Pursuant to an oral contract, F. H. H. Construction, Inc. (FHHCI) agreed to construct a building on property owned by Charles P. Beall. Before completion of the building, however, Beall terminated the contract and ceased to make payments to FHHCI. FHHCI filed a materialman’s lien against Beall’s property.
Subsequently, Beall filed suit against FHHCI, seeking to recover alleged overpayments, damages for slander of title, and the removal of the lien on his property. FHHCI counterclaimed, seeking damages for breach of contract, attorney’s fees for bad faith, and foreclosure of its lien against Beall’s property.
The case was tried before a jury. At the close of the evidence, Beall moved for a directed verdict on FHHCFs counterclaim. The trial court granted a directed verdict as to FHHCFs counterclaim for attorney’s fees but denied Beall’s motion in all other respects. As to Beall’s main claim, the jury found in favor of FHHCI. As to FHHCFs counterclaim for breach of contract and lien foreclosure, the jury also found in favor of FHHCI. In Case No. A89A1455, Beall appeals from the judgment entered on the jury’s verdict and, in Case No. A89A1456, FHHCI cross-appeals.
1. The denial of Beall’s motion for a directed verdict on FHHCI’s counterclaim for breach of contract is enumerated as error.
There was a dispute in the evidence as to the terms of the parties’ oral contract and their performance thereunder. This dispute was material to Beall’s liability for breach of contract and to FHHCI’s entitlement to recover damages for any such breach. Accordingly, it was not error to deny Beall’s motion for a directed verdict. See
Spoon v. Herndon,
2. Beall urges that the amount of damages that the jury actually awarded on FHHCI’s counterclaim for breach of contract is not authorized under the evidence.
Even when the evidence as to damages is construed most favorably for FHHCI, the expenses that FHHCI incurred in performance, plus the profit that it lost as the result of Beall’s non-performance, less the payments that were admittedly made by Beall results in a figure that is several thousand dollars
less
than the jury’s award. Thus, the verdict that was actually returned by the jury is in
excess
of the recovery that would otherwise be authorized under the most favorable construction of the evidence. Accordingly, the amount of the verdict is not within the range of the relevant evidence and the judgment that was entered on that verdict must be reversed. See
Redman Dev. Corp. v. West,
3. The denial of Beall’s motion for a directed verdict on FHHCI’s counterclaim for foreclosure of its lien is enumerated as error.
There is no statutory requirement that FHHCI file notice of its in rem foreclosure action against Beall’s property. See
Hancor, Inc. v. Fleming Farms,
Thus, FHHCI was not required to file notice of its counterclaim for foreclosure of its lien against Beall’s property. FHHCI was, however, required to file notice of its counterclaim against Beall on the underlying indebtedness. It is undisputed that FHHCI did not file the
Case No. A89A1456
4. The trial court’s grant of Beall’s motion for a directed verdict on FHHCI’s counterclaim for attorney’s fees is enumerated as error.
The trial court concluded that FHHCI was not entitled to recovery of attorney’s fees because it was not pursuing an “independent claim” against Beall. This was erroneous. FHHCI’s counterclaim against Beall for breach of contract was an “independent claim” which would support an award of attorney’s fees. “The underlying policy of [OCGA § 13-6-11] barring a defendant from transforming a plaintiff’s case into that defendant’s damage suit for having been sued in no manner relates to cases wherein the defendant has asserted a viable, independent claim against the plaintiff. A rigid rule preventing any defendant from recovering litigation expenses works particular inequity when a defendant (as [FHHCI] herein) is required by law to file a compulsory counterclaim or be deemed to have waived the claim altogether. It would indeed be paradoxical to require a defendant to assert a given bad faith claim per [OCGA § 9-11-13 (a)] while at the same time withholding from that defendant any possible recovery of litigation expenses per [OCGA § 13-6-11]. . . . [W]hen a defendant asserts a claim for relief independent of a claim for litigation expenses incurred in defending against a plaintiff’s case-in-chief, [OCGA § 13-6-11] does not automatically operate to bar any recovery by the defendant of litigation expenses incurred in prosecuting such an independent claim. . . .”
Ballenger Corp. v. Dresco Mechanical Contractors,
“It is clear that [FHHCI] asserted by way of counterclaim a claim for relief ‘entirely independent of any simple assertion that [Be-all] acted in bad faith in filing the within suit. . . .’ [Cit.]”
Spoon v. Herndon,
supra at 796 (2). This is not a “case where the recovery would amount to a successful counterclaim against [Beall] merely for filing suit. [Cit.]”
Ravenwood Church v. Starbright, Inc.,
5. Beall urges that the grant of his motion for a directed verdict was nevertheless correct because the evidence would not authorize FHHCI to recover attorney’s fees. However, Beall’s contention that FHHCI could not recover attorney’s fees simply because the evidence disclosed that “a bona fide controversy existed between the parties is without merit where, as here, attorney[’s] fees are sought on the ground that a party has acted in bad faith. [Cit.]”
Formica Corp. v. Rouse,
“Bad faith authorizing an award of attorney[’s] fees in a contract action must relate to the conduct of entering the contract or to the transaction and dealings out of which the cause of action arose, which includes not only the negotiations and formulation of the contract but also performance of the contractual provisions. [Cit.]”
Hayes Constr. Co. v. Thompson,
Judgment reversed in Case No. A89A1455. Judgment reversed in Case No. A89A1456.