See:
696 S.E.2d 649 (Ga. 2010)
287 Ga. 445
COVINGTON SQUARE ASSOCIATES, LLC
v.
INGLES MARKETS, INC.
No. S10G0459.
Supreme Court of Georgia.
June 28, 2010
Page 650
Michael A. Kessler, Alpharetta, for appellant.
Adam N. Struletz, Atlanta, for appellee.
CARLEY, Presiding Justice.
Covington Square Associates, LLC (Covington) leased space in a
shopping center to Ingles Markets, Inc. (Ingles). After selling the
shopping center in 2004, Covington brought suit against Ingles for
damages allegedly resulting from its failure to pay a portion of the
cost to hire a security guard. In December 2005, Ingles mistakenly
sent a check for its portion of real estate taxes to Covington instead
of the new landlord. Ingles notified Covington of the mistake and
demanded return of the funds. However, Covington retained the funds as
partial payment of the claimed security costs. Ingles then filed this
action for conversion, attorney fees pursuant to OCGA § 13-6-11, and
punitive damages, which was stayed pending the outcome of the other
litigation. That litigation ended when the Court of Appeals affirmed
the grant of Ingles' motion for summary judgment, ruling that the
lease did not require payment of security guard expenses. Covington
Square Assoc. v. Ingles Markets, 283 Ga.App. 307, 641 S.E.2d 266
(2007).
Thereafter, the trial court in the case at bar granted partial summary
judgment in favor of Ingles, ruling that Covington wrongfully asserted
dominion or control over Ingles' property and that Ingles is entitled
to attorney fees and punitive damages, but leaving for trial
determination of the amounts thereof. The trial court based its
attorney fees ruling on the fact that Covington refused to refund the
money despite the outcome of the other litigation and caused Ingles
the unnecessary trouble and expense of bringing suit where no bona
fide controversy existed.
The Court of Appeals affirmed the trial court's rulings as to the
conversion claim and attorney fees, but reversed as to punitive
damages. With respect to attorney fees, the Court of Appeals held that
they can be awarded on summary judgment if the movant is entitled to
them as a matter of law and that, " [a]pplying the any evidence
standard under these circumstances, [cit.] the trial court did not err
in ruling that Ingles was entitled to attorney fees as a matter of
law...." Covington Square Assoc. v. Ingles Markets, 300 Ga.App. 740,
744(2), 686 S.E.2d 359 (2009). Having granted certiorari to review
this holding, we conclude that the language of OCGA § 13-6-11 prevents
a trial court from ever determining that a claimant is entitled to
attorney fees as a matter of law.
[287 Ga. 446] In its entirety, OCGA § 13-6-11 provides as follows:
The expenses of litigation generally shall not be allowed as a part of
the damages; but where the plaintiff has specially pleaded and has
made prayer therefor and where the defendant has acted in bad faith,
has been stubbornly litigious, or has caused the plaintiff unnecessary
trouble and expense, the jury may allow them.
For many years, the Court of Appeals has recognized that " [t]he
intent of the law, as shown by the words, ‘ the jury may allow them,’
is to leave the matter of expenses of litigation to the jury trying
the case. [Cit.]" Taylor v. Estes, 85 Ga.App. 716, 719(2), 70 S.E.2d
82 (1952). See also Hyde v. Gill, 236 Ga.App. 729, 734(3), 513 S.E.2d
278 (1999); American Medical Transport Group v. Glo-An, 235 Ga.App.
464, 467(3), 509 S.E.2d 738 (1998); J.M. Clayton Co. v. Martin, 177
Ga.App. 228, 232(6), 339 S.E.2d 280 (1985); Brannon Enterprises v.
Deaton, 159 Ga.App. 685, 687, 285 S.E.2d 58 (1981); Sapp v. Howe, 79
Ga.App. 1, 3(4), 52 S.E.2d 571 (1949); Patterson & Co. v. Peterson, 15
Ga.App. 680, 684(4), 84 S.E. 163 (1915).
As a result, " ‘ it has long been held ... that in suits where the
expenses of litigation might be recovered as part of the damages, it
is error for the trial court to direct a verdict therefor. The matter
of such expenses is left solely to the jury. (Cits.)’ [Cit.]" Polma,
Inc. v. Coastal Canvas Products Co., 199 Ga.App. 616, 618(7), 405
S.E.2d 531 (1991). See also Tab Sales v. D & D Distrib., 153 Ga.App.
779, 780(2), 266 S.E.2d 558 (1980); Patterson & Co. v. Peterson,
supra. Whether a plaintiff has " met any of the preconditions for an
award of attorney fees and litigation expenses set forth in OCGA § 13
-6-11[is] solely a question for the
Page 651
jury. [Cit.]" City of Atlanta v. Broadnax, 285 Ga.App. 430, 440(6),
646 S.E.2d 279 (2007) (affirming judgment on jury verdict in favor of
defendant). " [S]uch an award under this statute necessitates jury
determination. [Cits.]" Fontaine Condo. Assn. v. Schnacke, 230 Ga.App.
469, 471(3), 496 S.E.2d 553 (1998) (vacating trial court's award of
attorney fees after it denied jury trial thereon).
Consistent with this precedent, the Court of Appeals has correctly
held that, because both the liability for and amount of attorney fees
pursuant to OCGA § 13-6-11 are solely for the jury's determination, a
trial court is not authorized to grant summary judgment in favor of a
claimant therefor. Hyde v. Gill, supra; American Medical Transport
Group v. Glo-An, supra; Page v. HSI Financial Svcs., 218 Ga.App. 283,
286(5), 461 S.E.2d 239 (1995), rev'd on other grounds, Henderson v.
HSI Financial Svcs., 266 Ga. 844, 471 S.E.2d 885 (1996); [287 Ga. 447]
Joseph Camacho Assoc. v. Millard, 169 Ga.App. 937, 939(2), 315 S.E.2d
478 (1984); Fountain v. Burke, 160 Ga.App. 262, 264(3), 287 S.E.2d 39
(1981); Pritchett v. Rainey, 131 Ga.App. 521, 522, 206 S.E.2d 726
(1974).
Ingles argues that the Court of Appeals, citing City of Marietta v.
Holland, 252 Ga. 299, 304(3), 314 S.E.2d 97 (1984), has stated that "
[e]xpenses of litigation under OCGA § 13-6-11 can be awarded on
summary judgment, but the movant must be entitled to them as a matter
of law. [Cit.]" Rivergate Corp. v. BCCP Enterprises, 198 Ga.App. 761
(2), 403 S.E.2d 65 (1991) (reversing summary judgment). See also
Rasmussen v. Nodvin, 174 Ga.App. 203, 205(4), 329 S.E.2d 541 (1985)
(reversing summary judgment). However, the Holland opinion does not
state that litigation expenses under the statute can be awarded on
summary judgment. Instead, this Court examined whether there was any
genuine issue of material fact as part of its determination that the
trial court not only erroneously granted plaintiff's motion for
summary judgment, but also erred in denying summary judgment in favor
of the defendants. Therefore, rather than authorizing summary judgment
for a claimant under OCGA § 13-6-11, Holland is explained by the
proposition that " [o]nly in the rare case where there was absolutely
no evidence to support the award of expenses of litigation would the
trial court be authorized to grant summary adjudication on such
issues." American Medical Transport Group v. Glo-An, supra. See also
Brito v. Gomez Law Group, 289 Ga.App. 625, 628(2), 658 S.E.2d 178
(2008). Other cases relied on by Ingles, as well as statements that
determination of the preconditions in the statute is " generally" for
the jury, are also explained by the simple proposition quoted above
from American Medical Transport Group v. Glo-An, supra. Merlino v.
City of Atlanta, 283 Ga. 186, 191(4), 657 S.E.2d 859 (2008); Tyler v.
Lincoln, 272 Ga. 118, 122(2), 527 S.E.2d 180 (2000); Stargate Software
Intl. v. Rumph, 224 Ga.App. 873, 878(4), 482 S.E.2d 498 (1997);
Webster v. Brown, 213 Ga.App. 845, 846(2), 446 S.E.2d 522 (1994).
Both Ingles and the Court of Appeals relied on D & H Constr. Co. v.
City of Woodstock, 284 Ga.App. 314, 318-319(2), 643 S.E.2d 826 (2007)
and Graves v. Diambrose, 243 Ga.App. 802, 803-804(2), 534 S.E.2d 490
(2000). However, neither decision states that summary judgment can be
granted in favor of a claimant under OCGA § 13-6-11. Furthermore,
contrary to Ingles' argument and the Court of Appeals' opinion here,
it is not at all clear that the trial court in either case granted
summary judgment on the claim for attorney fees. The Court of Appeals'
application of the " ‘ any evidence’ standard of review" in D & H
Constr. Co. v. City of Woodstock, supra at 319(2), 643 S.E.2d 826, as
well as its determination that the trial court " could have properly
found" a statutory basis for attorney fees in [287 Ga. 448] Graves v.
Diambrose, supra at 804(2), 534 S.E.2d 490, was entirely inconsistent
with any such grant of summary judgment. Indeed, we note that, even if
attorney fees could be awarded pursuant to OCGA § 13-6-11 on summary
judgment, the Court of Appeals still erred in this case by utilizing
the " any evidence" standard. " Although the trial court may grant
attorney fees or litigation expenses under OCGA § 13-6-11 where it
sits as the trier of fact, [cit.], it is not a trier of fact on a
motion for summary judgment." Page v. HSI Financial Svcs., supra. See
also Rasmussen v. Nodvin, supra. Compare
Page 652
Artzner v. A & A Exterminators, 242 Ga.App. 766, 773(4), 531 S.E.2d
200 (2000) (where Court of Appeals looked for any evidence showing
that the grant of summary judgment to defendant was error).
Accordingly, the trial court erred by awarding expenses of litigation
pursuant to OCGA § 13-6-11 to Ingles on its motion for summary
judgment. American Medical Transport Group v. Glo-An, supra; Joseph
Camacho Assoc. v. Millard, supra. The judgment of the Court of Appeals
must therefore be reversed to the extent that it affirms the trial
court's grant of summary judgment in favor of Ingles with respect to
its claim for attorney fees. Our holding does not affect the remaining
rulings of the Court of Appeals.
Judgment affirmed in part and reversed in part.
All the Justices concur.
Overruling the 13-6-11 portion of the Court of Appeals Holding in:
686 S.E.2d 359 (Ga.App. 2009)
300 Ga.App. 740
COVINGTON SQUARE ASSOCIATES, LLC
v.
INGLES MARKETS, INC.
No. A09A2145.
Court of Appeals of Georgia.
November 3, 2009
Page 360
Michael A. Kessler, Cumming, for appellant.
Hartman, Simons, Spielman & Wood, Samuel R. Arden, Jill R. Johnson,
Atlanta, for appellee.
MIKELL, Judge.
Ingles Markets, Inc. (" Ingles" ) sued Covington Square Associates,
LLC (" Covington" ), for conversion, unjust enrichment, attorney fees,
and punitive damages arising out of its refusal to return a check
Ingles alleged it paid by mistake. The trial court granted partial
summary judgment to Ingles on its
Page 361
claims for conversion, attorney fees, and punitive damages, ruling
that Covington wrongfully asserted dominion or control over Ingles's
property; that Ingles is entitled to attorney fees and punitive
damages; and that the amounts of those damages are to be determined at
trial. Covington appeals these rulings. For the following reasons, we
affirm the trial court's ruling as to the claims for conversion and
attorney fees, but reverse as to the claim for punitive damages.
Our review of the grant of summary judgment is de novo.[1]
To prevail at summary judgment, the moving party must demonstrate that
there is no genuine issue of material fact and that the undisputed
facts, viewed in the light most favorable to the nonmoving party,
warrant judgment as a matter of law. Where the movant is the
plaintiff, she has the burden of presenting evidence to support her
claim and the burden of piercing the defendant's affirmative
defenses.[2]
So viewed, the record reflects that in 1987, Ingles and a prior owner
of Covington Square Shopping Center in DeKalb County (the " Shopping
Center" ) entered into an agreement for Ingles to lease certain space
in the Shopping Center (the " Lease" ). Under the terms of the Lease,
Ingles paid a portion of the real estate taxes for the Shopping
Center. In 1994, Covington purchased the Shopping Center and became
Ingles's landlord. According to Ron Freeman, Ingles's chief financial
officer, Ingles fully paid all real estate tax charges to [300 Ga.App.
741] Covington during the time it owned the Shopping Center. Ingles
also paid a portion of the cost to hire a security guard for the
Shopping Center.[3] IN 2004, NORTHEAST ENTERPRISES, INC. (" NORTHEAST
ENTERPRISES" ) purchased the Shopping Center from Covington.
On November 15, 2005, Ingles received a real estate tax statement from
Northeast Enterprises for the amount of $32,584.85, to cover 2005
county property taxes. On December 20, 2005, Ingles mistakenly sent a
check in the amount of $32,584.85 to Covington, its former landlord,
rather than Northeast Enterprises. According to Freeman, the check
represented Ingles's payment of its 2005 property taxes for the
Shopping Center.[4] Covington cashed the check, and Ingles had to
issue another check in the amount of $32,584.85 to Northeast
Enterprises to satisfy its property tax obligation. On February 3,
2006, Ingles notified Covington of its mistake and demanded return of
the funds. On February 13, 2006, Covington notified Ingles that it
would retain the funds as partial payment of the unpaid security costs
at issue in the DeKalb litigation.
Ingles filed the instant action on February 24, 2006. The trial court
stayed the case pending the outcome of the appeal in the DeKalb
litigation, and on December 14, 2007, following our ruling in the
DeKalb litigation, Ingles again demanded return of the funds. There is
no evidence in the record that Covington has returned the funds.
1. Covington contends that the trial court erred in granting summary
judgment to Ingles because " [t]he mistaken payment by Ingles amounts
to nothing more than an overpayment under the Lease. Therefore,
Ingles' claim to recover the payment sounds in contract and not in
tort or conversion." Covington does not dispute that Ingles is
entitled to a refund due to the DeKalb litigation,
Page 362
but disputes that there was a conversion. Covington relies on Kline v.
Atlanta Gas Light Co. [5] and Levenson v. Word, [6] to support its
argument.
[300 Ga.App. 742] With regard to Kline, the trial court correctly
distinguished that case because the excess payment was used to pay an
undisputed outstanding debt; [7] here, the alleged outstanding debt
was in dispute, and Covington specifically sued Ingles in the DeKalb
litigation to recover the disputed amount. Levenson is likewise
distinguishable and does not require reversal. In that case, there was
no dispute that the criminal defendant owed the retainer fee to the
defendants, and the plaintiff could not prove that the defendants'
exercise of dominion over the funds was wrongful. [8] Since any
outstanding debt in this case was in dispute at the time Ingles
mistakenly mailed the check to Covington, Kline and Levenson are
inapplicable.
Conversion consists of an unauthorized assumption and exercise of the
right of ownership over personal property belonging to another, in
hostility to his rights; an act of dominion over the personal property
of another inconsistent with his rights; or an unauthorized
appropriation. Any distinct act of dominion wrongfully asserted over
another's property in denial of his right, or inconsistent with it, is
a conversion. It is unnecessary to show that the defendant applied it
to his own use, if he exercised dominion over it in defiance of the
owner's right, or in a manner inconsistent with it.[9]
One way to prove that a defendant has exercised unauthorized dominion
over the property and has thereby converted the property is to present
evidence that " a defendant, who has lawfully come into possession of
the plaintiff's property, unlawfully refuses to return the plaintiff's
property after the plaintiff demands its return." [10] In this case,
Ingles mistakenly mailed to Covington a check intended for its current
landlord to cover its property tax bill. When Ingles realized the
error, it immediately notified Covington of the clerical error,
expressly noted that it had intended to submit the payment to its
current landlord, and demanded return of the check. The elements of
conversion have been satisfied.
We find Covington's arguments on this issue disingenuous. Covington
filed the DeKalb litigation specifically because the " Common Area"
costs for security charges were in dispute and because [300 Ga.App.
743] Ingles refused to pay Covington for these costs. In the face of a
disputed debt embroiled in litigation and an immediate demand letter,
it strains credulity for Covington to argue that it is guilty of
merely failing to refund an overpayment, and not guilty of conversion.
The trial court did not err in ruling that Covington converted the
check.[11]
2. Covington next contends that the trial court erred in granting
summary judgment to Ingles on its claim for attorney fees under OCGA §
13-6-11 because this issue must be resolved by a jury. The trial court
found that " [Ingles] is entitled to [attorney] fees based on
Covington's refusal to refund the money in spite of the outcome of the
DeKalb litigation and causing [Ingles] to bear the unnecessary expense
of bringing suit where no bona fide controversy exists" and ruled that
the amount of attorney fees is to be determined at trial. We affirm
this ruling.
OCGA § 13-6-11 provides that:
Page 363
The expenses of litigation generally shall not be allowed as a part of
the damages; but where the plaintiff has specially pleaded and has
made prayer therefor and where the defendant has acted in bad faith,
has been stubbornly litigious, or has caused the plaintiff unnecessary
trouble and expense, the jury may allow them.
While questions of bad faith, stubborn litigiousness, and unnecessary
trouble and expense are generally for the jury to decide, expenses of
litigation under this Code section can be awarded on summary judgment,
provided the movant is entitled to them as a matter of law.[12] The
amount of the award of attorney fees as damages, however, is to be
determined by a jury.[13]
In D & H Constr. Co., [14] a case very similar to this case, we
affirmed the trial court's grant of summary judgment to the plaintiff
on its claim for attorney fees, where the appellant retained a
duplicate payment to which it had no rightful claim. As in D & H
Constr. Co., the record here reflects that Covington accepted a [300
Ga.App. 744] payment from Ingles that was intended for Ingles's
current landlord and applied it to security costs, knowing that Ingles
disputed the security costs debt; that Covington refused to return the
check even after Ingles informed it of the mistake; and that Ingles
was forced to bring this lawsuit to recover the mistaken payment.
Additionally, as discussed in Division 1, supra, Covington's defense
was unreasonable and incredible. Applying the any evidence standard
under these circumstances,[15] the trial court did not err in ruling
that Ingles was entitled to attorney fees as a matter of law, and we
do the same here.[16] THE TRIAL COURT WAS also authorized to allow a
jury to determine the amount.
3. Covington contends that the trial court erred in granting summary
judgment to Ingles on its claim for punitive damages because this
issue must be resolved by a jury. We agree.
OCGA § 51-12-5.1(b) provides that:
Punitive damages may be awarded only in such tort actions in which it
is proven by clear and convincing evidence that the defendant's
actions showed willful misconduct, malice, fraud, wantonness,
oppression, or that entire want of care which would raise the
presumption of conscious indifference to consequences.
Subsection (d) of that Code section further provides:
(1) In any case in which punitive damages are claimed, the trier of
fact shall first resolve from the evidence produced at trial whether
an award of punitive damages shall be made. This finding shall be made
specially through an appropriate form of verdict, along with the other
required findings. (2) If it is found that punitive damages are to be
awarded, the trial shall immediately be recommenced in order to
receive such evidence as is relevant to a decision regarding what
amount of damages will be sufficient to deter, penalize, or punish the
defendant in light of the circumstances of the case. It shall then be
the duty of the trier of fact to set the amount to be awarded
according to subsection (e), (f), or (g) of this Code section, as
applicable. [17]
This Code section expressly provides that a jury must determine [300
Ga.App. 745] whether a complainant is entitled to punitive damages and
if so, the amount to be awarded. Although a trial court-and the
appellate courts-must consider whether there is any evidence to
support an award of punitive damages, the question of whether to
impose such an award is
Page 364
for the trier of fact.[18] Because we have found no authority and
Ingles cites to none holding that a trial court can grant summary
judgment to a claimant on its claim for punitive damages, we reverse
that portion of the trial court's order granting summary judgment to
Ingles on its claim for punitive damages and affirm the portion of the
order ruling that a jury must determine the amount of punitive
damages.
Judgment affirmed in part and reversed in part.
JOHNSON, P.J., and ELLINGTON, J., concur.
---------
Notes:
[1] Smith v. Gordon, 266 Ga.App. 814(1), 598 S.E.2d 92 (2004).
[2] (Footnotes omitted.) Id.
[3] See Covington Square Assoc. v. Ingles Markets, 283 Ga.App. 307,
641 S.E.2d 266 (2007) (" Covington Square I " or the " DeKalb
litigation" ). This is the second appearance of these parties before
this Court. As explained in Covington Square I, shortly after selling
the Shopping Center in 2004, Covington sought to collect unpaid
portions of security guard costs it billed to Ingles. When Ingles
refused to pay, Covington sued Ingles for breach of contract seeking
damages for unpaid rents under the Lease. Id. at 308, 641 S.E.2d 266.
We affirmed the trial court's grant of summary judgment to Ingles,
ruling that the Lease did not require Ingles to pay security guard
costs. Id. at 311(1), 641 S.E.2d 266.
[4] Although we cannot tell from the poor copy included in the record
on appeal, Freeman avers that the check indicates on its face that it
was for payment of Ingles's 2005 property taxes. In its order, the
trial court also notes that the check indicates on its face that it
was for payment of Ingles's 2005 property taxes.
[5] 246 Ga.App. 172, 538 S.E.2d 93 (2000).
[6] 294 Ga.App. 104, 668 S.E.2d 763 (2008).
[7] Kline, supra at 173-174, 538 S.E.2d 93.
[8] Levenson, supra at 106-107(1), 668 S.E.2d 763.
[9] (Citations and punctuation omitted.) Maryland Cas. Ins. Co. v.
Welchel, 257 Ga. 259, 261(1), 356 S.E.2d 877 (1987).
[10] (Citation and footnote omitted.) Williams v. Nat. Auto Sales, 287
Ga.App. 283, 285(1), 651 S.E.2d 194 (2007).
[11] See, e.g., D & H Constr. Co. v. City of Woodstock, 284 Ga.App.
314, 643 S.E.2d 826 (2007) (summary judgment on conversion claim
proper where evidence showed that plaintiff tendered to defendant
duplicate check; that plaintiff notified defendant of error and
demanded return of the check; and that defendant refused to return the
check); Rivergate Corp. v. BCCP Enterprises, 198 Ga.App. 761(2), 403
S.E.2d 65 (1991).
[12] See D & H Constr. Co., supra at 318-319(2), 643 S.E.2d 826. See
also Graves v. Diambrose, 243 Ga.App. 802, 803(2), 534 S.E.2d 490
(2000).
[13] See American Med. Transport Group v. Glo-An, Inc., 235 Ga.App.
464, 466(3), 509 S.E.2d 738 (1998).
[14] Supra.
[15] MDC Blackshear, LLC v. Littell, 273 Ga. 169, 174(5), 537 S.E.2d
356 (2000) (" [a]n award of fees and expenses [under OCGA § 13-6-11]
must be affirmed if there is any evidence to support it" ) (footnote
omitted).
[16] D & H Constr. Co., supra at 319(2), 643 S.E.2d 826.
[17] OCGA § 51-12-5.1(d)(1) & (2).
[18] Morales v. Webb, 200 Ga.App. 788, 790, 409 S.E.2d 572 (1991);
Petrolane Gas Svc. v. Eusery, 193 Ga.App. 860, 862(1), 389 S.E.2d 355
(1989). See also Wal-Mart Stores v. Forkner, 221 Ga.App. 209, 210, 471
S.E.2d 30 (1996) (following bench trial on damages, trial court
awarded plaintiff punitive damages).
---------
End
Hugh Wood, Esq.
Wood & Meredith, LLP
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www.woodandmeredith.com
hwood@woodandmeredith.com
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