General Hospitals of Humana, Inc. v. Jenkins

• Decision Date: 15 September 1988
• Docket Number: No. 76735,76735
• Citation: 374 S.E.2d 739,188 Ga.App. 825
• Parties: GENERAL HOSPITALS OF HUMANA, INC. v. JENKINS.
• Court: Georgia Court of Appeals

Page 739

374 S.E.2d 739

188 Ga.App. 825

GENERAL HOSPITALS OF HUMANA, INC. v. JENKINS.

No. 76735.

Court of Appeals of Georgia.

Sept. 15, 1988.

Rehearing Denied Oct. 18, 1988.

Certiorari Denied Jan. 6, 1989.

Kevin E. Grady, Reta G. Jordan, Atlanta, Michael E. Sumner Newnan, for appellant.

Louis K. Polonsky, Atlanta, for appellee.

SOGNIER, Judge.

Ben H. Jenkins, M.D., brought suit against General Hospitals of Humana, Inc., alleging tortious interference with business relations, tortious interference with contract rights, restraint of trade, and intentional infliction of emotional distress, and seeking a declaratory judgment in regard to the validity of a lease agreement. At a pretrial hearing, a consent order was entered allowing Jenkins to remain in possession of disputed rental premises and pay the monthly rent pending a trial on the declaratory judgment portion of the case and a claim for expenses and attorney fees. Those issues were tried by a jury, whose answers to interrogatories determined, inter alia, that a valid oral lease existed and that Jenkins was entitled to $15,000 for attorney fees and expenses of litigation. Final judgment was entered as to these issues on the jury's special verdict pursuant to OCGA § 9-11-54(b), and General Hospitals of Humana appeals.

The record reveals that appellee, a physician who had been practicing medicine in the community for over thirty years and had been instrumental in establishing the county hospital which is now operated by appellant, had rented office space from appellant adjacent to appellant's hospital facility in Newnan pursuant to a written lease from April 1, 1984 until March 31, 1987. At the time appellee agreed to move his medical offices into that space, he was told he needed no renewal option in the lease, but would be able to renew his lease as long as he paid rent. At no time during the course of the three-year written lease was appellee ever in default in his rental payments. However, during that time, a change occurred in appellant's administration and, although appellee had received recognition for his services to the hospital, differences in regard to administration policies (some of which are the subject of the remaining counts of the lawsuit but were not before the court in this trial) developed between appellee and Jack D. Davis, the executive director of appellant's hospital.

Shortly before appellee's written lease expired, he was approached about renewing his lease by the associate executive director of the hospital, Howard Lott, whose duties included the preparation and presentation of leases to physician tenants. All discussions concerning lease renewal took place between appellee and Lott and, after several discussions regarding lease terms, an agreement was finally reached on a one-year lease at a rate 10 percent higher than the rate in the old lease, which was identical to the increases being given the other doctor tenants. Lott then prepared the lease containing the terms to which they had agreed, including a March 31, 1988 termination date, and delivered it to appellee's office. Appellee signed the lease but did not immediately return it to Lott. Thereafter, on May 13, 1987, while appellee was on vacation, Davis wrote appellee a letter attempting to rescind the lease negotiated by Lott and advising appellee to vacate the premises. That demand was repeated in a letter from Davis dated June 11, 1987, stating that since the offer to lease space had been rescinded by the May 13 letter, and "we have not communicated since that correspondence, I do want you to know that we intend to have you vacate [the premises] on or about June 13, 1987...."

Appellee filed the instant action, alleging that because of the past conduct and actions of appellant and Lott, appellant should be estopped from contending that Lott did not have the authority to discuss, prepare, present and offer the renewal to him or to bind appellant to those terms. He further contended that appellant's actions had been in bad faith, stubbornly litigious, and had caused him unnecessary trouble and expense, thereby entitling him to recover reasonable attorney fees and expenses of litigation should the jury find that he was entitled to remain in the office under the terms of an oral lease.

Lott testified at trial that there was no question in his mind that he and appellee agreed on the essential terms of length and rental rate that were typed into the standard renewal form that was submitted by him for appellee's signature. Appellee testified that he failed to return the signed renewal lease to appellant immediately because he "didn't think it was anything so earth shaking that I had to do it right then. I knew we had a deal anyway."

1. In its first four enumerations of error, appellant contends the trial court erred by denying its motion for judgment n.o.v. or for new trial, alleging the absence of any evidence to support the jury's findings that there was a valid lease agreement. We note initially that we agree with appellant that although the purported oral contract expired on March 31, 1988, and appellee no longer occupies the premises, the correctness vel non of the jury's determinations on the validity of the lease must still be addressed because the award of attorney fees and expenses of litigation depended on the jury's determination of the lease issues.

Appellant argues that a lease agreement could not have been established because the condition precedent in the written contract requiring the signatures of its officers was never satisfied. We find this argument fallacious. The written lease was not executed and, therefore, its terms and conditions never became effective. Nor did appellee seek specific performance of the written lease. Rather, he sought a determination that, based on the law and the evidence presented at trial, an oral lease resulted between him and appellant for a period of one year at a rental rate of 10 percent in excess of the rate in the previous lease. OCGA § 44-7-2(a) provides that "[c]ontracts creating the relationship of landlord and tenant for any time not exceeding one year may be by parol." Appellant's reliance on 20/20 Vision Center v. Hudgens, 256 Ga. 129, 345 S.E.2d 330 (1986), and Seligman v. Savannah Wholesale Co., 185 Ga.App. 250, 363 S.E.2d 785 (1987), is misplaced, as the lessees in those cases did not seek to establish valid oral leases but specifically sought to enforce written contracts.

It was undisputed here that Lott and appellee agreed upon a renewal lease upon the terms discussed above, and that both considered the matter to be resolved. There was no evidence that either party contemplated that the oral agreement would become effective only if it was reduced to writing and signed by appellant's officers, although they both expected the written lease would be executed. The sole probative value of the unexecuted written lease would have been to demonstrate this expectation or, alternatively, the intention not to enter into an oral lease. The jurors had this evidence before them, and no doubt considered it in arriving at their verdict. "Considering all of the evidence together, the jury was authorized to find that there was a 'meeting of the minds' as to all of the terms of the contract and a present agreement to lease the premises. Although the parties contemplated the future execution of a written lease agreement, the jury was authorized to find that a binding oral agreement was in effect, and the failure to sign the written instrument did not affect the validity of the oral agreement." Merry v. Ga. Big Boy Mgt., 135 Ga.App. 707, 708(1), 218 S.E.2d 694 (1975).

2. In its final two enumerations of error appellant contends the trial court erred by denying its motions for judgment n.o.v. and for a new trial because the award of attorney fees and expenses of litigation pursuant to OCGA § 13-6-11 was improper in this declaratory judgment case.

We do not agree with appellee that we are precluded from addressing the merits of appellant's enumerations of error pertaining to the award of attorney fees and expenses of litigation in this action. Appellee argues, relying on Joseph v. Bray, 182 Ga.App. 131(1), 354 S.E.2d 878 (1987) and Tanner v. Gilleland, 186 Ga.App. 377, 367 S.E.2d 257 (1988), that because this issue was not raised in appellant's motions for a directed verdict, it may not be raised on appeal. However, the record reveals that appellant objected at trial to the introduction of any evidence pertaining to attorney fees, on the ground that attorney fees and expenses of litigation were improper here. Appellant's post-trial motion, which also raises this ground, was not only a motion for judgment n.o.v. but also, alternatively, a motion for a new trial. See OCGA § 9-11-50(b). Thus, although appellant may not raise the denial of its motion for judgment n.o.v. as to this issue because the grounds were not specified in its motions for directed verdict, see Glenridge Unit Owners Assn. v. Felton, 183 Ga.App. 858(2), 360 S.E.2d 418 (1987), it may enumerate as error the denial of its motion for new trial as to the introduction of evidence regarding attorney fees, having properly objected to the introduction of this evidence at trial. See OCGA § 5-5-22.

Turning, then, to the merits of appellant's enumeration, we find that the award of attorney fees and expenses of litigation is fatally flawed in this context. Although the complaint, as amended, sought damages for various alleged torts in addition to seeking a declaratory judgment, and we intimate no opinion as to the recoverability of expenses of litigation and attorney fees in connection with those claims, those claims are still pending and have not yet been tried. It is undisputed that the sole issue actually tried and now reviewed here was the declaratory judgment, to which the claim for attorney fees was appended.

The purpose of a declaratory judgment is "to...