Canton Plaza, Inc. v. Regions Bank, Inc.

749 S.E.2d 825, 325 Ga. App. 361, 2013 Fulton County D. Rep. 3250, 2013 WL 5614340, 2013 Ga. App. LEXIS 828
CourtCourt of Appeals of Georgia
DecidedOctober 15, 2013
DocketA13A1159
StatusPublished
Cited by5 cases

This text of 749 S.E.2d 825 (Canton Plaza, Inc. v. Regions Bank, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Canton Plaza, Inc. v. Regions Bank, Inc., 749 S.E.2d 825, 325 Ga. App. 361, 2013 Fulton County D. Rep. 3250, 2013 WL 5614340, 2013 Ga. App. LEXIS 828 (Ga. Ct. App. 2013).

Opinion

Ray, Judge.

Canton Plaza, Inc. and Chaim Oami (“the plaintiffs”) appeal from an award of attorney fees and expenses in favor of Regions Bank, Inc. (“the Bank”) under OCGA § 9-11-68, Georgia’s offer of settlement statute. The plaintiffs contend that the trial court erred in awarding the Bank its attorney fees and expenses because the Bank failed to segregate its recoverable fees and expenses from those which were nonrecoverable, and because the award, as against plaintiff Oami, was inappropriate. For the following reasons, we affirm in part, vacate in part, and remand the case with direction.

The underlying facts are more fully set forth in Canton Plaza v. Regions Bank, 315 Ga. App. 303 (732 SE2d 449) (2012), where we affirmed the trial court’s grant of directed verdicts on the parties’ respective claims. In pertinent part, the facts show that the plaintiffs filed a complaint against the Bank, asserting claims for breach of contract and wrongful foreclosure. The Bank asserted counterclaims against the plaintiffs for attorney fees and litigation expenses based on the contractual provisions of the underlying loan documents. Prior to trial, the Bank made a written offer of settlement in the amount of $15,000, which the plaintiffs did not accept. When the case proceeded to trial, the Bank was awarded a directed verdict as to the plaintiffs’ claims, and the plaintiffs were awarded a directed verdict on the [362]*362Bank’s counterclaims. Thereafter, the Bank filed a motion for attorney fees and expenses pursuant to OCGA § 9-11-68 (b) (1), based on the plaintiff’s earlier rejection of its pre-judgment offer of settlement. After a hearing, the trial court granted the Bank’s motion and awarded it $78,500 for attorney fees and litigation expenses.

Under OCGA § 9-11-68 (a),1 a party may serve the opposing party with a written offer to settle a tort claim for a specified amount of money in exchange for the dismissal of the claim or entry of judgment in the specified amount.

OCGA § 9-11-68 (b) (1) provides:

If a defendant makes an offer of settlement which is rejected by the plaintiff, the defendant shall be entitled to recover reasonable attorney’s fees and expenses of litigation incurred by the defendant or on the defendant’s behalf from the date of the rejection of the offer of settlement through the entry of judgment if the final judgment is one of no liability. . . .

1. The plaintiffs argue that the trial court erred in granting the Bank’s motion for attorney fees and expenses under OCGA § 9-11-68 because the plaintiffs had asserted claims for both breach of contract and wrongful foreclosure in their complaint, and because the Bank had failed to segregate the attorney fees and expenses it incurred in defending against the wrongful foreclosure claim from the fees and expenses it incurred in defending against the breach of contract claim. Specifically, the plaintiffs argue that the Bank was only entitled to fees and expenses associated with the wrongful foreclosure (tort) claim. However, the plaintiffs’ breach of contract claim is premised entirely on the allegations that the Bank improperly initiated foreclosure proceedings. Therefore, we agree with the trial court’s finding that the “[plaintiffs’ case was for all practical purposes a tort action arising from an alleged attempted wrongful foreclosure.” Furthermore, the record shows that counsel for the Bank was required to perform the same tasks to prepare and present its defense at trial, irrespective of the specific claims asserted by the plaintiffs. Therefore, we find that the plaintiffs’ argument lacks merit.

[363]*3632. The plaintiffs argue that the trial court erred in finding plaintiff Oami liable for attorney fees and expenses under OCGA § 9-11-68. The plaintiffs contend that Oami was merely a guarantor of the loan for the property at issue and, because he had no interest in the subject property, he could not bring a valid wrongful foreclosure (tort) claim against the Bank. Pretermitting whether Oami had standing to assert the wrongful foreclosure claim, the record is quite clear that he joined in asserting the claim. If Oami did not have a valid claim against the Bank for wrongful foreclosure, that fact cannot serve as a basis for disallowing the recovery of attorney fees and expenses associated in defending his claim. Indeed, “[t]he clear purpose of [OCGA § 9-11-68] is to encourage litigants in tort cases to make and accept good faith settlement proposals in order to avoid unnecessary litigation.” (Citation and punctuation omitted; emphasis supplied.) Smith v. Baptiste, 287 Ga. 23, 29 (2) (694 SE2d 83) (2010). Therefore, we find no merit in the plaintiffs’ argument.

3. The plaintiffs also argue that the award was improper because the Bank failed to segregate the fees and expenses associated with prosecuting its counterclaims. We agree.

In this case, the Bank’s right to attorney fees and litigation expenses under OCGA § 9-11-68 was established by the prior offer of settlement and the subsequent directed verdict of no liability with regard to the plaintiffs’ claims. But in order for the Bank to recover attorney fees and litigation expenses under this statute, the reasonableness of its requested fees and expenses must be shown. See OCGA § 9-11-68 (b) (1).

Here, the Bank’s counsel did not testify as to how much of the total amount billed was associated with defending against the plaintiffs’ claims as opposed to prosecuting its unsuccessful counterclaims. Further, it is not possible to discern from the billing statements submitted by the Bank’s counsel how much of the time and expenses billed were attributable to the defense of the plaintiffs’ claims. See Citadel Corp. v. All-South Subcontractors, 217 Ga. App. 736, 738 (1) (458 SE2d 711) (1995) (no evidence was presented from which the factfinder could determine what portion of time spent was attributable to recoverable fees); Southern Cellular Telecom v. Banks, 209 Ga. App. 401, 402 (433 SE2d 606) (1993) (trial court could not determine what were recoverable fees where time sheets included many entries consisting only of statements that a conference was held, a letter was written, or a telephone call was made). Compare Doe v. HGI Realty 254 Ga. App. 181, 184 (561 SE2d 450) (2002) (award of attorney fees under OCGA § 9-15-14 was proper where majority of the time sheets submitted by counsel related solely to counsel’s work regarding the [364]

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749 S.E.2d 825, 325 Ga. App. 361, 2013 Fulton County D. Rep. 3250, 2013 WL 5614340, 2013 Ga. App. LEXIS 828, Counsel Stack Legal Research, https://law.counselstack.com/opinion/canton-plaza-inc-v-regions-bank-inc-gactapp-2013.