clerk was sufficient.

The intent of the legislature in enacting OCGA § 9-11-41 (a) was to give a plaintiff an opportunity to escape from an "untenable position" and relitigate the case, and thus there is no "bad-faith exception" to the right to dismiss and later relitigate, despite inconvenience and irritation to the defendant. C S Indus. Supply Co. v. Proctor Gamble Paper Products Co., 199 Ga. App. 197 ( 404 S.E.2d 346) (1991). However, the right to dismiss voluntarily is not without limit: in addition to the express limits in OCGA § 9-11-41 (a) regarding the timing of dismissal and regarding cases in which a counterclaim has been asserted,

the right of voluntary dismissal has always been subject to a judicially created limitation prohibiting its exercise, even prior to trial, where there has already been an announcement by the court of its intention to rule in favor of the defendant.

Muhanna v. O'Kelley, 185 Ga. App. 220 ( 363 S.E.2d 626) (1987). The reason for that limitation was explained in Peoples Bank of Talbotton v. Exchange Bank, 119 Ga. 366, 368 ( 46 S.E. 416) (1903):

OCGA § 9-11-41 (a):

Voluntary dismissal; effect. Subject to the provisions of subsection (c) of Code Section 9-11-23, of Code Section 9-11-66, and of any statute, an action may be dismissed by the plaintiff, without order or permission of court, by filing a written notice of dismissal at any time before the plaintiff rests his case. After the plaintiff rests his case, permission and an order of the court must be obtained before dismissal. If a counterclaim has been pleaded by a defendant prior to the service upon him of the plaintiff's motion to dismiss, the action shall not be dismissed against the defendant's objection unless the counterclaim can remain pending for independent adjudication by the court. A dismissal under this subsection is without prejudice, except that the filing of a third notice of dismissal operates as an adjudication upon the merits.

Although the 1985 amendment to the statute cuts off the right to dismiss at the point the plaintiff rests its case rather than at verdict, the requirement of actual knowledge of an adverse result has continued to be the standard with regard to dismissal prior to trial. Muhanna v. O'Kelley, 185 Ga. App. 220 ( 363 S.E.2d 626) (1987).

The principle ... is that after a party has taken the chances of litigation and knows what is the actual result reached in the suit by the tribunal which is to pass upon it, he can not, by exercising his right of voluntary dismissal, deprive the opposite party of the victory thus gained. It is the knowledge of the actual, not of the possible, result of a case which precludes the exercise of the right of dismissal.

In reaching its decision in the present case, the Court of Appeals equated a party's entitlement to judgment under Turner, supra, with knowledge of the actual result of the case. That equation is faulty because a defendant's entitlement to judgment under Turner, like a defendant's entitlement to summary judgment (see Muhanna, supra), does not amount to knowledge of the actual, as opposed to possible, result of the case: until the entry of that judgment or an announcement by the trial court of an intent to rule for the defendant, the defendant has only an expectation of being awarded a judgment. That is to say, without an announcement from the trial court of the actual outcome of the case, the "handwriting on the wall" is merely in pencil, subject to being erased. In concluding that such "handwriting on the wall" as appeared in this case was indelible, the Court of Appeals did not take into account the lessons of its earlier and correct decisions in Bailey v. Austin, 185 Ga. App. 831 ( 366 S.E.2d 214) (1988), and Muhanna v. O'Kelley, supra.

In Bailey, the plaintiff was given a set time to respond to discovery or have her case dismissed with prejudice. She did not respond in a timely fashion, but did dismiss her case on the same day that the trial court entered an order of dismissal. The Court of Appeals held that since the trial court would have had to hold a hearing before dismissal in order to evaluate the reasons for the plaintiff's failure to comply with the previous order, the threatened sanction of dismissal was not an announcement of a result within the meaning of Muhanna, supra, and the voluntary dismissal was effective. The situation in Bailey is distinguishable from that in Kilby v. Keener, 249 Ga. 667 ( 293 S.E.2d 318) (1982) (cited by the Court of Appeals in its opinion in the present case), in that the plaintiff in Bailey was threatened with the entry of judgment in the event she did not comply with an order of the court, whereas the plaintiff in Kilby had already suffered a dismissal, but was given the right to have that dismissal vacated by amending the complaint. See Peacock Constr. Co. v. Chambers, 223 Ga. 515 ( 156 S.E.2d 348) (1967).

In Muhanna, the Court of Appeals dealt with the interplay of OCGA §§ 9-11-41 (a) and 9-11-56 (c), which provides in pertinent part that

judgment ... shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law ....

At the conclusion of a summary judgment hearing, but before the trial court had announced a decision, the plaintiffs in Muhanna decided their response was inadequate and dismissed their complaint. Although it was apparent to the plaintiffs that the record as it stood entitled the defendant to summary judgment, the Court of Appeals held that the dismissal was valid because no announcement of judgment had been made, a result which would not be permissible under the "handwriting on the wall" approach taken by the Court of Appeals in the present case.

In the present case, appellants were in an apparently untenable position when they filed their voluntary dismissal in that the record, as it stood then, entitled appellees to judgment pursuant to Turner, supra. As in Bailey and in Muhanna, however, there had been no announcement of an adverse ruling. We hold that appellants cannot be charged, under those circumstances, with knowledge of the actual outcome of the case and that the voluntary dismissal was, therefore, effective. Since the dismissal deprived the trial court of jurisdiction over the case and left the parties in the same position as if the suit had never been filed, the trial court had no authority to enter judgment for appellees in the original suit ( Smith v. Memorial Med. Ctr., 208 Ga. App. 26 ( 430 S.E.2d 57) (1993) or in the refiled suit. Bailey, supra. It follows that the affirmance of those judgments by the Court of Appeals was likewise error.

Judgment reversed. All the Justices concur.