Citadel Corp. v. All-South Subcontractors, Inc.

• Decision Date: 07 July 1995
• Docket Number: ALL-SOUTH,Nos. A95A0783,A95A0784,s. A95A0783
• Citation: 217 Ga.App. 736,458 S.E.2d 711
• Parties: CITADEL CORPORATION v.SUBCONTRACTORS, INC.SUBCONTRACTORS, INC. v. CITADEL CORPORATION.
• Court: Georgia Court of Appeals

Page 711

458 S.E.2d 711

217 Ga.App. 736

CITADEL CORPORATION v. ALL-SOUTH SUBCONTRACTORS, INC.

ALL-SOUTH SUBCONTRACTORS, INC. v. CITADEL CORPORATION.

Nos. A95A0783, A95A0784.

Court of Appeals of Georgia.

July 7, 1995.

Smith, Currie & Hancock, Charles W. Surasky, George Q. Sewell, Atlanta, for appellant.

Drew, Eckl & Farnham, T. Bart Gary, April Rich, Robert J. Moye, III, Atlanta, for appellee.

McMURRAY, Presiding Judge.

These appeals emanate from the same action which spawned an appeal in Citadel Corp. v. Sun Chemical Corp., 212 Ga.App. 875, 443 S.E.2d 489. The case originated in the trial court when Citadel Corporation ("Citadel") brought an action against Sun Chemical Corporation ("Sun Chemical") and others to recover sums allegedly due under construction contracts whereby Citadel agreed to build a manufacturing plant ("the plant") and administration building for the predecessor of Sun Chemical. Sun Chemical then filed a counterclaim for "breach of contract, contending delay in completing the plant, defective floor coating and damage to [certain inventory, i.e.,] XLR plates." Sun Chemical alleged (in the pre-trial order) that the "damages to XLR plates [were the result] of defective roofing...." Citadel responded with a third-party complaint against its roofing subcontractor, All-South Subcontractors, Inc. ("All-South"), seeking to recover any damages, costs and attorney fees related to defense of Sun Chemical's counterclaim. This indemnity claim is based upon the following provision in the roofing subcontract: "[All-South] shall indemnify, hold harmless and defend [Citadel] against all claims, damages, losses and expenses, including attorney's fees, arising out of or resulting from the performance of [All-South's] Work under this Subcontract, provided that any such claim, damage, loss, or expense, (a) is attributable to ... destruction of tangible property ... and (b) is caused in whole or in part by any negligent act or omission of [All-South] or is caused by or arises out of the use of any products, material or equipment furnished by [All-South], regardless of whether it is caused in part by a party indemnified hereunder."

After an extended trial, a jury returned special verdicts finding that Citadel is entitled to certain damages on its claims against Sun Chemical; that Sun Chemical is entitled to zero damages as to its counterclaim against Citadel for damage to the "XLR plates" and that Citadel is entitled to zero damages as to its third-party claim against All-South for indemnification. After entry of judgment on the verdicts, Citadel filed a direct appeal in Case No. A95A0783 and All-South filed a cross-appeal in Case No. A95A0784. Held:

1. Citadel contends the jury's failure to award attorney fees under its third-party claim against All-South for reimbursement of costs incurred in defending against Sun Chemical's counterclaim is contrary to law and not supported by the evidence. Citadel argues that it is entitled to a judgment (upon remand to the trial court) for the total amount of its attorneys' billings as reflected on itemized statements introduced into evidence at trial. In response and in its cross-appeal, All-South asserts that Citadel failed to meet its burden of demonstrating a specific entitlement to attorney fees under the indemnity agreement. ¹

" ' "An award of attorney fees is unauthorized if [Citadel] failed to prove the actual costs of [their attorneys] and the reasonableness of those costs. (Cit.)" Fiat Auto U.S.A. v. Hollums, 185 Ga.App. 113, 116(5), 363 S.E.2d 312 (1987).' Southern Cellular Telecom v. Banks, 209 Ga.App. 401, 402, 433 S.E.2d 606." Mitcham v. Blalock, 214 Ga.App. 29, 31(2), 447 S.E.2d 83. In the cases sub judice, Citadel relies on billing statements submitted by its attorneys as proof of costs expended in defense of the XLR-plate counterclaim, but fails to point to the testimony of any party with personal knowledge of the services purportedly rendered and reported therein. Consequently, the billing statements constitute nothing more than "hearsay, and hearsay, even when admitted into evidence without objection, lacks probative value to establish any fact. Howell Mill/Collier Assoc. v. Pennypacker's, 194 Ga.App. 169, 171(2), 390 S.E.2d 257." Mitcham v. Blalock, 214 Ga.App. 29, 31(2), 32, 447 S.E.2d 83, supra. However, even assuming the billing statements are admissible as proof of the matters asserted therein, Citadel failed to distinguish between the costs attributable to fees incurred in defense of the XLR-plate counterclaim and those incurred in enforcing the indemnity agreement.

The indemnity clause in the roofing subcontract pertinently provides that "[All-South] shall indemnify, hold harmless and...