Opinion
A13A1137 A13A1138
11-21-2013
OMNI BUILDERS RISK d/b/a BEST VALUE INSURANCE SERVICES, INC. v. BENNETT. ANNA MARIE DILLARD, AS EXECUTRIX OF THE ESTATE OF JAMES GREGORY DILLARD v. BENNETT.
FIRSTDIVISION
PHIPPS,C. J.,
ELLINGTON,P. J., and BRANCH, J.
NOTICE:Motions for reconsideration must be physically received in our clerk'soffice within ten days of the date of decision to be deemed timely filed.
Branch, Judge.
These companion appeals mark the second appearance of this dispute beforeus. Plaintiff Lori Bennett brought a discrimination charge before the EqualEmployment Opportunity Commission ("EEOC") against her ex-employer, OmniBuilders Risk, Inc. ("Omni"), on the ground that Bennett had been terminatedbecause she had become pregnant. After an effort at mediation, Bennett suedOmni to enforce a settlement agreement allegedly reached there and also suedJames Dillard, Omni's president and majority shareholder, for fraudulentinducement because he allegedly induced her to participate in the mediation.Omni counterclaimed for breach of the mediation agreement, which had providedthat the parties' negotiations could not become the subject of litigation. In OmniBuilders Risk v. Bennett ("Omni Builders I"), 313 Ga. App. 358 (721SE2d 563) (2011) (physical precedent only), this Court reversed a grant ofpartial summary judgment to Bennett because mediation had not produced asettlement agreement in that Dillard had refused to sign a proposed agreement.Id. at 362 (1). On remand,Omni moved to add Bennett's counsel and counsel's law firm as party defendantsto Omni's counterclaim for breach of the mediation agreement. The trial courtgranted Bennett's motion for summary judgment as to Omni's counterclaim on theground that the mediation agreement was a contract between the parties and themediation company, and "not a contract creating obligations between [Bennett]and [Omni] or the other signatories thereto." The trial court also deniedDillard's motions to add Bennett's counsel and her law firm as party defendantsto Omni's counterclaim and for attorney fees under OCGA § 9-15-14.
The EEOC eventually dismissed Bennett's charge ofdiscrimination, finding that Omni did not have the required number of employeesand thus was not an "employer" for purposes of Title VII. See id. at 360, n. 2.
In Case No. A13A1137, Omni argues that the trial court erred when itdismissed Omni's counterclaim for breach of the mediation agreement and when itdenied Omni's motion to add Bennett's counsel and her law firm as partydefendants to that counterclaim. In Case No. A13A1138, Dillard's daughter argues that the trial court erred when it refused to conduct an evidentiaryhearing on her motion for attorney fees under OCGA § 9-15-14 and when it deniedher motion to add Bennett's counsel and her law firm as parties. We affirm inCase No. A13A1137 and reverse and remand for further proceedings in Case No.A13A1138.
James Dillard died in August 2011, before theissuance of our decision in Omni Builders I.
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The underlying facts are set out in our previous opinion as follows:
During the pendency of the EEOC claim, per Bennett's employment contractwith Omni, on November 2, 2008, the parties attended a mediation at which[Dillard,] Bennett and their respective attorneys were present. The fourattendees signed a mediation agreement which provided guidelines for themediation process.OmniBuilders I, supra at359. The mediation agreement was reached by what the preamble to the documentcalled "the undersigned parties," including Dillard, Dillard's counsel,Bennett, and Bennett's counsel. The mediation agreement specified that themediation service's "contract for services is with the attorney(s)," from whomthe mediation service "expect[ed] payment." The agreement also provided that"[a]ll that occurs during the mediation process shall be confidential and maynot be recorded, and shall not be revealed in any subsequent legal proceedingsor otherwise," and that "[a]ll parties agree not to institute any action basedon the mediation."
During the mediation,
the parties preliminarily agreed to settle the claim for $65,000, afterwhich the mediator prepared a "settlement memorandum" which had signature linesfor both parties and their attorneys. The memorandum provided that Bennettwould release all claims and withdraw the discrimination charge filed with theEEOC, and accept $65,000 in damages, and Omni would pay the mediation costs.The memorandum included a provision for $2,000 in liquidated damages for breachof the settlement agreement. Bennett and Dillard were in separate caucus roomsduring this time, and Dillard's attorney averred that the mediator prepared thememorandum after several hours of negotiation and took the proposal to Bennettand her attorney first for their signatures. After Bennett and her attorneysigned the memorandum, the mediator took the memorandum to Dillard and hisattorney. The attorney signed the document, but Dillard refused and left themediation. The mediator returned to Bennett and her attorney and told themabout the incident.OmniBuilders I, supra at359. Bennett then brought this action against Omni for breach of the settlementagreement and expenses of litigation under OCGA § 13-6-11, and against Dillardpersonally for fraudulent inducement.
Bennett's claim for fraudulent inducement alleged that Dillard had "representedto [Bennett] that he had a good faith interest in settling their dispute whenhe agreed to mediate it"; that Bennett had "relied on [Dillard's]representation" as she prepared for and attended the mediation; and that "when[Dillard] suddenly and inexplicably refused to abide by the terms of thesettlement agreement created by and assented to by the parties," Bennettsuffered damages "equaling wages lost while attending the mediation andattorney[ ] fees incurred as a result of the mediation." At deposition,however, Bennett testified that she knew that her employment contract requiredher to mediate any dispute with Omni, that Dillard had made no representationon which she relied in preparing for or attending the mediation, that she wasnot aware that her counsel had added a claim of fraudulent inducement againstDillard, and that counsel had instructed her not to answer whether she hadauthorized them to sue Dillard personally.
In his answer, Dillard alleged that Bennett had failed to state a claimfor fraud. Dillard also moved for a more definite statement of that claim. OnDecember 8, 2009, Bennett's counsel sent Dillard's counsel an email to theeffect that Dillard's motion was "convincing" such that Bennett would dismiss herfraudulent inducement claim. On December 15, 2009, Bennett dismissed thefraudulent inducement claim without prejudice. In his deposition, Dillardtestified that although "a lot of people . . . assumed" that Omni or itsinsurer "would have to pay some sort of money" in order to settle Bennett'sclaim, Dillard himself "knew" that the case would not require settlement.
At an April 2012 hearing on pending motions in the case, the trial courtbarred Dillard from examining Bennett's counsel concerning the framing andprosecution of Bennett's fraudulent inducement claim. In its final orders, thecourt granted Bennett's oral motion for summary judgment on Omni'scounterclaim, denied Omni's motion to add Bennett's counsel and her law firm asparty defendants to that counterclaim, and denied Dillard's motion for fees,concluding that there was "a great deal of circumstantial evidence from which[Bennett] and her attorneys could have reasonably believed that a fraudulentinducement claim against Dillard was well-founded." These appeals followed.
CaseNo. A13A1137
1. Omni first argues that the trial court erred when it dismissed Omni'scounterclaim for breach of the mediation agreement. We disagree.
The construction of a contract "involves a question of law for the courtto resolve based on the intent of the parties as reflected in the agreement. Wereview this issue de novo." (Citations omitted.) Savannah Yacht Corp. v.Thunderbolt Marine, 297 Ga. App. 104, 109 (1) (676 SE2d 728) (2009).
First, we must determine if the contract language is ambiguous, and, ifso, then we apply the appropriate rules of construction set forth in OCGA § 13-2-2.Where the language of a contract is plain and unambiguous, however, noconstruction is required or permissible and the terms of the contract must begiven an interpretation of ordinary significance.(Citationand punctuation omitted.) Id.
As we have noted, the mediation agreement provided that "[a]ll thatoccurs during the mediation process shall be confidential . . . , andshall not be revealed in any subsequent legal proceedings or otherwise," andthat "[a]ll parties agree not to institute any action based on the mediation."(Emphasis supplied.) The agreement also defined the "mediation process,"however, as "a non-adversarial settlement negotiation that can only result in aresolution if all [p]arties voluntarily agree." Bennett brought suit not as toanything that occurred during the parties' settlement negotiations (the"mediation process"), but rather as to an allegedly complete settlementagreement. Accordingly, because Bennett's lawsuit was based on the result ofthe mediation process, and not the process itself, Bennett did not violate theconfidentiality provision of the mediation agreement. Finally, if we were tobar a party from attempting to enforce a settlement agreement, we wouldundermine the rule that "when parties have entered into a definite, certain,and unambiguous agreement to settle, it should be enforced." (Citation omitted.)Savannah Yacht, supra at 109 (1). Because Bennett did not breach theplain terms of the mediation agreement when she filed suit to enforce asettlement allegedly reached as a result of mediation, the trial court did noterr when it dismissed Omni's counterclaim for breach of the mediationagreement.
2. Our affirmance of the trial court's dismissal of Omni's counterclaimmoots the question of necessary parties to that counterclaim.
CaseNo. A13A1138
3. In this companion appeal, Dillard's principal argument is that thetrial court erred when it denied his motion for attorney fees under OCGA §9-15-14 on the basis that Bennett's claim of fraudulent inducement presented nojusticiable issue of law or fact and lacked any substantial justification. We agree.
OCGA § 9-15-14 (a) provides that
reasonable and necessary attorney's fees and expenses of litigation shallbe awarded to any party against whom another party has asserted a claim,defense, or other position with respect to which there existed such acomplete absence of any justiciable issue of law or fact that it could not bereasonably believed that a court would accept the asserted claim, defense, orother position.(Emphasissupplied.) "The standard for reviewing an OCGA § 9-15-14 (a) ruling is the anyevidence standard." (Citations omitted.) Brown v. Kinser, 218 Ga. App.385, 387 (2) (461 SE2d 564) (1995); see also Bircoll v. Rosenthal, 267Ga. App. 431, 439-440 (2) (c) (600 SE2d 388) (2004). "When considering anappeal from an award of attorney fees made under OCGA § 9-15-14 (a), we mustdetermine whether the claim asserted below either had some factual merit orpresented a justiciable issue of law." (Citations omitted.) Brown, supraat 387 (2). "This same principle should be applied when determining whether atrial court erred in denying a motion for litigation costs and attorney fees."Id.
Where no evidence shows any factual merit in a party's claim of fraud, atrial court errs by not awarding attorney fees to the opposing party seekingthem under OCGA § 9-15-14 (a). Brown, supra at 389 (2). Bennett citesonly Dillard's deposition testimony as support for the proposition, accepted bythe trial court, that her fraudulent inducement claim was "colorable." On thecontrary, Dillard's testimony shows only that he believed that he and/or hisinsurer would be victorious in the matter, including the mediation, andprovides no evidence that he ever made any representation about mediation toBennett, let alone a fraudulent one. As Dillard pointed out below, moreover,Bennett herself testified that her employment contract required mediation andthat she did not rely on any representation by Dillard in preparing for andattending the mediation. Finally, the fact that Bennett voluntarily dismissedher claim does not prevent an award under OCGA § 9-15-14 because litigants andcounsel are bound to exercise "a minimum amount of diligence" beforefiling suit. Bircoll, 267 Ga. App. at 437 (1) (plaintiffs' voluntarydismissal of claim after discovery does not prevent OCGA § 9-15-14 award offees concerning that claim) (footnote and punctuation omitted).
Because Bennett has produced no evidence showing that her claim forfraudulent inducement had any merit, and because her own testimony flatlycontradicts the position taken in that claim, the trial court erred when itdenied Dillard's motion for attorney fees incurred in defending against that claim.See Brown, supra at 389 (where "there exist[ed] no evidence giving riseto factual merit in appellees' claim that the statute of limitation was tolleddue to fraud," a trial court abused its discretion in denying appellant'smotion for fees under OCGA § 9-15-14); Cavin v. Brown, 246 Ga. App. 40,43-44 (3) (538 SE2d 802) (2000) (affirming trial court's award of attorney feesunder OCGA § 9-15-14 (a) when party's own evidence showed that his asserteddefense "could not possibly be believed"). We therefore reverse the trialcourt's order as to fees under OCGA § 9-15-14 and remand for furtherproceedings, including an evidentiary hearing, limited to the amount ofreasonable fees incurred by Dillard and properly awarded against Bennett'scounsel and/or her law firm concerning the fraudulent inducement claim. See Johnstonv. Correale, 285 Ga. App. 870, 871 (1) (648 SE2d 180) (2007) ("In order torecover attorney fees [under OCGA § 9-15-14], a prevailing party must proveboth their actual cost and their reasonableness") (foonote omitted); Bankstonv. Warbington, 319 Ga. App. 821, 823 (2) (738 SE2d 656) (2013) (vacating anaward of fees under OCGA § 9-15-14 and remanding for a hearing, "if requestedon remand," as to the "appropriate amount of attorney fees") (citationomitted); Walker v. Walker, 293 Ga. App. 872, 878-879 (4) (668 SE2d 330)(2008) (vacating an award of fees where the trial court failed to make"necessary findings, including that the fees were reasonable," when it made theaward) (citations omitted).
4. Dillard also argues that the trial court erred when it barred her fromoffering evidence on fees at the April 2012 hearing, when it authorizedBennett's counsel to state matters in her place concerning the prosecution ofthe fraudulent inducement claim, and when it granted Bennett's motion to quashsubpoenas of Bennett and her attorneys and denied Dillard's motion to strikeBennett's motion.
Because our holding in Division 3 finds Bennett's counsel and/or her lawfirm liable as a matter of law for reasonable fees incurred by Dillard indefending against Bennett's fraudulent inducement claim, it moots theseassertions of error concerning the trial court's handling of evidence anddiscovery on the merits of that claim.
Judgment affirmed in Case No. A13A1137. Judgment reversed andcase remanded with direction in Case No. A13A1138. Phipps, C. J., andEllington, P. J., concur.
Decided November 21, 2013 —Reconsiderations denied December 6, 2013.
Settlement. Barrow Superior Court. Before Judge Motes.
M. Katherine Durant, Gary Gerrard, for appellant.
Barrett & Farahany, Amanda A. Farahany, Eleanor M.Attwood, for appellee.