The Court of Appeals of Georgia has sent a case back to the trial court after ruling that the lower court made a mistake in striking an affidavit from the landlords’ attorney. The case involves a dispute between landlords and a property management company, Evernest Holdings, LLC, over defaulted leases.
The Core of the Dispute
Evernest, a company managing rental properties, had contracts with Metro Holdings, LLC and Brookwood Assets, LLC (the landlords) to manage their properties in the Atlanta area. The contracts required Evernest to handle things like marketing and processing rental applications, including credit checks. However, the contracts didn’t guarantee that the tenants would fulfill their lease obligations. They did include an indemnification clause, meaning Evernest would be responsible for any liabilities arising from their services.
In 2021 and 2022, Evernest rented out the landlords’ properties to two tenants who later defaulted on their leases. The landlords sued Evernest for breach of contract, negligence, and attorney fees, claiming Evernest failed to properly verify the information on the rental applications, leading to the defaults.
Evernest sought summary judgment, arguing they didn’t breach the contracts and that the other claims had no legal basis. The landlords opposed this, stating that the tenants’ applications had discrepancies and that Evernest did little to verify the information.
The Affidavit and the Objection
The landlords submitted an affidavit from their attorney, David S. Klein, to support their opposition to summary judgment. In the affidavit, Klein stated he’d handled the landlords’ litigation against the tenants and found he couldn’t verify the tenants’ employment. He also discovered they had prior eviction proceedings against them and didn’t have accounts with the banks listed on their applications. Klein attached public record search results and discovery responses from the banks to his affidavit.
Evernest moved to strike Klein’s affidavit, claiming that he couldn’t act as both an advocate and a witness in the case.
During the summary judgment hearing, the trial court agreed with Evernest and refused to consider Klein’s affidavit. The court stated that it wasn’t appropriate for Klein to introduce evidence in this way. The trial court then granted summary judgment to Evernest.
The Court of Appeals’ Decision
The landlords appealed, arguing the trial court erred in striking Klein’s affidavit and granting summary judgment.
The Court of Appeals examined the law regarding affidavits and Rule 3.7 of the Georgia Rules of Professional Conduct, which deals with when a lawyer can act as both an advocate and a witness. The court noted that Rule 3.7 doesn’t prevent a lawyer from representing a client before a trial, even if the lawyer is likely to be a necessary witness at the trial.
The Court of Appeals found that the trial court’s decision to strike the affidavit seemed overly broad, especially considering that some of Klein’s statements related to uncontested facts that could be easily verified through public records. The court pointed out that the trial court didn’t explain whether it had considered the arguments about Rule 3.7 or whether it considered taking judicial notice of the exhibits attached to Klein’s affidavit.
Therefore, the Court of Appeals vacated the trial court’s ruling on the motion to strike the affidavit and sent the case back, instructing the trial court to reconsider its decision. The Court of Appeals also vacated the grant of summary judgment to Evernest, stating that the trial court should revisit this decision after reconsidering the affidavit.
In simpler terms, the Court of Appeals is saying the trial court may have been too quick to dismiss the attorney’s affidavit. The lower court needs to take another look at the affidavit and the attached evidence to decide whether it can be considered in the case. Only then can the court properly determine if summary judgment is appropriate.
What Happens Next?
The case now goes back to the trial court. The trial court must re-evaluate whether to consider the attorney’s affidavit, and if so, to what extent. The trial court will then need to reconsider whether summary judgment for Evernest is appropriate, taking into account all the evidence presented. This means the landlords might have another chance to make their case, potentially leading to a different outcome in the long run.