331 Ga. App. 204
Ga. Ct. App.2015Background
- In 2003 Clary Lakes HOA adopted an Amended Declaration (including adoption of the POA Act) with a garage-use covenant requiring garages be used for vehicle parking and not regular storage; the covenant allowed variances.
- Joseph and Patricia Marino bought their home before 2003, did not consent in writing to the Amended Declaration, and used their garage for storage (parking on the driveway).
- The Association fined the Marinos for violating the garage-use covenant; litigation followed alleging covenant violations, fines, breach of a settlement agreement, and seeking attorney fees under the Declaration.
- On cross-motions for summary judgment the trial court sided with the Association; on appeal this Court (Marino I) held the covenant was unenforceable against the Marinos because they neither gave written consent nor was the covenant approved by the POA Act two‑thirds vote requirement, reversed summary judgment for the Association on those claims, and remanded.
- After remand the Association amended and later voluntarily dismissed its remaining breach‑of‑settlement claim; the trial court then held that because the settlement claim was not adjudicated on the merits neither party was a "prevailing party" and denied the Marinos’ contract attorney‑fee claim and their § 9‑15‑14(b) fee request.
- The Court of Appeals: reversed the trial court’s prevailing‑party ruling (holding the Marinos prevailed once the Association dismissed its remaining claim), remanded for calculation of attorney fees under the Declaration, affirmed denial of fees under OCGA § 9‑15‑14(b), and left counterclaim/grievance issues moot.
Issues
| Issue | Plaintiff's Argument (Association) | Defendant's Argument (Marino) | Held |
|---|---|---|---|
| Enforceability of garage‑use covenant | Covenant valid under Declaration and POA Act; enforceable against homeowners | Covenant unenforceable as to Marinos because no written consent (OCGA § 44‑5‑60(d)(4)) and no two‑thirds POA approval | Court (Marino I) held covenant unenforceable against Marinos for lack of written consent or required voting approval; summary judgment for Marinos on those claims |
| Prevailing‑party attorney fees under Declaration | No prevailing party because Association had a pending breach‑of‑settlement claim that might change outcome | Marinos claim they prevailed on all adjudicated claims and thus are prevailing party entitled to fees under Declaration | Court of Appeals: Marinos are prevailing party after Association voluntarily dismissed its remaining claim; remanded to determine amount of fees |
| Fees under OCGA § 9‑15‑14(b) (sanctions for frivolous actions) | Association’s continued pursuit of settlement‑breach claim was justified; genuine factual issues existed | Marinos argue post‑remand continuation of settlement claim lacked substantial justification and was for delay/harassment | Court affirmed trial court’s denial of statutory fees — no abuse of discretion because Marino I did not decide the settlement claim merits and factual issues remained |
| Dismissal of Marinos’ counterclaims / grievance prerequisite | Section 16(b) grievance/hearing prerequisite not satisfied; counterclaims properly dismissed | Marinos contend dismissal was erroneous; they still seek contractual fees | Court found issue moot after holding Marinos are prevailing party and need not decide counterclaim/grievance question on appeal |
Key Cases Cited
- Crabapple Lake Parc Cmty. Ass’n, Inc. v. Circeo, 325 Ga. App. 101 (discusses covenant/association precedent and contract construction)
- Benchmark Builders, Inc. v. Schultz, 294 Ga. 12 (explains prevailing‑party concept for fee awards under contract)
- Eagle Jets, LLC v. Atlanta Jet, Inc., 321 Ga. App. 386 (defendant entitled to contractual fees when no relief is imposed on defendant)
- O’Leary v. Whitehall Constr., 288 Ga. 790 (standards for awarding fees under OCGA § 9‑15‑14(b) at summary judgment stage)
- Farrar v. Hobby, 506 U.S. 103 (definition and effect of prevailing party status for fee awards)