Clary Lakes Homeowners Association, Inc. (the “Association”) sued homeowners Joseph and Patricia Marino, seeking damages and enforcement of a restrictive covenant that required garages to be used for parking vehicles and not for storage. The Marinos filed an answer and counterclaim, contending that the restrictive covenant was invalid. The trial court granted partial summary judgment to the Association, but in Marino v. Clary Lakes Homeowners Association, Inc.
Following remand, the Marinos filed a motion to dismiss the Association’s breach-of-settlement-agreement claim, which the trial court denied. Nevertheless, the Association ultimately dismissed this claim and then moved to dismiss the Marinos’ attorney fees claim. Finding that neither party prevailed in the litigation, the trial court granted the Association’s motion. On appeal, the Marinos contend that the trial court erred in (1) dismissing their claim for attorney fees under the “prevailing party” provision, (2) denying their motion to dismiss the claim for breach of the settlement agreement, (3) denying their motion for attorney fees pursuant to OCGA § 9-15-14 (b), (4) dismissing their counterclaims, and (5) failing to enter final
A detailed recitation of the background facts can be found in Marino 1
Garage Parking. All vehicles owned or used on a regular basis by Owners or Occupants shall be parked in garages to the extent that garage space is available and vehicles fit in the garage. Garages shall not be used for storage on a regular basis so that they become unavailable for parking cars therein. The Covenant Committee shall have the power to grant a variance to any Owner or Occupant who demonstrates special circumstances why he cannot comply with this requirement. Application for this variance must be made in writing to the Covenant Committee. The variance to the Owner or Occupant must be in writing and specify the term of the required variance.7
The Marinos purchased their home in the Clary Lakes subdivision nearly ten years prior to the approval of the Amended Declaration, and they did not vote in favor of the declaration or give their written consent to it.
In 2011, the Association sued the Marinos for damages, injunctive relief, and attorney fees, alleging that they were in violation of the Garage Use Covenant, breached a settlement agreement, and owed fines.
Thereafter, the Marinos filed an appeal with this Court. And in Marino I, we concluded
that for the restrictive covenant at issue to be enforceable against the Marinos, they had to agree to the covenant in writing pursuant to OCGA § 44-5-60 (d) (4), or the covenant had to be approved by at least two-thirds of the votes in the Association pursuant to OCGA § 44-3-226 (a) of the POA Act. Because the uncontroverted evidence shows that neither condition was met in this case, the restrictive covenant was unenforceable against the Marinos, and the trial court erred in concluding otherwise.20
Accordingly, we reversed the grant of summary judgment to the Association, and the denial of summary judgment to the Marinos, on the Association’s claims for damages and injunctive relief based on the violation of the restrictive covenant, and we remanded the case with direction for the trial court to enter summary judgment for the Marinos on those claims.
On remand, the Marinos moved to dismiss the Association’s breach-of-settlement-agreement claim, arguing that it violated public policy. The Marinos also sought to be declared the “prevailing party” and awarded attorney fees. The Association responded and, while the motions were pending, it amended its complaint to request both damages and injunctive relief for the Marinos’ alleged breach of the settlement agreement. In addition, the Association moved to dismiss the Marinos’ counterclaims for attorney fees.
Despite its recent amendment, on April 29,2014, the Association voluntarily dismissed its claim for breach of the settlement agreement. And shortly thereafter, the trial court scheduled a hearing for arguments on the Association’s motion to dismiss the Marinos’ counterclaims for attorney fees, as well as their motion seeking an award of attorney fees as the “prevailing party.” On May 30, 2014, the day of the hearing, the Marinos filed a supplemental motion, seeking attorney fees pursuant to OCGA § 9-15-14 (b). At the conclusion of the hearing, the trial court found that because the Association’s claim for breach of the settlement agreement was not adjudicated on the merits, neither party had prevailed. Consequently, the trial court issued an order ruling that the Marinos were not entitled to attorney fees as the “prevailing part/’ and further ruled that they were not entitled to attorney fees under OCGA § 9-15-14 (b). This appeal follows.
1. The Marinos contend that the trial court erred in ruling that they were not the “prevailing part/’ to the litigation and, therefore, were not entitled to attorney fees under the Amended Declaration. We agree.
The final sentence of Section 16 (b) of the Amended Declaration provides: “In the event of litigation, the losing party shall pay the litigation expenses, including the reasonable attorney’s fees actually incurred, of the prevailing party.” Construing similar language, the Supreme Court of Georgia has held that “a plaintiff prevails when actual relief on the merits materially alters the legal relationship between the parties by modifying the defendant’s behavior in any way that directly benefits the plaintiff,”
Here, the Marinos (as defendants in this action) prevailed as to the Association’s claims for damages and injunctive relief predicated on the breach of the Garage Use Covenant when this Court ordered the trial court to enter summary judgment in their favor as to those claims. At that point in time, the Association’s claim for breach of the settlement agreement was still pending, and thus, we held that deeming either the Marinos or the Association as the “prevailing party5’ under Section 16 (b) of the Amended Declaration was premature. But once the Association voluntarily dismissed its only remaining claim, the Marinos prevailed, regardless of their counterclaims, “by not having any relief imposed against them.”
In its order denying the Marinos’ claim for attorney fees, the trial court characterized our holding in Marino I as having “found that Plaintiff had a separate, viable claim against Defendants and that the outcome of such claim would determine the ‘prevailing party’ in this case.”
2. The Marinos also contend that the trial court erred in denying their motion to dismiss the Association’s claim for breach of the settlement agreement. However, the Association dismissed this claim, and in Division 1, supra, we held that the Marinos are the “prevailing part/’ despite the fact that the claim was not adjudicated on the merits. Thus, this enumeration is moot, and we need not address it.
3. The Marinos also contend that the trial court erred in denying their motion for attorney fees pursuant to OCGA § 9-15-14 (b). We disagree.
Under OCGA § 9-15-14 (b), the trial court may award fees if
it finds that an attorney or party brought or defended an action, or any part thereof, that lacked substantial justification or that the action, or any part thereof, was interposed for delay or harassment, or if it finds that an attorney or party unnecessarily expanded the proceeding by other improper conduct. . . .36
And this statute defines “lacked substantial justification” as meaning “substantially frivolous, substantially groundless, or substantially vexatious.”
Here, the Marinos claim that, in light of our opinion in Marino I, the Association’s decision, following remand, to continue litigating its claim for breach of the settlement agreement lacked substantial justification. They further argue that the Association’s amendment to the claim to seek monetary damages, in addition to injunctive relief, was done for purposes of delay and harassment. But in Marino I, we expressed no opinion on the merits of the Association’s claim for breach of the settlement agreement. Furthermore, we are unpersuaded that the aforementioned opinion can be read as implicitly holding that the settlement agreement was void as a violation of public policy. Indeed, under our contract law, “a person may waive or renounce what the law has
Moreover, when a trial court denies summary judgment because genuine issues of material fact remain, as the trial court did in this matter with regard to the Association’s breach-of-settlement-agreement claim, an award of attorney fees under OCGA § 9-15-14 (b) is not warranted except in unusual cases.
4. Finally, the Marinos contend that the trial court erred in granting the Association’s motion to dismiss their counterclaim for attorney fees. Specifically, they argue that the trial court erred to the extent that it granted the Association’s motion on the ground that they failed to comply with Section 16 (b) of the Amended Declaration, which requires that homeowners attempt to resolve disputes by filing a grievance with the Board and attending a hearing regarding the dispute prior to filing a lawsuit. However, we held in Division 1, supra, that the Marinos are the “prevailing party’ because they successfully defended against the Association’s action, and thus, they are entitled to attorney fees regardless of whether they succeeded on their counterclaims. Accordingly, we need not address this enumeration of error.
In summary, for all of the foregoing reasons, we reverse the trial court’s ruling that the Marinos were not the “prevailing party” to the litigation and were not entitled to attorney fees. And we remand the case for further proceedings to determine the exact amount of attorney fees to be awarded and for final judgment to be entered in favor of the Marinos.
Judgment affirmed in part and reversed in part, and case remanded.
Notes
Id. at 844-48 (2).
Id. at 850 (5).
See id. at 840-43.
Id. at 841.
Id.
Id. at 841-42.
Id. at 842.
Id.
Id.
Id.
Id.
Id.
See OCGA § 44-5-60 (d) (4) (“Notwithstanding any other provision of this Code section or of any covenants with respect to the land, no change in the covenants which imposes a greater restriction on the use or development of the land will be enforced unless agreed to in writing by the owner of the affected property at the time such change is made.”).
Marino I,
Id. at 843.
Id.
Id.
Id. at 850 (5).
Id. at 840.
Id. at 844-48 (2).
Id. at 850 (5).
Id.
Crabapple Lake Parc Cmty. Ass’n, Inc. v. Circeo,
Bd. of Comm’rs of Crisp County v. City Comm’rs of the City of Cordele,
Crabapple Lake Parc,
Crabapple Lake Parc,
Crabapple Lake Parc,
Magnetic Resonance Plus, Inc. v. Imaging Sys. Int’l,
Benchmark Builders, Inc. v. Schultz,
Id. (emphasis in original).
Emphasis supplied.
Marino I,
See Benchmark Builders, Inc.,
We acknowledge that the Marinos argue that the claim for breach of the settlement agreement should have been dismissed as void against public policy, especially in light of our holding in Marino I that the covenant was unenforceable as a violation of the POA Act and OCGA § 44-5-60 (d) (4). Again, given our holding in Division 1, supra, we need not address this issue. Nevertheless, as more fully discussed in Division 3, infra, we do not agree that our holding in Marino I can be read as even implicitly finding that the settlement agreement was void as a matter of public policy.
See OCGA § 9-15-14 (b).
See id.
Rescigno v. Vesali,
Bryan v. MBC Partners, L.P.,
See id. (holding that homeowner validly contracted to abide by restrictive covenants mutually applicable to all lot owners, including a valid proscription on all signs whatsoever, and thus enforcement of restrictive covenants did not violate public policy regarding restraints on free speech).
See O’Leary v. Whitehall Constr.,
See id.