Trial Court Not Allowed to Compel Board Members To Attend Meeting Or Order A New Quorum Requirement

A trial court overseeing a protracted church dispute waded into the waters of the corporate code as it pertains to two disputing factions of the Kidist Mariam Ethiopian Orthodox Tewahedo Church. The Court of Appeals reversed the trial court's order granting a motion to compel board members attendance at board meetings or in the alternative deeming a simple majority to meet a quorum, which was not in the board's corporate bylaws, reasoning the motion to compel acted as a new injunction that changed and threatened the status quo. See Yakob v. Kidst Mariam Ethiopian Orthodix Tewahedo Church, Inc., A20A1696, 2021 WL 978449 (Ga. Ct. App. Mar. 16, 2021).

Essentially, the Church, set up as a non-profit corporation, operates as a hybrid by submitting to the hierarchal form of the broader church's dictates regarding religious, spiritual, and liturgical matters, but reserving control of its internal affairs as the corporation, which provides the church itself with autonomy. When the board met and voted to terminate the priest, who happens to also serve as the Archbishop o the Diocese of Georgia, Tennessee, South Carolina, North Carolina, and Florida, the church split. Some of the congregation remained loyal to the terminated priest, while others remained loyal to the church itself.

The faction supporting the terminated priest, including certain corporate church board members, took it upon themselves to (1) cancel the termination letter and (2) dissolve the board of the church. These individuals then elected a replacement board and attempted to take control of the church and its property by changing the church building's lock and security code, switching the Church's registration with the Georgia Secretary of State, changing access to the Church's bank accounts, and otherwise acting on behalf of the church. The formal church board (i.e., the one that terminated the priest and was properly sitting as the board prior to the dispute) sued the priest and his new faction.

In 2016, the trial court granted a TRO that established when each group could access the church building and designated the board sitting at the time of the termination as the properly constituted board permitted to continue church business. This board included 7 members who had backed the priest, post-termination. In 2017, the trial court granted a consent interlocutory injunction agreeing to similar terms regarding the board members and that the board, as stated, was the only authorized corporate entity to act as the church.

In 2019, the church filed a motion to compel the 7 board members attendance at board meetings. The church argued that the refusal to attend the board meetings by the 7 members prevented the board from conducting necessary business because the board could not meet quorum requirements. The trial court granted the motion to compel the board members attendance at board meetings and further deemed the quorum requirements met if the majority of board members were present, which was not in the corporate bylaws. The Court of appeals reversed this motion to compel because the relief was wholly distinct from the relief in the TRO and consent interlocutory injunction and therefore acted as a new injunction that changed the status quo.

It is axiomatic that the sole purpose of a temporary or interlocutory injunction is to maintain the status quo pending a final adjudication on the merits of the case. The status quo is not defined by the parties’ existing legal rights; it is defined by the reality of the existing status and relationships between the parties, regardless of whether the existing status and relationships may ultimately be found to be in accord or not in accord with the parties’ legal rights. Hampton Island Founders v. Liberty Capital, 283 Ga. 289, 293 (2008). The party seeking an interlocutory injunction must present evidence that the status quo was endangered and in need of preservation, and a trial court abuses its discretion if it grants the injunction without such showing.” Hipster, Inc. v. Augusta Mall Partnership, 291 Ga. App. 273, 274 (2008).

The Court reasoned that throughout the injunction briefing and arguments the church sought to preserve the status quo to prohibit the replacement board from acting for the church pending resolution of which board was property sitting. Yaakob, 2021 WL 978449 at *7. At no point was the attendance of board members or the quorum requirement argued for those injunctions. With regard to the motion to compel, the church failed to submit evidence that the status quo was in jeopardy or that it would suffer irreparable harm if attendance was not required or the quorum changed. Id. The Court of Appeals accordingly held that the motion to compel was an improper injunction that did not preserve the status quo.

Accidental Failure To Produce Discoverable Information Is Not Sanctionable

The Court of Appeals of Georgia reversed discovery sanctions against a party for failing to disclose an umbrella insurance policy. Foundation Contractors, Inc. v. Home Depot U.S.A., Inc., A20A1771, 2021 WL 977693 (Ga. Ct. App. Mar. 16, 2021). At issue in Foundation was whether the failure to respond to an interrogatory request seeking information on all insurance policies was sanctionable conduct allowing for dismissal/default where Foundation sought a list of all policies in place from its insurer. Id. at *1. However, the insurer only mentioned and gave details on two policies, not including a third umbrella policy that became central to the dispute. Id.

A trial court “has broad discretion in the enforcement of the discovery provisions of the Civil Practice Act, and [] will not interfere with the exercise of that discretion absent clear abuse.” (Punctuation and footnote omitted.) Cameron v. Miles, 311 Ga. App. 753, 754 (1) (716 SE2d 831) (2011). When a party has failed to respond to a document production request or an interrogatory, OCGA § 9-11-37 (d) (1) authorizes a trial court to “make such orders in regard to the failure as are just.” Similarly, “an intentionally false response to a written discovery request, particularly when it concerns a pivotal issue in the litigation, equates to a total failure to respond, triggering OCGA § 9-11-37 (d) sanctions.” Foundation, 2021 WL 977693 at *3 quoting Resurgens, P. C. v. Elliott, 301 Ga. 589, 595-596 (2017).

However, before a trial court may enter the sanction of dismissal it must find that the offending party has acted willfully. Id. When a party accidentally or through involuntary non-compliance fails to act sanctions are such as dismissal and default are not warranted. Id. In Foundation, the court ultimately found that Foundation's attorney requested the pertinent documents and their insurer failed to disclose the existence of the umbrella policy. Id. Further, upon learning of the umbrella policy, Foundation immediately (within 48 hours) notified Home Depot of the policy. Id.

Ultimately, the court found the the fact that the umbrella policy could have been discovered earlier, without more, is insufficient to show willfulness and thereby reversed the sanction. Id. at *4. The court mentioned throughout its opinion that the severity of a sanction of dismissal or default must be considered in determining the willfulness.

Duty to Preserve Evidence Begins When Party Has Actual or Constructive Knowledge of Lawsuit

The Court of Appeals clarified that a party has no duty to preserve evidence if it has no actual or constructive knowledge of a lawsuit. Creek House Seafood & Grill, LLC v. Provatas, A20A1631, 2021 WL 837083 (Ga. Ct. App. Mar. 5, 2021). The Court stated:

Spoliation refers to the destruction or failure to preserve evidence that is relevant to contemplated or pending litigation. Such conduct may create the rebuttable presumption that the evidence would have been harmful to the spoliator. However, in order for the injured party to pursue a remedy for spoliation, the spoliating party must have been under a duty to preserve the evidence at issue. In the case of a defendant, such duty arises when the alleged spoliator has actual or constructive notice that the plaintiff is contemplating litigation

Id. at *2. The Court stated the party received actual notice of impending litigation when that party received a preservation letter 9 days after the injury occurred. Id. The letter demanded video surveillance of the injury be preserved, however, the video surveillance system was set to overwrite footage every 7 days. Id. at *1. Therefore, the party was under no duty to preserve the video footage inside of those 7 days despite the video ending up overwritten. Id. at *3. The sanctions were therefore not permissible causing the Court of Appeals to reverse the award of sanctions contained in its spoliation order. Id. at *4.