Am. Infoage, LLC v. Only Solution Software, LLC.

• Decision Date: 22 February 2022
• Docket Number: A21A1487
• Citation: 362 Ga.App. 706,870 S.E.2d 47
• Parties: AMERICAN INFOAGE, LLC v. ONLY SOLUTION SOFTWARE, LLC.
• Court: Georgia Court of Appeals

362 Ga.App. 706

870 S.E.2d 47

AMERICAN INFOAGE, LLC

v.ONLY SOLUTION SOFTWARE, LLC.

A21A1487

Court of Appeals of Georgia.

February 22, 2022

Aaron Matthew Clark, Atlanta, for Appellant.

Norman H. Cuadra, Lawrenceville, Kevin Joseph Pratt, Suwanee, for Appellee.

Markle, Judge.

Following a trial in this action arising from a commercial lease dispute, a jury awarded the lessee, Only Solutions Software, LLC (OSS), over $700,000 in damages on its claims against the lessor, American Infoage, LLC (AI), for breach of contract, breach of the covenant of quiet enjoyment, and tortious eviction, and nearly $30,000 in attorney fees. AI now appeals from the trial court's denial of its motion for judgment notwithstanding the verdict or, in the alternative, for a new trial, contending that the trial court erred by (1) denying its motion for directed verdict on the breach of contract claim because there was insufficient evidence of OSS's damages; (2) denying its motion for directed verdict on OSS's claim for attorney fees; (3) admitting prejudicial hearsay; and (4) failing to overturn the damages award because it was not supported by the evidence and amounted to a double recovery. For the following reasons, we reverse and vacate the trial court's judgment as to the awards for breach of contract damages and attorney fees, and remand for a new trial as to these issues only. We affirm the trial court's hearsay ruling.

"Following a jury verdict, we view the evidence in the light most favorable to the prevailing party." Cajun Contractors v. Peachtree Property Sub , 360 Ga. App. 390, 861 S.E.2d 222 (2021). So viewed, the record shows that, in February 2018, OSS entered into a one-year commercial lease agreement with AI to rent space at AI's data center to house 24 of OSS's bitcoin miners.¹ The following month, the parties executed a second lease to house 150 of OSS's miners at the data center for two years. Under this agreement, OSS was to pay $15,000 at signing and a monthly fee of $100 per miner stored. According to OSS's sole owner, Gilson Motta, the parties thereafter entered into a third agreement to house an additional 600 miners at a monthly rental fee of $95 per miner. However, AI never signed this third lease.

Approximately five months after the initial lease was signed, AI locked Motta and his employees out of the data center. Although AI's principal, Miller Cooper, denied that Motta had been locked out, OSS allegedly owed AI over $138,000 in back rent at the time. OSS then filed this action seeking injunctive relief to access the data center, and brought multiple claims for breach of contract, breach of the covenant of quiet enjoyment, tortious eviction, and attorney fees pursuant to OCGA § 13-6-11.² AI answered and asserted counterclaims for breach of contract to recover unpaid rent and for attorney fees pursuant to OCGA § 13-6-11, among others.

At trial, Motta testified that AI failed to provide adequate power and cooling in the storage areas as required by the terms of the lease, and that many of the miners were damaged due to water seepage and other defective conditions at the data center. By that time, OSS was storing over 900 miners, most of which were owned by its customers, Bitvest and Tenify. Motta also testified that 60 miners were stolen or removed from the data center, and that AI ultimately locked him and his employees out of the facility for approximately ten days, during which many of the miners became inoperable and could not otherwise be maintained. Motta further explained that OSS was responsible for repairing or replacing its customers’ miners at a loss to his own company.

As to damages incurred by OSS, Motta testified that he had to hire additional employees to monitor and correct conditions at the data center at a cost of $11,603.09. He also testified that OSS spent $5,103.25 to repair damaged miners, and $59,820 to replace the 60 miners that were removed from the facility. Finally, he testified that OSS sustained lost profits in the amount of $185,472 from Bitvest, and $64,032 in lost profits from Tenify, due to the defective conditions at the facility and the inability to enter the data center for ten days. Motta estimated that OSS's total loss amounted to $1.2 million. As to the claim for attorney fees, OSS's counsel testified that his fees were fair and reasonable given his training and experience, and that he billed for the entire case in the aggregate because the individual counts alleged in the complaint were largely related to either the injunction to gain access to the property, the breach of the lease claim, or the tortious eviction claim.

After OSS rested its case, AI moved for a directed verdict as to the breach of contract claim on the ground that OSS had failed to prove its damages, and as to the claim for attorney fees.³ The trial court denied these motions, and the jury returned a verdict in favor of OSS on its claims and on AI's counterclaim. It awarded $378,630 to OSS on the breach of contract claim; $16,706.34 on the quiet enjoyment claim; $309,324 on the tortious eviction claim; and $29,336.92 for attorney fees and costs. Thereafter, the trial court entered judgment on the verdict. AI moved for judgment notwithstanding the verdict or, in the alternative, for a new trial, which the trial court denied. AI now appeals.⁴

1. AI contends that the trial court erred by denying its motions for directed verdict on OSS's breach of contract and attorney fees claims. For the following reasons, we reverse the trial court's judgment as to the awards for breach of contract damages and attorney fees, and remand the case for retrial of these issues.

Where a jury returns a verdict and it has the approval of the trial judge, the same must be affirmed on appeal if there is any evidence to support it as the jurors are the sole and exclusive judges of the weight and credit given the evidence. The appellate court must construe the evidence with every inference and presumption in favor of upholding the verdict, and after judgment, the evidence must be construed to uphold the verdict even where the evidence is in conflict. As long as there is some evidence to support the verdict, the denial of defendant's motion for directed verdict, new trial and JNOV will not be disturbed.

(Citation omitted.) Cajun Contractors , 360 Ga. App. at 393 (1), 861 S.E.2d 222.

(a) Breach of contract claim.

AI first argues that the trial court erred by denying its motion for directed verdict on OSS's breach of contract claim because the evidence of damages was insufficient. Specifically, AI contends that OSS did not prove its damages with reasonable certainty by failing to show any of its expenses, such as rents paid to AI, or any receipt of payments from its customers that would offset its damages. We agree that OSS failed to prove its damages for breach of contract to the requisite degree of certainty.

To succeed on a claim for breach of contract, a plaintiff must prove both the breach and the damages resulting from the breach. See Moore v. Lovein Funeral Home , 358 Ga. App. 10, 12 (1), 852 S.E.2d 876 (2020).

The measure of damages for breach of contract is the amount which will compensate the injured person for a loss which a fulfillment of the contract would have prevented or the breach of it entailed. That is, the injured person is, so far as it is possible to do so by a monetary award, to be placed in the position he would have been if the contract had been fully performed.

(Citation and punctuation omitted.) Caldwell v. Church , 353 Ga. App. 141, 146 (1), 836 S.E.2d 594 (2019). The plaintiff bears the burden of proving its damages "by evidence which furnishes the jury with sufficient data to enable them to calculate the amount with reasonable certainty. Proof of damages cannot be left to speculation, conjecture and guesswork." (Citation and punctuation omitted.) Olagbegi v. Hutto , 320 Ga. App. 436, 439-440 (2), 740 S.E.2d 190 (2013). Pursuant to OCGA § 13-6-8, "[r]emote or consequential damages are not recoverable unless they can be traced solely to the breach of the contract or unless they are capable of exact computation, such as the profits which are the immediate fruit of the contract, and are independent of any collateral enterprise entered into in contemplation of the contract." In evaluating whether the damages flowing from a breach of contract were proven with sufficient certainty, we have required proof of the typical expenses that would have been incurred by a plaintiff had the contract not been breached. See Hosp. Auth. of Charlton County v. Bryant , 157 Ga. App. 330, 331 (2), 277 S.E.2d 322 (1981).

Regarding the recoverability of lost profits, the general rule

is that the expected profits of a commercial venture are not recoverable as they are too speculative, remote, and uncertain. Nevertheless, when the type of business and history of profits make the calculation of profits reasonably ascertainable, lost profits may be recovered. Thus, generally speaking, lost profits may be recovered by a business only if the business has a proven track record of profitability. And although the amount of damages need not be calculated with exact mathematical certainty, a litigant must nonetheless establish lost profits with a reasonable degree of certainty.

(Citations and punctuation omitted.) EZ Green Assocs. v. Ga.-Pacific Corp., 331 Ga. App. 183, 187-188 (2), 770 S.E.2d 273 (2015) ; see also Owens v. Novae, LLC , 357 Ga. App. 240, 244-245 (2), 850 S.E.2d 457 (2020). Moreover, to establish lost profits, the jury "must be provided with figures establishing the business's projected revenue as well as its projected expenses." (Citations and punctuation omitted.) Legacy Academy v. JLK, Inc. , 330 Ga. App. 397, 404 (2), 765 S.E.2d 472 (2014).

Although there is sufficient evidence that AI breached the lease,⁵ the record is lacking any competent evidence from which the jury could calculate, with reasonable certainty, OSS's damages...