Georgia Declines to Adopt "Apex Doctrine" and Allows Plaintiff to Depose CEO of General Motors

In a ruling that will surely have ramifications for litigants in the State of Georgia, the Court of Appeals declined to adopt the Apex Doctrine and affirmed a trial court's refusal to grant a protective order to defendant General Motors seeking to have its CEO protected from giving a deposition in a wrongful death/products liability case. See General Motors, LLC v. Buchanen, A21A0043, 2021 WL 1807308 (Ga. Ct. App. May 6, 2021).

Under the apex doctrine, an individual objecting to a deposition must first demonstrate he is sufficiently high-ranking to invoke the deposition privilege. Upon this showing, the court then considers whether there are “extraordinary circumstances” that justify deposing the high-ranking officials, based on (1) whether the deponent has unique first-hand, non-repetitive knowledge of the facts at issue in the case; and (2) whether the party seeking the deposition has exhausted other less intrusive discovery methods.

Givens v. Newsom, 2021 U.S. Dist. LEXIS 3135, *12 (B), 2021 WL 65878 (E.D. Cal. 2021). The Georgia Court of Appeals stated that while some states have adopted the doctrine, many others have rejected it. General Motors at *4. Namely, no Georgia Court has adopted the doctrine. Id. Further, the Court stated that "the apex doctrine is inconsistent with Georgia's discovery provisions that require a liberal construction in favor of supplying a party with facts." Id. citing O.C.G.A. § 9-11-26(c).

In line with this liberal construction of Rule 26, the Court of Appeals affirmed the denial of the protective order and held that the CEO of General Motors would have to be deposed in this wrongful death/products liability action.

Pursuant to OCGA § 9-11-26 (b) (1), parties to a lawsuit may “obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action, whether it relates to the claim or defense of the party seeking discovery or to the claim or defense of any other party[.]”

However, OCGA § 9-11-26 (c) provides in relevant part that, "[u]pon motion by a party or by the person from whom discovery is sought and for good cause shown, the court in which the action is pending or, alternatively, on matters relating to a deposition, the court in the county where the deposition is to be taken may make any order which justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, including ... (1) That the discovery not be had; [or] (2) That the discovery may be had only on specified terms and conditions, including a designation of the time or place[.]"

General Motors argued that the trial court's denial of the protective order violated the prohibitions against abusive discovery practices because the court failed to acknowledge factors such as whether the CEO has unique knowledge of the issues in the case and whether that information could be obtained by other less-intrusive means. Id. at 3. The court rejected that proposition and stated there is no authority that a "trial court must consider these factors when resolving a motion for a protective order" (emphasis in original). Id.

Instead, the Court stated that the deposition testimony of the CEO is reasonably calculated to lead to the discovery of admissible evidence. Again, the Court discussed the broad concept of relevance to mean "anything that is or may become an issue in the litigation." Id. at *4 citing Ewing v. Ewing, 333 Ga. App. 766, 768 (1), 777 S.E.2d 56 (2015).

Additionally, relying on Osborne v. Bank of Delight, 173 Ga. App. 322, 324 (2), 326 S.E.2d 523 (1985) the Court stated the "potential for harassment or burden 'may be minimized by the imposition of lesser restrictions than the complete foreclosure of the requested discovery.'" Id. at *4. Therefore, by ordering that the deposition take place in Detroit, Michigan, where the CEO works, and limiting it to three hours, there was no potential for abuse or harassment. Id.

This Court of Appeals decision means that the contention that an individual seeking a protective order has no knowledge of the subject matter of the suit must yield to the overriding policy of liberally construing Georgia's discovery law.

Interestingly, Judge Dillard, in a concurrence, states that while he agrees with the majority opinion he does "sympathize with the concerns expressed by General Motors about the potential for litigants to use Georgia's forgiving discovery standards to unduly burden high ranking executives..." Id. at *5. However, he continues that the remedy can only come from the state legislature and "this issue is, to put it plainly, above our pay grade." Id.

Statute Of Limitations For Breach Of Express Warranty Vs. Implied Warranty

As a general rule, contract claims are subject to a six-year statute of limitation. See OCGA § 9-3-24. The “six-year period begins to run on the date the contract is breached and the wrongful acts occur, not the date the actual damage results or is discovered.” Old Republic Nat. Ins. Co. v. Darryl J. Panella, LLC, 319 Ga. App. 274, 276, 734 S.E.2d 523 (2012).

The statute of limitation for breach of implied warranty, like tort claims and breach of sale/construction contracts, begins running on the date of substantial completion. Feinour v. Ricker Co., 255 Ga. App. 651, 653 (1), 566 S.E.2d 396 (2002); accord Wilks v. Overall Constr., Inc., 296 Ga. App. 410, 412 (1), 674 S.E.2d 320 (2009).

The Georgia Court of Appeals recently clarified that when an express warranty is in place, and a defect occurred during the express warranties time period, the statute of limitation does not begin running until the defendant was notified of the alleged defects. Southern States Chemical, Inc. v. Tampa Tank & Welding Inc., A19A0960, 2021 WL 1135479, *5-*6 (Mar. 25, 2021 Ga. Ct. App.). Importantly, even where the facts are in dispute as to whether the defect was actually present within the time period of the express warranty, if a jury could find that the defects were present at that time the statute of limitation begins at the notification period.

On a similar note, the Court reiterated that the statute of limitations is only tolled by "a showing of a separate independent actual fraud involving moral turpitude which deters a plaintiff from filing suit" when the gravamen of the underlying action is not a claim of fraud. Id. at *6-7. Specifically, the party asserting that the statute of limitation should be tolled must show:

[T]hat the defendant concealed information by an intentional act – something more than a mere failure, with fraudulent intent, to disclose such conduct [–] unless there is on the party committing such wrong a duty to make a disclosure thereof by reason of facts and circumstances, or the existence between the parties of a confidential relationship.

Hunter, Maclean, Exley & Dunn, P.C. v. Frame, 269 Ga. 844, 847 (1), 507 S.E.2d 411 (1998) (punctuation and footnote omitted).

Receiver or Auditor Cannot Also Be Appointed As Special Master

The Court of Appeals of Georgia stated that an individual cannot act as both a receiver/auditor and a special master in the same matter because they would be acting as investigator, witness, and judge of fact and law, which would require him to assess the credibility of his own work. A&M Hospitalities, LLC v. Alimchandani, A20A1688, A21A0525, 2021 WL 977848 (Ga. Ct. App. Mar. 16, 2021).

Georgia law distinguishes between the role played by a receiver and an auditor. Id. at *3. A trial court may appoint an auditor in all cases “involving matters of account, if the case shall require it,” “to investigate the matters of account and report the result to the court.” O.C.G.A. § 9-7-3. Thus, “unless modified by the order of appointment,” an auditor generally is granted the authority “to hear motions, allow amendments, and pass upon all questions of law and fact,” including the “power to subpoena and swear witnesses and compel the production of papers.” O.C.G.A. § 9-7-6. And under O.C.G.A. § 9-7-1, the duties previously performed by a ‘master’ in the superior court are now performed by an ‘auditor,’ although ... [USCR] 46, which was adopted effective June 4, 2009, permits the trial court to appoint a special master to perform certain duties enumerated therein. Petrakopoulos v. Vranas, 325 Ga. App. 332, 337-338 (2) (750 SE2d 779) (2013), reversed in part on other grounds by Petrakopoulos v. Vranas, 296 Ga. 48 (764 SE2d 858) (2014).

USCR 46 (A) (1) permits a trial court to:

appoint a [special] master: (a) to perform duties consented to by the parties; (b) to address pretrial and post-trial matters that the court cannot efficiently, effectively or promptly address; (c) to provide guidance, advice and information to the court on complex or specialized subjects, including, but not limited to, technology issues related to the discovery process; (d) to monitor implementation of and compliance with orders of the court or, in appropriate cases, monitoring implementation of settlement agreements; (e) to investigate and report to the court on matters identified by the court; (f) to conduct an accounting as instructed by the court and to report upon the results of the same; (g) upon a showing of good cause, to attend and supervise depositions conducted outside of the jurisdiction; and (h) to hold trial proceedings and make or recommend findings of fact on issues to be decided by the court without a jury if appointment is warranted by (i) some exceptional condition, or (ii) the need to perform an accounting, to resolve a difficult computation of damages or if the matter involves issues for which a special substantive competence would be beneficial.

USCR 46 (A) (2) provides:

A master must not have a relationship to the parties, counsel, action, or court that would require disqualification of a judge under applicable standards, unless the parties consent with the court’s approval to appointment of a particular person after disclosure of all potential grounds for disqualification.

Lastly, O.C.G.A. § 24-6-605 prohibits a judge from testifying as a witness in a matter before him. Similarly, the Code of Judicial conduct prohibits a judge from participating in a matter in which he has “personal knowledge of disputed evidentiary facts” or if he has been a witness in the proceedings. Ga. Code of Judicial Conduct, Canon 2.11 (A) (1), (6).

The Court held that since the requirements of each duty as to an auditor, receiver, and special master would have the individual performing factual inquiries, testifying as to those inquiries, and then making decisions and issuing the judge recommendations as to those inquiries, the duties must be given to separate individuals.