A & M HOSPITALITIES, LLC v. PRENITA ALIMCHANDANI ( 2022 )

THIRD DIVISION
DOYLE, P. J.,
McFADDEN, P. J., and HODGES, J.
NOTICE: Motions for reconsideration must be
physically received in our clerk’s office within ten
days of the date of decision to be deemed timely filed.
https://www.gaappeals.us/rules
DEADLINES ARE NO LONGER TOLLED IN THIS
COURT. ALL FILINGS MUST BE SUBMITTED WITHIN
THE TIMES SET BY OUR COURT RULES.
March 16, 2022
In the Court of Appeals of Georgia
A21A1576. A & M HOSPITALITIES LLC et al. v.
ALIMCHANDANI.
DOYLE, Presiding Judge.
In the third appearance of this case before this Court,1 A & M Hospitalities,
LLC; JDS&J Enterprises, LP; David B. Motley; Jane P. Motley; MotManco, Inc.;
MotManco, LLC; JPM Advertising, Inc.; and DJ Land & Development, LLC,
(collectively, “the defendants”) appeal the trial court’s orders: granting Prenita
Alimchandani (“the plaintiff”) leave to file a second amended complaint (“SAC”)
1
See A&M Hospitalities v. Alimchandani, 351 Ga. App. 310 (828 SE2d 615)
(2019) (“Alimchandani I”) (affirming the trial court’s appointment of Christopher
Cohilas as an auditor), cert. denied Feb. 10, 2020; A&M Hospitalities et al. v.
Alimchandani, 359 Ga. App. 271 (856 SE2d 704) (2021) (“Alimchandani II”)
(affirming the trial court’s confirmation of the arbitration award and reversing the
orders appointing Cohilas as a “special master/auditor” and requiring the defendants
to pay his auditor fees prior to final judgment).
instead of dismissing the case based on res judicata; denying the defendants’ motion
to stay litigation and granting the plaintiff’s motion to stay the 2020 arbitration;
denying the defendants’ motion to recuse; and granting the plaintiff’s motion to
appoint a receiver. For the reasons that follow, we reverse and remand the case.
This case has a protracted procedural history as relayed in Alimchandani I:
The record shows that Alimchandani and Jane and David Motley jointly
created A&M in 1998 to develop and operate a Hampton Inn in Lake
Park, Georgia. Originally, Jane Motley owned a 75 percent interest in
A&M and Alimchandani owned 25 percent. From the beginning,
operational control and decision making for A&M was vested with Jane
Motley, who was designated A&M’s manager. In 2006, half of Jane
Motley’s 75 percent interest was transferred to David Motley, and then
the interests of Jane and David Motley were both transferred to JDS&J
Enterprises, LP, a limited partnership comprising of Jane and David
Motley and their children. At the same time, David Motley was made a
co-manager of A&M with Jane Motley.
In October 2017, Alimchandani filed the instant lawsuit against . . . the
defendants[], seeking the judicial dissolution of A&M and raising claims
of breach of fiduciary duties and violations of Georgia’s Racketeer
Influenced and Corrupt Organizations Act (“RICO”), OCGA § 16-14-1
et seq. In her complaint, Alimchandani alleged that between 2008 and
2014, the Motleys misappropriated, wasted, and abused A&M’s assets,
failed to make required distributions to her as a partner of A&M, failed
2
to provide her with notice of the transfer of Jane Motley’s interest to
David Motley and JDS&J Enterprises, LP, failed to provide her with
required financial information, threatened the employment of
Alimchandani’s husband (a hotel operations manager at A&M), failed
to hold annual meetings, and failed to communicate with her or deal in
good faith. Alimchandani alleged that this conduct occurred in an
apparent effort to freeze her out of A&M and to transfer business away
from A&M to other companies owned by the Motleys and in which
Alimchandani did not have an ownership interest.
At the same time that she filed the complaint, Alimchandani also filed
a motion for the appointment of a receiver and related injunctive relief,
alleging that she would be “subjected to immediate and irreparable
injury, loss and damage” if A&M was not placed in a receivership.2
On November 22, 2017, the defendants moved to compel arbitration pursuant
to the arbitration clause in the parties’ Operating Agreement. The plaintiff opposed
the motion, and the trial court denied it without explanation in July 2018. On January
17, 2018, while her opposition to the defendant’s motion to compel arbitration
remained pending, the plaintiff switched gears and filed a demand for arbitration with
AAA.
2
Alimchandani I, 351 Ga. App. at 310-311.
3
In July 2018, the trial court appointed Christopher Cohilas as “receiver” “for
the purposes of audit and discovery,”3 ordering “that Cohilas was to receive
‘reasonable compensation’ for his services, paid by A&M.”4 Following the August
2018 AAA arbitration, the arbitrator issued a final award on September 28, 2018,
finding in favor of the defendants on all claims and awarding them damages in the
amount of $95,093.52, which included $70,800 for attorney fees.5 On October 1,
2018, the defendants moved to confirm the award, and on December 28, 2018, the
plaintiff moved to vacate it.6
On November 30, 2018, the plaintiff filed an amended complaint seeking
judicial dissolution of the company, appointment of a receiver, and other equitable
relief. Meanwhile, the defendants had appealed the limited receiver order, and on
May 15, 2019, this Court affirmed the appointment, “concluding that based on the
3
Id. at 312.
4
Alimchandani II, 359 Ga. App. at 271-272.
5
See id. at 272.
6
See id.
4
language of the order, the trial court had actually appointed Cohilas as an auditor, not
a receiver, and that the appointment was not an abuse of discretion.”7
During the pendency of the appeal, the defendants filed a motion to clarify the
appointment order.8 Upon remand on June 14, 2019, the defendants moved for
summary judgment, arguing that all of the plaintiff’s claims were or could have been
asserted in the arbitration. The record does not reflect a ruling on the defendants’
summary judgment motion.
On October 7, 2019, the trial court issued an order (“the special master/auditor
order”) clarifying Cohilas’s appointment, explaining that Cohilas
was appointed as an auditor and special master as those terms are
contemplated and authorized by OCGA §§ 9-7-1, 9-7-2, 9-7-3, and
Uniform Superior Court Rule 46. Specifically, the court vested Cohilas
with authority to, among other things: conduct an accounting of A&M;
hear motions, allow amendments, and pass upon all questions of law and
fact; address all pretrial and discovery matters; monitor implementation
of and compliance with all orders of the court, and he is permitted to
impose upon a party any non-contempt sanction provided by OCGA §§
9-11-37 and 9-11-45; conduct all trial proceedings and make and
recommend findings of fact on all issues to be decided by the court
7
Id.
8
See id.
5
without a jury; and engage in ex parte communications with the parties,
counsel, and the trial court for certain purposes. The special
master/auditor order also restated the payment provision in the initial
order, with minor changes.9
Thereafter, on October 23, 2019, the plaintiff moved for leave to file the SAC
adding several causes of action against the then-existing defendants and adding as
parties MotManCo., Inc.; MotManCo, LLC; JPM Advertising, LLP; and DJ Land
Development, Inc. On December 6, 2019, after the defendants filed a mandamus
petition in superior court, and more than a year after the defendants moved for
confirmation of the award, the trial court confirmed the arbitration award.10 The
defendants appealed the special master/auditor appointment order on December 6,
2019, and the plaintiff appealed the confirmation on December 17, 2019.11
On February 17, 2020, Cohilas entered an order granting the plaintiff’s motion
for leave to file the SAC.12 On June 1, 2020, the defendants filed an arbitration
demand with AAA demanding that the plaintiff arbitrate the claims raised in her SAC
9
Id. at 272-273.
10
See id. at 273.
11
The appeals were consolidated in Alimchandani II, 359 Ga. App. at 273.
12
The trial court approved the February 17, 2020 order on June 15, 2020.
6
and moved to stay the litigation pending arbitration. On June 17, 2020, the plaintiff
moved to stay arbitration. On August 13, 2020, the trial court entered an order staying
arbitration and denying the defendants’ motion to stay the litigation, finding that
defendant A&M had waived its purported right to compel arbitration by “faili[ng] to
challenge the portion of the [c]ourt’s 2018 [o]rder [d]enying [a]rbitration on appeal.”
On October 1, 2020, the defendants filed a motion to disqualify and recuse the
trial judge, alleging that he had directed the superior court clerk to not transmit the
record to this Court even though the record in Alimchandani II was ready. On
November 13, 2020, the trial court denied the motion without assigning the recusal
motion to another judge.
On January 26, 2021, the trial court appointed a receiver “to oversee . . .
A&M’s assets, accounts, and all other interests currently owned by . . . A&M,
including all of its subsidiaries” and to turn over to him
all assets, wherever located, in their entirety and unaltered, including but
not limited to A&M’s hotels, properties, assets, M3 accounting software,
documents, books and records, checks, certificates of deposit, financial
statements, bank accounts, financial instruments, money, receivables,
keys to any and all security boxes and the exact location of said security
boxes, and equipment.
7
In the order, the trial court concluded that “there is a clear and urgent need for a
receiver because . . . there is a significant risk that A&M’s corporate assets, which are
25 [percent] owned by [the p]laintiff will be dissipated,” noting a prior $6 million
transfer from A&M to defendants MotManCo. and JDS&J. The defendants filed the
notice of appeal in the instant case on January 29, 2021.
On March 16, 2021, this Court issued its opinion in Alimchandani II, affirming
the arbitration confirmation order13 but reversing the appointment order, holding that
Cohilas was disqualified as a special master for a multitude of reasons and that he was
performing “fundamentally incompatible duties . . . at odds with the role of a special
master.”14 This Court also held that the trial court erred by requiring the defendants
to pay Cohilas’s auditor fees prior to final judgment.15
On May 6, 2021, before the remittitur in Alimchandani II was issued, the trial
court entered a sua sponte order to “address” this Court’s March 16, 2021 opinion and
13
See id. at 277-283 (3).
14
Id. at 274-276 (1).
15
See id. at 276-277 (2).
8
“provide guidance to the parties.”16 Therein, the trial court “formally remove[d]” from
Cohilas any special master responsibilities in light of the appointment of a receiver,
noting that the court would perform any additional judicial functions going forward.
The court also addressed the auditor fees, stating that contrary to this Court’s holding,
the defendants had not been previously required to advance payments for fees to
Cohilas; instead the prior fee awards “were ‘interim allocations’ which the [c]ourt
will ultimately consider and assess in a final judgment” as “intended by the statutory
framework.”17
On June 25, 2021, the defendants filed in this Court a petition for mandamus
against the trial court judge, Brian A. McDaniel, seeking an order (1) compelling him
to vacate his May 6, 2021 order, which they allege conflicts with this Court’s opinion
in Alimchandani II; (2) directing the return, bond, or escrow of all fees the defendants
16
We note that the trial court lacked jurisdiction to issue the order before the
remittitur was issued, further exacerbating the procedural confusion in this case by
failing to stay the litigation pending appeal. See Massey v. Massey, 294 Ga. 163, 166
(3) (751 SE2d 330) (2013) (“[A]n appellate court maintains jurisdiction over a case
until it has issued the remittitur and the remittitur has been received and filed in the
clerk’s office of the court below. Only then does the trial court regain jurisdiction to
take further action with respect to the judgment appealed.”) (citation and punctuation
omitted).
17
The court “affirm[ed]” the past fee awards as “fee allocation awards” and
indicated that it would continue to consider future interim fee applications by Cohilas.
9
were required to pay to Cohilas; and (3) directing that Cohilas be removed and
disqualified from serving in this matter.18
1. Res judicata. The defendants contend that res judicata bars the plaintiff’s
claims raised in the SAC. We agree.
(a) As an initial matter, we reject the plaintiff’s argument that this issue is not
ripe because the trial court has not yet ruled on it. After the defendants moved for
summary judgment on the basis of res judicata in June 2019, the plaintiffs filed the
motion for leave to file the SAC in October 2019. In June 2020, the trial court granted
the plaintiff’s motion for leave to file the SAC without ruling on the summary
judgment motion. The court went on to stay arbitration of the claims raised in the
SAC, deny the defendants’ motion to stay litigation of those claims, deny the
defendants’ motion to recuse, appoint a receiver, and issue the May 2021 order
referring to the receiver and noting that the court intended to rule on future judicial
functions. These actions, combined with the trial court’s apparent refusal to rule on
the summary judgment that has been pending for over two years, made it apparent
that the trial court is permitting the plaintiff to pursue the claims raised in her SAC
18
The defendants filed the petition for mandamus in Case No. A20A1688,
which appeal was addressed in Alimchandani II, 359 Ga. App. at 275-283. The
petition remains pending.
10
and rejecting the defendants’ res judicata arguments.19 Indeed, without such an
implicit ruling, the need for and purpose of the trial court’s additional orders are
inexplicable.
(b) We now turn to the issue presented. “Res judicata acts as a procedural bar
to claims that were raised or could have been raised in a prior action.”20 Pursuant to
OCGA § 9-12-40, “[a] judgment of a court of competent jurisdiction shall be
conclusive between the same parties and their privies as to all matters put in issue or
which under the rules of law might have been put in issue in the cause wherein the
judgment was rendered until the judgment is reversed or set aside.”
19
See, e.g., Tyler v. Thompson, 308 Ga. App. 221, 223 (2) (b) (707 SE2d 137)
(2011) (finding that “it is presumed that the court implicitly denied . . . motions to
compel [when it granted] summary judgment” and affirming trial court’s judgment)
(punctuation omitted); Yates v. CACV of Colorado, 303 Ga. App. 425, 433 (3) (693
SE2d 629) (2010) (affirming “the trial court’s implicit denial” of motion to vacate
arbitration award); Ades v. Werther, 256 Ga. App. 8, 9-10 (1) (567 SE2d 340) (2002)
(disagreeing with the trial court’s “implicit” finding that a contract existed); State v.
Blackwell, 245 Ga. App. 135, 142 (2) (d) (537 SE2d 457) (2000) (holding that record
supports the trial court’s “implicit[]” finding of bad faith).
20
Bryan County v. Yates Paving & Grading Co., 281 Ga. 361, 363 (638 SE2d
302) (2006). We note that the issue of the res judicata effect of a previous arbitration
on a subsequent arbitration is a matter for determination by the trial court. See id. at
363-364.
11
“There are three prerequisites to the application of res judicata: (1) identity of
the cause of action; (2) identity of the parties or their privies; and (3) a previous
adjudication on the merits by a court of competent jurisdiction.”21
Res judicata applies even if some new factual allegations have been
made, some new relief has been requested, or a new defendant has been
added. It is only where the merits were not and could not have been
determined under a proper presentation and management of the case that
res judicata is not a viable defense. If, pursuant to an appropriate
handling of the case, the merits were or could have been determined,
then the defense is valid.22
Here, the third prong – a previous adjudication on the merits by a court of
competent jurisdiction – was satisfied by the prior arbitration.23 The first prong –
21
Smith v. Lockridge, 288 Ga. 180, 185 (4) (702 SE2d 858) (2010).
22
(Citations and punctuation omitted; emphasis in original.) Yates Paving &
Grading Co. v. Bryan County, 287 Ga. App. 802, 805 (2) (652 SE2d 851) (2007),
citing Dalton Paving & Constr. v. South Green Constr. of Ga., 284 Ga. App. 506, 508
(643 SE2d 754) (2007), Green v. Bd. of Directors of Park Cliff Unit Owners Assn.,
279 Ga. App. 567, 569 (2) (631 SE2d 769) (2006), Bennett v. Cotton, 244 Ga. App.
784, 785 (1) (536 SE2d 802) (2000), Piedmont Cotton Mills v. Woelper, 269 Ga. 109,
110 (498 SE2d 255) (1998).
23
See Yates Paving, 287 Ga. App. at 805 (2) (“The doctrine of res judicata
applies to arbitration proceedings and prevents re-litigation of matters that were or
could have been litigated in a previously-adjudicated action.”) (citation and
punctuation omitted).
12
identity of the cause of action – is also satisfied. The arbitration clause in the parties’
contract expressly covers “[a]ny dispute, controversy[,] or claim arising out of or in
connection with, or relating to the [A&M Operating] Agreement.” The defendants
moved to compel arbitration of all claims raised in the initial complaint, and after the
plaintiff objected, the trial court denied the motion. The plaintiff then filed an
arbitration demand with AAA naming A&M and JDS&J as respondents and seeking
“immediate and instant dissolution of” A&M. She later amended the demand,
alleging that JDS&J “breached numerous terms of the Operating Agreement,
fiduciary duties owed to [her],” including “looting of company assets” and “financial
manipulation,” and that JDS&J and the Motleys breached their fiduciary duties to her.
In the final award, the arbitrator ruled that the plaintiff “cannot succeed on the
[d]issolution [c]laim,” rejecting her breach of fiduciary duty claims against JDS&J.24
The arbitrator also found in favor of JDS&J on its counterclaim alleging that the
plaintiff breached the operating agreement and awarded it $95,093.52 in damages.
24
The arbitrator did not rule on the issue of whether the Motleys owed the
plaintiff a fiduciary duty because they were not parties to the arbitration agreement,
and therefore, it was beyond the scope of the proceeding.
13
“All claims for relief that concern ‘the same subject matter’ must be raised.
Any claims for relief concerning the same subject matter that are not raised are
thereafter barred under OCGA § 9-12-40.”25 The phrase “arising out of” in the
arbitration clause “is broad enough to encompass” the claims raised by the plaintiff
in the SAC.26 The claims raised in the SAC all allege that the defendants impaired the
plaintiff’s rights and interests under the operating agreement and either were or could
have been raised in the arbitration.27
25
(Citation omitted; emphasis in original.) Bennett, 244 Ga. App. at 786 (1),
quoting Lawson v. Watkins, 261 Ga. 147, 149 (2) (401 SE2d 719) (1991).
26
Bennett, 244 Ga. App. at 786 (1).
27
The SAC alleges the following claims: Counts I and IV (breach of fiduciary
duty), raised in the arbitration; Count II (RICO), based on the same allegations
already raised; Count III (dissolution), made in the arbitration; Counts V & VI
(conversion and fraudulent transfers), involving allegations of misappropriation made
in the arbitration; Count VI (civil conspiracy) alleges a conspiracy among the
defendants, including the new ones that the plaintiff alleges are in privity with the
arbitration defendants; Count VII (fraudulent misrepresentation), based on conduct
occurring between 2009 and 2013; Count VIII (fraudulent concealment), alleging that
the defendants failed to provide the plaintiff with financial information, allegations
that were raised in the arbitration; Count X (unjust enrichment), seeking recovery for
misdeeds alleged in the arbitration; Count IX (fraudulent transfer), raised in the
arbitration; Count XI (attorney fees), derivative of earlier claims. None of the claims
raised in the SAC involve conduct occurring after the arbitration award was entered
in September 2018.
14
Finally, the second prong – identity of the parties or their privies – is also
satisfied. The plaintiff repeatedly alleged in the SAC that all of the defendants in this
action have a “unity of interest and/or ownership” with and are “alter egos” of
JDS&J, A&M, and each other. “‘[P]rivies are all persons who are represented by the
parties and claim under them, all who are in privity with the parties; the term privity
denoting mutual or successive relationship to the same rights of property.’”28 And the
fact that the defendants other than A&M and JDS&J were not technically parties to
the arbitration does not preclude application of res judicata.29 Thus, the identity of
parties or their privies requirement has been met.
Res judicata requires that a party assert all claims that arise out of
the underlying facts in one proceeding. [The plaintiff . . . was] required
to seek recovery in one proceeding against [the defendants] for all [her]
claims arising out of the [operating agreement]. [She] may not hold
some claims in abeyance while others are submitted to binding
arbitration.30
28
Bennett, 244 Ga. App. at 786 (1), quoting Monroe v. Kersey, 207 Ga. App.
108, 109 (5) (427 SE2d 80) (1993).
29
See Bennett, 244 Ga. App. at 785 (1); Dalton Paving, 284 Ga. App. at 508.
30
Bennett, 244 Ga. App. at 787 (1) We reject the plaintiff’s argument that the
defendants somehow waived their right to argue res judicata because they limited the
scope of the arbitration. The defendants initially sought to arbitrate all of the claims,
and the plaintiff objected. She later filed an arbitration demand, and she was the party
15
Therefore, the claims raised in the SAC are barred.
2. Recusal. The defendants argue that the trial court erred by failing to assign
the recusal motion to another judge and denying the motion. We agree.
In their recusal motion, the defendants reiterate that it took the trial court more
than a year to rule on their request for confirmation of the arbitration award, doing so
only after they filed a mandamus petition in superior court seeking a ruling on the
confirmation. The defendants filed their notice of appeal in Alimchandani II on
December 17, 2019, 11 days after the entry of the order confirming the arbitration
award. After a delay of several months, the plaintiff finally paid the bill of costs on
June 26, 2020, after the defendants filed a motion to dismiss the appeal. The
defendants attached to the recusal motion the affidavits of two of their attorneys, who
averred that on September 24, 2020, one of them called the clerk’s office to inquire
about the delay in transmitting the record on appeal; the Deputy Clerk of Court
advised that “while the record had been ready for some time, he had not forwarded
it the Georgia Court of Appeals at the direction of Judge Brian McDaniel[, the trial
that dictated the scope of the proceeding, electing to include less than all of her
claims or defendants. The fact that the defendants held her to that during the
arbitration does not constitute waiver.
16
judge presiding over the case]” and “that he was instructed to hold the record by
Judge McDaniel’s office until further notice.” According to counsel, defendants were
never advised of the court’s directive to the clerk, and they have been ordered to pay
“hundreds of thousands of dollars” to Cohilas while awaiting a ruling on their
motions and transmission of the record to this Court.
The trial court denied the recusal motion without sending it to another judge,
concluding that the affidavits submitted by the defendants
are legally insufficient to support a motion to disqualify or recuse
because the affidavits fail to set forth allegations of “bias stemming from
extra-judicial conduct or statements.”. . . Even taking the affidavits as
true, they fail to show a bias that may result in an opinion on the merits
on some basis other than what the judge learned from his participation
in the case. . . . [The d]efendants’ affidavits acknowledge that the reason
for the [c]ourt’s delay in transmitting the appeal record to the Georgia
Court of Appeals was their June 4, 2020 motion to dismiss the appeal.
. . . None of the affidavits describe any statement by the [c]ourt or other
action (apart from the delay in record transmission) which they contend
evidences bias. . . . Even if all the facts alleged in [the d]efendants’
affidavits were true, and the Superior Court in purported error caused
there to be a delay in the transmission of the record on appeal, such error
17
does not show an intense bias that prevents [the d]efendants from
receiving impartial treatment.31
On appeal, the defendants argue that the trial court’s “secret directive” to the
clerk requires his disqualification/recusal and that the court erred by denying the
recusal motion without submitting it to another judge for consideration pursuant to
Uniform Superior Court Rule (“USCR”) 25.3.
“It is vital to the functioning of the courts that the public believe in the absolute
integrity and impartiality of its judges, and judicial recusal serves as a linchpin for the
underlying proposition that a court should be fair and impartial.”32 USCR 25 sets
forth the formal procedure governing recusal of superior court judges:
USCR 25.3 directs that when the trial judge assigned to a case is
presented with a recusal motion and an accompanying affidavit, “the
judge shall temporarily cease to act upon the merits of the matter” and
determine “immediately”: (1) whether the motion is timely; (2) whether
the affidavit is legally sufficient; and (3) whether the affidavit sets forth
facts that, if proved, would warrant the assigned judge’s recusal from the
31
(Citation and punctuation omitted.) The trial court further noted that the
recusal motion was “moot” because the Clerk had since transmitted the record to this
Court.
32
(Citation omitted.) Mayor & Aldermen of the City of Savannah v.
Batson-Cook Co., 291 Ga. 114, 114 (728 SE2d 189) (2012).
18
case. If all three criteria are met, “another judge shall be assigned to hear
the motion to recuse.” The decision about referring a recusal motion for
reassignment to another judge does not involve an exercise of discretion
by the judge whose recusal is sought. Rather, whether the three
threshold criteria have been met is a question of law, which an appellate
court reviews de novo.33
The plaintiff is correct that “[a]llegations consisting of bare conclusions and
opinions that the assigned judge is biased or prejudiced for or against a party . . . are
not legally sufficient to support a recusal motion or to justify forwarding the motion
for decision by another judge.”34 Nevertheless, “[i]n all other respects, . . . the
assigned judge must take the motion at face value, treating it as though ‘all of the
facts set forth in the affidavit are true.’”35
[When] deciding whether this assumed state of facts would require
recusal, USCR 25.3 says that the assigned judge is to be guided by . . .
Rule 2.11 of the revised Code of Judicial Conduct that took effect on
January 1, 2016.
33
(Citations omitted.) Mondy v. Magnolia Advanced Materials, Inc., 303 Ga.
764, 766 (2) (815 SE2d 70) (2018).
34
(Punctuation omitted.) Id. at 767 (2).
35
Id. at 767 (2), quoting USCR 25.3.
19
Rule 2.11 (A) in the revised Code says generally that “judges shall
disqualify themselves in any proceeding in which their impartiality
might reasonably be questioned,” followed by a non-exclusive list of
specific situations in which recusal is required. . . . The standard is an
objective one. The facts must be considered from the perspective of a
reasonable person rather than from the perception of interested parties
or their lawyer-advocates, or from the subjective perspective of the
judge whose continued presence in the case is at issue. The operative
question is whether a fair-minded and impartial person would have a
reasonable perception of a judge’s lack of impartiality based upon
objective facts set forth in the affidavit or reasonable inferences
therefrom.
If the motion and affidavit, taken at face value, satisfy the three
threshold criteria, the assigned judge must refer the motion for
reassignment and may not oppose the motion. The judge whose recusal
is sought may not respond to the motion or attempt to refute the
allegations, which stand denied automatically, no matter how false or
even defamatory the judge might know or perceive the allegations to
be.36
Here, assuming the truth of the facts alleged, the affidavits constitute evidence
that the trial court, without notifying the parties, contacted the clerk’s office and
directed that it delay transmission of the record to this Court in a case that had already
36
(Citations and punctuation omitted.) Id. at 767-768 (2).
20
suffered an unduly lengthy delay, during which the defendants were required to pay
large sums of money to a receiver appointed by the court after the defendants
prevailed at arbitration and were merely awaiting confirmation. Moreover, the trial
court attempted to explain its actions in the order denying the motion, which it is
prohibited from doing. And the trial court slightly, but crucially, mischaracterized the
defendants’ allegations regarding the cause of the delay. The defendants alleged that
the trial court clerk remarked that the delay in forwarding the record on appeal “might
have had something to do with a . . . June 4, 2020 Motion to Dismiss [the plaintiff’s
appeal[,]” but the trial court affirmatively stated that the defendants “acknowledge[d]
that the reason for the [c]ourt’s delay in transmitting the appeal record . . . was their
June 4, 2020 motion to dismiss the appeal.” (Emphasis supplied.) Under these
circumstances, the defendants’ recusal motion should have been referred for
reassignment to another judge.37 But “[w]e see no need to remand [this] case[] for
such reassignment.”38 By advancing a factual claim in opposition to the recusal
37
See Butler v. Biven Software, 222 Ga. App. 88, 90 (1) (473 SE2d 168) (1996)
(holding that allegations of a “secret” or “ex parte” order by the judge “raise[]
genuine questions of fact involving the trial judge’s own actions, and this trial judge
could not sit as trier of fact on allegations concerning his own actions”).
38
Post v. State, 298 Ga. 241, 258 (3) (b) (779 SE2d 624) (2015).
21
motion and mischaracterizing the defendants’ allegation regarding the reason for the
delay, the trial court evaluated and accepted the truth of his own factual allegations,
mandating his recusal. As the Supreme Court of Georgia has explained,
a judge cannot become actively involved in presenting evidence or
argument against a motion seeking his recusal without that defense itself
becoming a basis for recusal, [because] a judge who personally refutes
a party’s allegations of judicial bias may appear to a reasonable person
to have exhibited a personal interest in the outcome of the litigation, or
to have aligned himself with the party resisting the judge’s
disqualification, and that by attempting to refute a charge of bias, a
judge may become – or appear to have become – an adversary of the
party seeking his disqualification.39
Accordingly, we reverse the order denying the defendants’ motion for recusal
and remand the case to the trial court with direction that the case be reassigned to a
new judge to continue with any additional necessary proceedings (e.g., judgment,
determination of fees for receiver/special master/auditor).40
39
(Citations and punctuation omitted.) Id. at 257 (3) (b), citing Isaacs v. State,
257 Ga. 126, 128 (355 SE2d 644) (1987) and quoting Richard E. Flamm, Judicial
Disqualification: Recusal and Disqualification of Judges § 15.7, at 435 (2d ed. 2007).
40
See Butler, 222 Ga. App. at 90-91 (2). We observe that in his sua sponte
order following our opinion in Alimchandani II – filed before the remittitur was
issued – the trial court attempted to explain his rationale and made rulings in violation
of this Court’s opinion. That order is the subject of a mandamus petition filed in this
22
3. Receivership. Based on our holding in Division 1, this case is now over, with
the exception of determining fees for Cohilas and the special master. And all orders
issued subsequent to the order denying the defendants’ motion to recuse, including
the order appointing a receiver, are void.41 Thus, the defendants’ arguments regarding
receivership are moot.
4. Motions to stay litigation and compel arbitration. Our holding in Division
1that the SAC is barred by res judicata renders this enumeration of error moot.
Judgment reversed and case remanded. McFadden, P.J., concurs fully and
specially. Hodges, J., concurs in part and dissents in part.
Court by the defendants. We note that the Office of the Attorney General, at Judge
McDaniel’s request, filed a brief on his behalf in the mandamus action in this Court,
despite the fact that the plaintiff had already filed a brief in opposition to the
mandamus petition. Clearly, at this point, the trial court judge has become “an
adversary of the party seeking his disqualification.” Post, 298 Ga. at 257 (3) (b)
quoting Flamm, supra.
41
See Butler, 222 Ga. App. at 90-91 (2). The defendants’ mandamus petition
arising out of the trial court’s sua sponte order is dismissed as moot.
23
A21A1576. A & M HOSPITALITIES LLC et al. v.
ALIMCHANDANI.
MCFADDEN, Presiding Judge, concurring fully and specially.
I concur fully in the majority opinion. And I agree that our decision in this case
moots the petition filed in Case No. A20A1688, which sought to invoke our original
mandamus jurisdiction. So I concur in the dismissal of that petition as moot.
That disposition removed the necessity of resolving the novel issues raised by
that mandamus petition. Normally there would be nothing more to say about those
issues. But the uncertainties regarding the scope of our original mandamus
jurisdiction and regarding the proper way to invoke it are great enough that I think it
useful to outline those issues. I also write to emphasize the importance of auditors,
receivers, and special masters to the efficient functioning of our judiciary.
1. Our original mandamus jurisdiction.
As explained in the majority opinion, after we entered our opinion in A&M
Hospitalities v. Alimchandani, 359 Ga. App. 271 (856 SE2d 704) (2021), the trial
court sua sponte issued an order in which he disputed our reasoning and announced
that he would proceed contrary to our holding. A&M Hospitalities filed the
mandamus petition in response to that order.
Our Constitution provides that we have original mandamus jurisdiction in part
“to protect or effectuate [our] judgments.” Ga. Const. of 1983, Art. VI, Sec. I, Par. IV.
provides in part,
Each court may exercise such powers as necessary in aid of its
jurisdiction or to protect or effectuate its judgments; but only the
superior and appellate courts and state-wide business court shall have
2
the power to issue process in the nature of mandamus, prohibition,
specific performance, quo warranto, and injunction.
It is well settled that the scope of the appellate courts’ mandamus jurisdiction
is limited. Generally the way to mandamus a superior court judge is to file a petition
that will be decided by another superior court judge. Graham v. Cavender, 252 Ga.
123 (311 SE2d 832) (1984) (“Being the respondent[], the superior-court judge[] will
disqualify, another superior-court judge will be appointed to hear and determine the
matter, and the final decision may be appealed[.]”). There is no case law identifying
any issues that fall within our mandamus jurisdiction. Here A&M argued that the trial
court’s defiance of our judgment required us to issue a writ of mandamus to “protect
or effectuate [our] judgment[].”
We asked at oral argument whether A&M’s failure to invoke the interlocutory
appeal procedure—at least to request a certificate of immediate review—constituted
failure to employ an available adequate remedy at law. See OCGA § 5-6-34 (b).
A&M’s counsel replied that the mandamus proceeding was not an appeal, that the
appeal had already been heard and decided, and that the question now was whether
our judgment would be effectuated. And indeed our earlier judgment was now the law
of the case. OCGA § 9-11-60 (h).
3
A&M’s counsel offered a similar response when we asked if our jurisdiction
over the case had expired along with the second term of court after it was docketed
here. That question implies another: whether the mandamus petition should have been
filed as a new proceeding—something for which our rules do not presently provide.
We also asked about the line between erroneous administration of one of our
decisions and defiance by the trial court. A&M’s counsel responded that the facts in
this case are not close to the line.
In short, the scope of the appellate courts’ mandamus jurisdiction and the
procedure for invoking it are less than clear. But because the mandamus petition is
dismissed as moot, resolution of these issues in this case would be advisory, so we
cannot resolve them today.
2. Auditors, receivers, and special masters.
Finally, I wish to highlight that the trial court’s original appointment of an
auditor in this case was affirmed by this Court, in which we recognized the inherent
value of “auditors and special masters [who] primarily assist the trial court in
resolving issues in the litigation.” See A&M Hospitalities v. Alimchandani, 351 Ga.
App. 310, 314-316 (1) (828 SE2d 615) (2019). Although a subsequent appointment
order was reversed, see Alimchandani, 359 Ga. App. at 273-276 (1), and the
4
majority’s disposition of this appeal necessarily voids the trial court’s order
appointing a receiver, I do not believe that anything we have said in these cases
should be construed to discourage attorneys from serving as auditors, receivers, or
special masters — critical roles upon which the efficient function of our judiciary
depends. See, e.g., Cordoza v. Pacific States Steel Corp., 320 F3d. 989, 995 (I) (9th
Cir. 2003) (“A special master is a ‘surrogate’ of the court ‘and in that sense the
service performed is an important public duty of high order in much the same way as
is serving in the Judiciary.”) (citation omitted).
5
A21A1576. A & M HOSPITALITIES LLC et al. v.
ALIMCHANDANI.
HODGES, Judge, concurring in part and dissenting in part.
1. Res judicata. I concur fully in Division 1 (a) of the majority opinion. I agree
that, based upon the authority cited by the majority, we may address the defendants’
arguments concerning the application of res judicata. I also concur fully in Division
1 (b) to the extent the majority holds that res judicata bars claims based upon actions
and conduct that could have been addressed in the plaintiff’s original complaint, the
first amended complaint, or the arbitration. However, I do not agree that claims raised
in the plaintiff’s second amended complaint that arose after the final arbitration award
are barred by res judicata and would, instead, allow those claims to proceed.
2. Recusal. Furthermore, I do not believe that the trial court’s order denying the
defendants’ motion to recuse “advanc[ed] a factual claim in opposition to the recusal
motion” or demonstrated an “[attempt] to explain its actions. . . .” Therefore, I also
disagree with the majority’s decision to recuse the original trial judge without a
remand because I do not think the trial judge went so far as to refute the allegations
made in defendants’ affidavits in support of their motion to recuse. Rather, I would
remand the recusal issue to the trial court, for assignment to a another superior court
judge, to review whether the original trial judge should have recused or was correct
in denying the defendants’ motion to recuse.1
The circumstances in Post v. State, which justified the reversal of the trial
court’s denial of a motion to recuse and which are relied upon by the majority to
preclude a remand, are far different from the present case. 298 Ga. 241, 254 (3) (a)
1
Of course, I express no opinion as to what the result of the reviewing judge’s
analysis should be on remand.
2
(779 SE2d 624) (2015).2 In Post, the record contained a transcript from a hearing on
a recusal motion in which the original trial judge argued with counsel and disputed
certain factual allegations in the motion. Id. at 255-256 (3) (a). Our Supreme Court
noted that “a judge considering a motion seeking his recusal must evaluate the motion
and accompanying affidavit solely on their face and assume that the facts set forth in
the affidavit are true, even if the judge knows them to be false or incomplete;
consideration of additional evidence is inappropriate at this point in the process.” Id.
at 256 (3) (b). Where the record clearly demonstrates that the trial judge ventured
beyond this framework, as in Post, we need not remand the case because “the judge
to whom the motion should have been referred would have had no choice based on
those facts but to grant the motion and order [the original trial judge’s] recusal. . . .”
Id. at 258 (3) (b). I wholeheartedly agree, but those circumstances are simply not
present in this case.
Instead, all we have is an order entered by the trial court denying the
defendants’ recusal motion based upon their alleged failure to satisfy the threshold
2
Post involved three defendants — Post, Brown, and Fripp. The facts in this
case are more analogous to those reviewed in Division 2 of Post (involving defendant
Post), which I believe controls the outcome in this case. In contrast, the majority
resolves this case based upon Division 3 of Post (involving defendants Brown and
Fripp), but those facts are more egregious and are dissimilar to the facts in this case.
3
requirements of such a motion. However, as the majority correctly notes, a close
reading of the trial court’s order does reveal an important mischaracterization: the
defendants’ affidavits filed in support of the recusal motion indicated that the trial
court clerk remarked that the delay in forwarding the record on appeal “might have
had something to do with a . . . June 4, 2020 Motion to Dismiss [the plaintiff’s
appeal,]” while the trial court stated affirmatively that the defendants
“acknowledge[d] that the reason for the Court’s delay in transmitting the appeal
record . . . was their June 4, 2020 motion to dismiss the appeal.” (Emphasis supplied.)
Stated differently, the defendants’ affidavits, based upon a statement from a trial court
clerk, aver that they were told that their motion to dismiss may have caused a delay
in submitting the record on appeal, while the trial court’s order claims that the
defendants admitted that a delay occurred and that their motion to dismiss was indeed
the culprit.
The trial court’s characterization of the affidavit states that the defendants have
conceded a cause, other than judicial bias, for the delay in transmitting the record for
appeal. This characterization is problematic, because acknowledging that one thing
may have caused another does not foreclose that there may have been other causes.
4
Furthermore, left unanswered is whether this apparent mischaracterization itself
substantiates a claim of bias against the original trial judge.
In my view, and taking the defendants’ recusal motion at face value, both the
trial court’s mischaracterization and an analysis of the potential for bias are issues
that demand review by another superior court judge. In other words, a different
superior court judge should determine why the record on appeal was held and whether
the original trial judge had anything to do with it. To that end, we should follow our
usual practice and remand the case to the trial court for further proceedings, including
the assignment of a reviewing superior court judge. See Post, 298 Ga. at 253 (2) (e);
Uniform Superior Court Rules 25.3, 25.4 (C).
3. Receivership. In view of my proposed resolution of the recusal issue, I must
also dissent to Division 3 because, in the interest of judicial economy, I would reach
the merits of the defendants’ arguments concerning the trial court’s appointment of
a receiver — an analysis the majority forecloses in view of its recusal of the original
trial judge and subsequent finding that all orders entered by the original trial judge
after the denial of the motion to recuse are void — as the receiver appointment issue
5
could well arise on remand depending upon the reviewing superior court judge’s
recusal rulings.3
4. Motions to Stay Litigation and Compel Arbitration. Finally, the need to
resolve any issue concerning the trial court’s order staying the arbitration is tied to
the resolution of the res judicata question. Therefore, to the extent the plaintiff’s
claims are barred, I agree with the majority that the defendants’ arguments are
rendered moot. However, for any claims that are not so precluded, the majority should
address this question.
3
As it is, the judge to whom this case is ultimately assigned should consider
whether there is an ongoing need for a receiver.
6