Associated Software Consultants Organization, Inc. v. Wysocki

• Decision Date: 30 October 1985
• Docket Number: No. 70658,70658
• Citation: 177 Ga.App. 135,338 S.E.2d 679
• Parties: ASSOCIATED SOFTWARE CONSULTANTS ORGANIZATION, INC. v. WYSOCKI
• Court: Georgia Court of Appeals

Page 679

338 S.E.2d 679

177 Ga.App. 135

ASSOCIATED SOFTWARE CONSULTANTS ORGANIZATION, INC. v. WYSOCKI

No. 70658.

Court of Appeals of Georgia.

Oct. 30, 1985.

Rehearing Denied Dec. 3, 1985.

L. Brown Bivens, Atlanta, for appellant.

E. Kendrick Smith, Atlanta, for appellee.

BEASLEY, Judge.

ASCO hired Wysocki in June, to begin August 2, after a recruiting company engaged by it located plaintiff. ASCO paid $6,000 in recruiting fees.

Wysocki resigned at the end of the following May and demanded $2,793.11 unpaid salary and expenses. ASCO refused, contending that by written agreement Wysocki had consented to reimburse the company for the recruiting fee should he leave before completing one year's employment. ASCO's position was that to partially satisfy this obligation it had the right to retain unpaid earnings. Denying such an agreement existed, Wysocki sued to recover the unpaid salary and expenses, vacation pay, legal expenses, and punitive damages for fraud. ASCO counterclaimed for the $6,000 recruiting fee plus $6,000 reimbursement for other expenses, but abandoned the latter.

At trial ASCO relied upon three documents to support its defense that it owed nothing and its claim that Wysocki had agreed to reimburse the recruiting fee: 1) a memo of June 27 from the general manager extending an offer of employment and including: "You will be asked to sign two agreements upon starting employment: the company Conflict-of-Interest agreement; and an agreement to reimburse the company for the recruitment fees if you leave ASCO's employ within the first 12 months"; 2) a letter from Wysocki dated June 29 addressed to ASCO's general manager, stating in part: "I have reviewed the terms of employment thoroughly and I find them more than adequate and readily acceptable"; 3) a purported copy of Wysocki's agreement to reimburse dated August 2, stating that as between ASCO and Wysocki: "1. The Company agrees to pay ... the fee arising from the[ir] referral of the Employee to the Company ($6,000.00). 2. The Employee agrees that should he terminate his employment with the Company for any reason prior to the completion of one year's employment ..., he will reimburse the Company for the full amount. 3. The Employee agrees that the Company may retain all unpaid earnings, bonuses, and termination pay toward the satisfaction of this obligation." There was some evidence that although this copy was signed only by ASCO's president, the original, now unavailable due to a ransacking of personnel files by an unknown intruder, was signed by Wysocki. There was also evidence that Wysocki never signed any agreement.

At the conclusion of the evidence, ASCO moved for a directed verdict on attorney fees, which was denied. Although it did not object at the precharge conference to the requests to charge on attorney fees and punitive damages, it did take exception to the punitive damages instructions when the court gave opportunity following the charge. It, as well as plaintiff, had requested instructions on the elements of fraud. They were given to the jury twice, once during the charge and again when the jury asked for them.

The verdict and judgment were for Wysocki on his entire claim, including attorney fees and $5,000 punitive damages, and for Wysocki on ASCO's counterclaim. ASCO's motion for judgment notwithstanding the verdict or in the alternative for new trial, as to both the attorney fees and punitive damages, was denied.

Three errors are enumerated: as to attorney fees, that the court erred in denying the motion for directed verdict and the motion for judgment n.o.v. or new trial; as to punitive damages, that the court erred in so charging and in denying the motion for new trial thereon; and, as to "mutual departure," that the court erred in charging on the subject.

1. Attorney fees. ASCO asserts that Wysocki is not entitled to attorney fees because "the evidence demonstrated a genuine dispute over the terms of the employment and a bona fide controversy relating thereto, and there was no evidence to support ... attorney's fees...."

OCGA § 13-6-11 authorizes litigation expenses "where the defendant has acted in bad faith, has been stubbornly litigious, or has caused the plaintiff unnecessary trouble and expense." All three circumstances were claimed and charged, but plaintiff had to demonstrate the existence of only one of the three enumerated grounds. Allen v. Brackett, 165 Ga.App. 415, 421(3), 301 S.E.2d 486 (1983).

"[T]he statutory bad faith must have arisen out of the transaction on which the cause of action is predicated rather than defendant's conduct in defending the case. [Cits.]" Id. "[B]ad faith ... other than mere refusal to pay a just debt may authorize the jury to award attorney fees, provided it is not prompted by an honest mistake as to one's rights or duties but by some interested or sinister motive." Jordan Bridge Co. v. I.S. Bailey, Jr., Inc., 164 Ga.App. 124, 125, 296 S.E.2d 107 (1982). Our recent decision in Glen Restaurant v. West, 173 Ga.App. 204, 325 S.E.2d 781 (1984), recites that "there may be bad faith in carrying out the provisions of the contract sufficient to support the award,..."

"As to whether the defendant was 'stubbornly litigious or caused the plaintiff unnecessary trouble and expense, mere refusal to pay a disputed claim, without suit is not sufficient to award attorney fees. [Cits.]" Allen, supra, 165 Ga.App. at 421, 301 S.E.2d 486. "The key to the test is whether there is a 'bona fide controversy.' Where none exists, forcing a plaintiff to resort to the courts in order to collect is plainly causing him to go to 'unnecessary trouble and expense.' " Franchise Enterprises v. Ridgeway, 157 Ga.App. 458, 460(2), 278 S.E.2d 33 (1981).

There was evidence that ASCO fabricated the existence of the agreement to reimburse and tried to enforce its terms against Wysocki. He testified that he had never signed an agreement to reimburse, never agreed to its terms, and had not seen the alleged agreement until he had already submitted his resignation and requested his unpaid earnings. It was then, Wysocki testified, that the president of the company, in refusing his request, showed him the copy of the alleged agreement. Why it was signed only by the company president and not Wysocki was not explained. The president himself testified that, although his lawyers had drafted the "agreement" and had directed the general manager to obtain Wysocki's signature, he had never seen the document executed and that to his knowledge Wysocki never signed it and "it could very well have been unsigned." The company's general manager at the time, who negotiated the terms of Wysocki's employment, testified that Wysocki never executed the written agreement to reimburse and that its terms did not accurately reflect the true terms of Wysocki's employment.

The only testimony in support of the company's position that Wysocki had signed an agreement to reimburse was that of the company's administrative manager. She said she had seen Wysocki's signature on the original agreement but that it was now unavailable because someone had broken into her office and stolen it.

The jury could believe and apparently did believe that Wysocki never executed an agreement nor agreed to reimburse, that the company was aware of this, and that its refusal to pay Wysocki and demand reimbursement for the recruitment...