Court Opinion

ID: 9590827
Source: CourtListenerOpinion
Date Created: 2023-08-21 23:58:37.178549+00
Date Added: 2024-06-11T17:56:49.550867
License: Public Domain

Beasley, Judge,
concurring specially.
I concur fully in the conclusion but it should be made clear that the only ground relied upon by plaintiff, of the three provided in OCGA § 13-6-11, was bad faith. Apparently the trial court cross-matched it with the measurement for the stubborn litigiousness ground, which was not in issue, and this led to error.
Plaintiff’s complaint alleged solely the bad faith theory as a basis for claiming attorney fees, but he amended it to allege also stubborn litigiousness, the causing of undue expense in the prosecution and presentation of suit, and “recalcitrance.” However, by pretrial order the basis was again limited to bad faith.
The court gave the jury all the charges on the subject requested by both parties, including the whole statute and some principles related to the two grounds other than bad faith, but it clearly stated that the claim for attorney fees was based on a contention that defendants’ actions were in bad faith. Later, in instructing the jury on the verdict form, the court expressly instructed that an award of attorney fees would be proper only if the jury found “that the defendants have been guilty of bad faith in their dealings with the plaintiff *378. . . . "
There were no objections to any of the charges, the jury retired briefly, and a verdict in nearly the full amount of the principal sought,1 plus interest and attorney fees, was returned.
On appeal, plaintiff explains again that he sought attorney fees “for [defendants’] bad faith in their dealings with the [plaintiff].” The question is whether plaintiff’s evidence comes within the statute’s meaning of “bad faith,” as construed by the appellate courts.
Although when the new code was adopted in 1982 the bad faith ground in OCGA § 13-6-11 was facially limited to “bad faith in making the contract,” the four circumscribing words were eliminated by a comprehensive act in 1984, which corrected “typographical, stylistic, and other errors and omissions” in the Code and provided “for necessary or appropriate revisions and modernizations of matters contained” in it. Ga. L. 1984, pp. 22, 35. It does not appear in the reported cases that the limiting words were given much effect in the interim, see, e.g., City of Marietta v. Holland, 252 Ga. 299, 303 (3) (314 SE2d 97) (1984), so the pre-1984 cases dealing with the bad faith ground have not lost their efficacy. For a. case which points out the change, see Ostrom v. Kapetanakos, 185 Ga. App. 728, 729 (2) (365 SE2d 849) (1988).
Thus plaintiff is on solid ground when he asserts that he can recover attorney fees if he shows bad faith in the transaction with defendants, not exclusively bad faith on the part of defendants in making the contract. “ ‘The bad faith referred to has been consistently held by Georgia courts to refer to the conduct of the defendant in his dealings with the plaintiff out of which the suit arose, . . .’” Southern Bell Tel. v. C & S Realty Co., 141 Ga. App. 216, 222 (2) (233 SE2d 9) (1977) (overruled as to another point, Ga.-Car. Brick &c. Co., supra at 752).
Recovery of expenses of litigation on the bad faith ground are sustainable if there is evidence that “the contract was made in bad faith or that the [defendants] breached it as a result of some sinister motive.” California Fed. Savings &c. Assn. v. Hudson, 185 Ga. App. 384, 389 (7) (364 SE2d 582) (1987), quoting Glen Restaurant v. West, 173 Ga. App. 204, 205 (325 SE2d 781) (1984). Accord Hightower v. Gen. Motors Corp., 175 Ga. App. 112 (2) (332 SE2d 336 (1985), aff’d 255 Ga. 349 (338 SE2d 426) (1986). “Bad faith authorizing an award of attorney fees in a contract action must relate to the conduct of entering the contract or to the transaction and dealings out of which *379the cause of action arose, which includes not only the negotiations and formulation of the contract but also performance of the contractual provisions. Edwards-Warren Tire Co. v. Coble, 102 Ga. App. 106, 113-114 (115 SE2d 852) (I960).” Hayes Constr. Co. v. Thompson, 184 Ga. App. 482, 484 (2) (361 SE2d 865) (1987). The jury may award attorney fees “if the defendant has acted in bad faith in the transaction out of which the cause of action arose.” Standard Oil Co. v. Mt. Bethel U. M. Church, 230 Ga. 341 (3) (196 SE2d 869) (1973); Bowman v. Poole, 212 Ga. 261 (3) (91 SE2d 770) (1956). In the contract case of Thibadeau Co. v. McMillan, 132 Ga. App. 842, 843 (1), (2) (209 SE2d 236) (1974), attorney fees for “bad faith” were authorized by evidence the builder knew that defective mortar was being used. Hayes Constr. Co., supra, on the other hand, is a contract case where bad faith was found in evidence of refusal to pay the retainage for contracted work.
Defendants were required to perform by paying, which they did not do. The jury was authorized to find that they manifested bad faith in refusing and failing to pay, under the “any evidence” rule, which applies Ken-Mar Constr. Co. v. Bowen, 245 Ga. 676 (266 SE2d 796) (1980). (Although that appears to have been a stubborn litigiousness case, the rule is broadly stated.) This was more than “mere failure to pay a claim,” which would not be bad faith. Ostrom, supra at 730. Bad faith versus good faith is a question for the jury, to be determined “from consideration of facts and circumstances in the case.” Hodges v. Youmans, 129 Ga. App. 481, 483 (3) (200 SE2d 157) (1973).
The evidence showed that money for Powell’s work had been placed in escrow but the Watsons received it back rather than having any of it disbursed at closing. They did not pay the generally accepted 90 percent at completion with a retainage of 10 percent until all work was completed in a satisfactory manner. They did not pay the general contractor the full price to which he was entitled nor the paint contractor the amount of his contract, although one of the defendants testified that both had been paid in full. He had also told plaintiff that he would have to sue the paint contractor before he paid plaintiff any amount because the painter had not completed the job, but the painter was told that defendant refused to pay the painter any further sums until defendants sued plaintiff. Yet there was evidence that defendant was satisfied with the work of plaintiff. Many of defendants’ complaints were not related to plaintiff’s work or area of responsibility.
Other examples of the bad faith ground are found in Royal Crown Cos. v. McMahon, 183 Ga. App. 543, 546 (4) (359 SE2d 379) (1987) and Sanders v. Hughes, 183 Ga. App. 601, 602 (2) (359 SE2d 396) (1987). The distinction between the bad faith ground, which is asserted here, and the stubborn litigiousness ground, which requires *380the absence of a bona fide controversy, a genuine dispute, appears in the example of Nestle’ Co. v. J. H. Ewing & Sons, 153 Ga. App. 328, 332 (4) (265 SE2d 61) (1980). Some cases, however, do not make clear the distinction, and the principles related to one ground may be found, at least in wording, in considering another ground. See EBCO Gen. Agency v. Mitchell, 186 Ga. App. 874, 875 (2) (368 SE2d 782) (1988). It happened below, and thus I agree that the error must be corrected.
Decided January 24, 1989
Rehearing denied February 21, 1989
Clyde M. Urquhart, for appellant.
William E. Dismer, for appellees.

 The amount of the verdict in relation to the size of the demand is not conclusive evidence one way or the other, although it is relevant under the bad faith, as well as the stubborn litigiousness, theory. Ga.-Car. Brick &c. Co. v. Brown, 153 Ga. App. 747, 750 (2B) (266 SE2d 531) (1980).