GA Code § 13-6-10 (2021)
2021 Georgia Code|Title 13 - Contracts|Chapter 6 - Damages and Costs Generally|§ 13-6-10. Damages and Expenses Recoverable - Exemplary Damages

 Unless otherwise provided by law, exemplary damages shall never be allowed in cases arising on contracts.   (Orig. Code 1863, § 2884; Code 1868, § 2892; Code 1873, § 2943; Code 1882, § 2943; Civil Code 1895, § 3797; Civil Code 1910, § 4393; Code 1933, § 20-1405.)   Law reviews.   - For article on bond liability and righting the wrongs of Georgia local government officers, see 13 Ga. L. Rev. 747 (1979).   JUDICIAL DECISIONS    Punitive damages may not be demanded in an ex contractu action. Pelletier v. Schultz, 157 Ga. App. 64, 276 S.E.2d 118 (1981).    Since a plaintiff did not show any duty owed to the plaintiff by a defendant other than a contractual duty, the trial court correctly held that a tort action could not be maintained and punitive damages could not be recovered. Wells v. New York Life Ins. Co., 195 Ga. App. 79, 392 S.E.2d 251 (1990).    Obligation to pay dividends arises from a contract between the corporation and stockholder and the corporation's failure to pay dividends could not support a claim of punitive damages, even if the corporation acted in bad faith. Mikart, Inc. v. Marquez, 211 Ga. App. 209, 438 S.E.2d 633 (1994).    Law applies even though refusal to pay may be in bad faith. Nestle Co. v. J.H. Ewing & Sons, 153 Ga. App. 328, 265 S.E.2d 61 (1980); Hospital Auth. v. Bryant, 157 Ga. App. 330, 277 S.E.2d 322 (1981); Horne v. Drachman, 247 Ga. 802, 280 S.E.2d 338 (1981).    Punitive damages are not awarded for breach of contract, but are awarded in response to tortious conduct.  See Gower v. Cohn, 643 F.2d 1146 (5th Cir. 1981).    Plaintiff was not entitled to an award of punitive damages since the trial court had granted a directed verdict on plaintiff's "fraud count" leaving only a claim of breach of contract. Johnson v. Waddell, 193 Ga. App. 692, 388 S.E.2d 723 (1989).    Punitive damages are not available in actions for breach of contract. Trust Co. Bank v. Citizens & S. Trust Co., 260 Ga. 124, 390 S.E.2d 589 (1990).    In an action by a shipper against an air carrier for breach of contract and conversion based on lost shipments, punitive damages were not recoverable since there was no evidence of illegal conversion and punitive damages cannot be awarded for breach of contract. Burlington Air Express, Inc. v. Georgia Pac. Corp., 211 Ga. App. 113, 438 S.E.2d 97 (1993), cert. denied, 1994 Ga. Lexis 262 (1994).   Amount of punitive damages to a plaintiff in trademark infringement suit evinced the likelihood that the award was based upon the breach of the parties' agreement because the award reflected the 50/50 profit share division of the agreement; thus, the sum awarded suggested that breach of contract, not trademark infringement, was the act for which the jury punished the defendant. Go Med. Indus. Pty, Ltd. v. Inmed Corp., F. Supp. 2d (N.D. Ga. Jan. 25, 2005).   Punitive damages not recoverable for breach of contract, although defense sounds in tort.    - In action based on contract, with defense offered in amendment based on breach of that contract, although defense sounds in tort, punitive damages are not recoverable. Overstreet v. Schulman, 77 Ga. App. 320, 48 S.E.2d 474 (1948), appeal dismissed, 206 Ga. 504, 57 S.E.2d 589 (1950).    After a real estate agent's judgment against an owner for tortious interference was reversed on appeal, the court's award of punitive damages was also reversed because its other claims, quantum meruit and promissory estoppel, could not support an award of punitive damages. ASC Constr. Equip. USA, Inc. v. City Commer. Real Estate, Inc., 303 Ga. App. 309, 693 S.E.2d 559 (2010).   Bad faith.    - Claim for punitive damages will not lie in cases arising on contracts, even if the breaching party is in bad faith. Builders Transp., Inc. v. Hall, 183 Ga. App. 812, 360 S.E.2d 60, cert. denied, 183 Ga. App. 905, 360 S.E.2d 60 (1987).    Claim for punitive damages will not lie when no other damages are recovered. Horne v. Drachman, 247 Ga. 802, 280 S.E.2d 338 (1981).   Evidence of willful misconduct, malice, want of care which authorizes punitive damages.    - To authorize the imposition of punitive or exemplary damages there must be evidence of willful misconduct, malice, fraud, wantonness, or oppression, or that entire want of care which would raise the presumption of a conscious indifference to consequences. Speir Ins. Agency, Inc. v. Lee, 158 Ga. App. 512, 281 S.E.2d 279 (1981).   Evidence of fraud justifies charge on punitive damages.   - In an action for breach of contract, when there are matters of record relating to fraud, punitive damages can be awarded. Thus, the evidence of the defendant's participation in a fraudulent scheme justifies a district court in putting the question of punitive damages to the jury. Gower v. Cohn, 643 F.2d 1146 (5th Cir. 1981).   Punitive damages are recoverable in breach of contract action if fraud is present.    - Even in action for breach of contract, when there were matters of record relating to fraud, punitive damages can be awarded, for fraud, if found, is tortious conduct. Clark v. Aenchbacher, 143 Ga. App. 282, 238 S.E.2d 442 (1977).   Although the litigation involves contracts of insurance, the plaintiff's alleged fraud, if found by the jury, would amount to tortious conduct, authorizing an award of punitive damages. Guarantee Trust Life Ins. Co. v. Wood, 631 F. Supp. 15 (N.D. Ga. 1984).    Punitive damages awarded to plaintiff and cross-claimant against defendant are appropriate for conversion as a tort. Privitera v. Addison, 190 Ga. App. 102, 378 S.E.2d 312 (1989).    When, on appeal, plaintiff did not enumerate as error the grant of summary judgment to defendant on plaintiff's fraud claim, any claim of error regarding that grant of summary judgment was abandoned; therefore, in the absence of an allegation in the complaint that would support the award of punitive damages, plaintiff's enumeration concerning the grant of summary judgment on the claim for punitive damages was moot. Young v. Turner Heritage Homes, Inc., 241 Ga. App. 400, 526 S.E.2d 82 (1999).    General contractor's punitive damages claim in the contractor's breach of contract action failed under O.C.G.A. § 13-6-10 because the general contractor failed to present evidence establishing a genuine issue of material fact on each of the elements of fraud. Apac-Southeast, Inc. v. Coastal Caisson Corp., 514 F. Supp. 2d 1373 (N.D. Ga. 2007).   Punitive damages unwarranted when fraud only went to plaintiff's inducement to enter contract.    - Because the appellate court could not say that the allegations of fraud went to anything other than a plaintiff's inducement to enter into the contract, and the plaintiff was not entitled to recover damages for both a breach of contract and a tort claim, the judgment was vacated and the case remanded for the plaintiff to have the opportunity to make an election of remedies. Tankersley v. Barker, 286 Ga. App. 788, 651 S.E.2d 435 (2007), cert. denied, No. S07C1821, 2007 Ga. LEXIS 742 (Ga. 2007).   Equitable rescission based on fraud may sound in tort, thus justifying punitive damages.    - A suit for equitable rescission of contract on grounds of fraud and deceit may sound in tort and the jury may find circumstances of fraud sufficiently aggravating to impose punitive damages. Brown v. Techdata Corp., 238 Ga. 622, 234 S.E.2d 787 (1977).    Exemplary damages are not allowed in cases based on breach of express warranty,  since express warranties arise by contract. Simmons v. Taylor Childre Chevrolet-Pontiac, Inc., 629 F. Supp. 1030 (M.D. Ga. 1986).    Mere failure to perform an automobile repair contract according to the contract's terms, whether attributable to negligence or otherwise, was not sufficient in and of itself to support an award of punitive damages. Hub Motor Co. v. Burdakin, 192 Ga. App. 872, 386 S.E.2d 854 (1989).   Real estate contract claim not involving tortious acts.    - A jury award of exemplary damages to the seller of a house in the seller's action on a real estate contract against the buyer had to be stricken from judgment, for the action involved neither allegations nor evidence of tortious conduct by appellant which would support an award of exemplary damages. Jones v. Brooks, 174 Ga. App. 12, 329 S.E.2d 300 (1985).   Violation of duty flowing from relations created by contract.    - Although the relationship between the parties (employer and employee) arose contractually, the employee was not barred from bringing a tort action (and recovering punitive damages) for the violation of a duty flowing from relations between the parties which were created by contract. Atlantic Mechanical Contractors v. Hurston, 185 Ga. App. 511, 364 S.E.2d 638 (1988); Anderson v. Chatham, 190 Ga. App. 559, 379 S.E.2d 793 (1989).    Since the jury found for plaintiffs on both the plaintiffs' negligence and breach of contract claims but awarded damages on the breach of contract claim only, plaintiffs could not receive punitive damages. Menchio v. Rymer, 179 Ga. App. 852, 348 S.E.2d 76 (1986).   Failure to charge which of multiple counts will support punitive damages.    - It was error to deny the defendant's motion for new trial on the issue of punitive damages when plaintiff sued defendant on two counts, only one of which could support an award of punitive damages, but the trial court's charge did not so indicate and the Court of Appeals was, therefore, unable to determine the count on which the jury hinged the jury's award of punitive damages. Marriott Corp. v. American Academy of Psychotherapists, Inc., 157 Ga. App. 497, 277 S.E.2d 785 (1981).   Upon reversal of tort recovery, punitive damages reversed.    - Since a claim for punitive damages will not lie in cases arising on contracts, having reversed the tort recovery, the appellate court must accordingly also reverse the award of punitive damages. Ebco Gen. Agency v. Mitchell, 186 Ga. App. 874, 368 S.E.2d 782, cert. denied, 186 Ga. App. 917, 368 S.E.2d 782 (1988).    Award of specific performance does not, as a matter of law, bar a party from recovering attorney fees or punitive damages. Clayton v. Deverell, 257 Ga. 653, 362 S.E.2d 364 (1987).   No recovery since parent company was not a stranger to subsidiary's contract.   - Insured could not sustain a claim that the parent insurance company interfered with a policy issued by its subsidiary and induced the subsidiary to breach the policy because the parent company could not be a stranger to the subsidiary's contractual relations; therefore, the insured's claims for tortious interference with contractual relations and punitive damages arising out of that tortious interference were dismissed for failure to state a claim. Perry v. Unum Life Ins. Co. of Am., 353 F. Supp. 2d 1237 (N.D. Ga. 2005).    Cited in Goins v. Western R.R., 68 Ga. 190 (1881); Chase v. Western Union Tel. Co., 44 F. 554, 10 L.R.A. 464 (N.D. Ga. 1890); Hadden v. Southern Messenger Serv., 135 Ga. 372, 69 S.E. 480 (1910); Bennett v. Tucker & Pennington, 32 Ga. App. 288, 123 S.E. 165 (1924); Copeland v. Dunehoo, 36 Ga. App. 817, 138 S.E. 267 (1927); Carlan v. Fidelity & Cas. Co., 55 Ga. App. 271, 190 S.E. 47 (1937); Georgia Power Co. v. Banks, 56 Ga. App. 774, 194 S.E. 63 (1937); Cain v. Tuten, 82 Ga. App. 102, 60 S.E.2d 485 (1950); Nichols v. Williams Pontiac, Inc., 95 Ga. App. 752, 98 S.E.2d 659 (1957); Bigelow-Sanford Carpet Co. v. Goodroe, 98 Ga. App. 394, 106 S.E.2d 45 (1958); Rhine v. Sanders, 100 Ga. App. 68, 110 S.E.2d 128 (1959); Pure Oil Co. v. Dukes, 101 Ga. App. 786, 115 S.E.2d 449 (1960); Jones v. Central Bldrs. Supply Co., 217 Ga. 190, 121 S.E.2d 633 (1961); Kilgore v. National Life & Accident Ins. Co., 110 Ga. App. 280, 138 S.E.2d 397 (1964); Siler v. Gunn, 117 Ga. App. 325, 160 S.E.2d 427 (1968); Turpin v. North Am. Acceptance Corp., 119 Ga. App. 212, 166 S.E.2d 588 (1969); Cohen v. Garland, 119 Ga. App. 333, 167 S.E.2d 599 (1969); Murray v. Americare-Medical Designs, Inc., 123 Ga. App. 557, 181 S.E.2d 871 (1971); McMichen v. Martin Burks Chevrolet, Inc., 128 Ga. App. 482, 197 S.E.2d 395 (1973); Eskew v. Camp, 130 Ga. App. 779, 204 S.E.2d 465 (1974); Wallace v. Bleakman, 131 Ga. App. 856, 207 S.E.2d 254 (1974); F.N. Roberts Pest Control Co. v. McDonald, 132 Ga. App. 257, 208 S.E.2d 13 (1974); Liberty Mut. Ins. Co. v. Coburn, 132 Ga. App. 859, 209 S.E.2d 655 (1974); Brown v. Hilton Hotels Corp., 133 Ga. App. 286, 211 S.E.2d 125 (1974); Wilson v. Strange, 235 Ga. 156, 219 S.E.2d 88 (1975); Kaplan v. Sanders, 136 Ga. App. 902, 222 S.E.2d 630 (1975); Spurlock v. Commercial Banking Co., 138 Ga. App. 892, 227 S.E.2d 790 (1976); Rosenberg v. Mossman, 140 Ga. App. 694, 231 S.E.2d 417 (1976); Corrosion Control, Inc. v. William Armstrong Smith Co., 148 Ga. App. 75, 251 S.E.2d 49 (1978); Four Oaks Properties, Inc. v. Carusi, 156 Ga. App. 422, 274 S.E.2d 783 (1980); Blank v. Preventive Health Programs, Inc., 504 F. Supp. 416 (S.D. Ga. 1980); Stroud v. Elias, 247 Ga. 191, 275 S.E.2d 46 (1981); Raybestos-Manhattan, Inc. v. Friedman, 156 Ga. App. 880, 275 S.E.2d 817 (1981); Mayfield v. Ideal Enters., Inc., 157 Ga. App. 266, 277 S.E.2d 62 (1981); Alewine v. City Council, 505 F. Supp. 880 (S.D. Ga. 1981); Alliance Transp., Inc. v. Mayer, 165 Ga. App. 344, 301 S.E.2d 290 (1983); Parsells v. Orkin Exterminating Co., 172 Ga. App. 74, 322 S.E.2d 91 (1984); Bekele v. Ryals, 177 Ga. App. 445, 339 S.E.2d 655 (1986); Towery v. Massey, 179 Ga. App. 61, 345 S.E.2d 90 (1986); Bank S. v. Harrell, 181 Ga. App. 64, 351 S.E.2d 263 (1986); Kauka Farms, Inc. v. Scott, 256 Ga. 642, 352 S.E.2d 373 (1987); Sasser v. Mixon Contracting, Inc., 181 Ga. App. 710, 353 S.E.2d 525 (1987); Braddy v. Morgan Oil Co., 183 Ga. App. 157, 358 S.E.2d 305 (1987); Metro Complete Servs., Inc. v. Liberty Mut. Ins. Co., 188 Ga. App. 221, 372 S.E.2d 491 (1988); Ideal Pool Corp. v. Baker, 189 Ga. App. 739, 377 S.E.2d 511 (1988); Hester Enters., Inc. v. Narvais, 198 Ga. App. 580, 402 S.E.2d 333 (1991); Ledbetter v. Ledbetter, 222 Ga. App. 858, 476 S.E.2d 626 (1996); McDuffie v. Argroves, 230 Ga. App. 723, 497 S.E.2d 5 (1998); Taylor v. Powertel, Inc., 250 Ga. App. 356, 551 S.E.2d 765 (2001); Strickland v. CADD Ctrs. of Fla., Inc. (In re Strickland), Bankr. (Bankr. N.D. Ga. May 23, 2007).   RESEARCH REFERENCES   Am. Jur. 2d.   - 22 Am. Jur. 2d, Damages, § 199.   C.J.S.   - 25 C.J.S., Damages, § 195.   ALR.    - Punitive or exemplary damages for breach of contract, other than contracts to marry and actions on statutory bonds, 84 A.L.R. 1345.    Punitive or exemplary damages in action in tort based on fraudulent sale, 165 A.L.R. 614.   Right of principal to recover punitive damages for agent's or broker's breach of duty, 67 A.L.R.2d 952.   Measure and elements of sublessee's damages recoverable from sublessor for latter's failure to exercise option to renew his lease, 94 A.L.R.2d 1345.   Damages to franchisee for failure of franchisor of national brand or service to provide the services or facilities contracted for, 41 A.L.R.3d 1436.   Sufficiency of showing of actual damages to support award of punitive damages - modern cases, 40 A.L.R.4th 11.   Recovery of punitive damages for breach of building or construction contract, 40 A.L.R.4th 110.   Punitive damages: power of equity court to award, 58 A.L.R.4th 844.