Magnetic Resonance Plus v. IMAGING SYSTEMS
| Decision Date | 02 March 2001 |
| Docket Number | No. S00G0793.,S00G0793. |
| Citation | 543 S.E.2d 32,273 Ga. 525 |
| Parties | MAGNETIC RESONANCE PLUS, INC. v. IMAGING SYSTEMS INTERNATIONAL et al. |
| Court | Georgia Supreme Court |
OPINION TEXT STARTS HERE
Adam R. Gaslowitz & Associates, Adam R. Gaslowitz, Walter Hamberg III, Atlanta, for appellant.
Chambers, Chambers & Chambers, John W. Chambers, Sr., John W. Chambers, Jr., Timothy D. Chambers, Atlanta, for appellee.
Magnetic Resonance Plus ("MRP") filed suit against North Georgia Diagnostic Imaging ("NGDI") and its managing agent Imaging Systems International ("ISI"), seeking money damages and injunctive relief. MRP had agreed to service and repair magnetic resonance imaging equipment for NGDI under the terms of a contract drafted by MRP. Several months later, NGDI became so dissatisfied with MRP's performance that it terminated the agreement without giving MRP the required 30 days notice and opportunity to cure provided for in the contract. Following a bench trial, the trial court found a breach of the contract by NGDI and awarded MRP $21,584.37 in damages for lost profits and $32,002 for attorney fees pursuant to a contract provision that stipulated: "In the event any proceeding or lawsuit is brought by MRP or [customer] in connection with the Agreement, the prevailing party in such proceeding shall be entitled to receive its ... reasonable attorney's fees." On appeal, the Court of Appeals vacated the award for lost profits because the contract specifically shielded both parties from liability for "any lost profits or any incidental, special, or consequential damages relating to this Agreement." The Court of Appeals also vacated the award of attorney fees and remanded the case for the trial court to consider whether MRP was entitled to attorney fees as the prevailing party even though no monetary damages were awarded. Imaging Systems Intl. v. Magnetic Resonance Plus, 227 Ga. App. 641, 490 S.E.2d 124 (1997). On remand, the trial court found that MRP remained the prevailing party because the Court of Appeals did not reverse the trial court's finding that NGDI had breached the service contract. The trial court again awarded $32,002 to MRP for attorney fees. The Court of Appeals again reversed the trial court, holding that because MRP obtained no relief from the lawsuit, it could not be considered the "prevailing party" in the ordinary meaning of the term. Imaging Systems Intl. v. Magnetic Resonance Plus, 241 Ga.App. 762, 527 S.E.2d 609 (2000).
We granted MRP's petition for certiorari to consider the correctness of the ruling by the Court of Appeals that MRP was not the "prevailing party" under the contract because it did not recover monetary damages or establish a right to non-monetary relief. MRP argues that the Court of Appeals reached the wrong result because it failed to apply the correct rules of construction, failed to consider the intent of the parties, and improperly applied case law arising from statutory as opposed to contractual provisions for attorney fees.
1. MRP contends that the Court of Appeals should have applied the three-part test enunciated in Duffett v. E & W Properties, 208 Ga.App. 484(2), 430 S.E.2d 858 (1993):
First, if no ambiguity appears, the trial court enforces the contract according to its terms irrespective of all technical or arbitrary rules of construction. [Cits.] That is, where the terms of a written contract are clear and unambiguous, the court will look to the contract alone to find the intention of the parties. [Cit.] Secondly, if ambiguity does appear, [Cit.]
The problem with MRP's reliance on Duffett is that both the trial court and the Court of Appeals appear to have applied that standard. Neither court found the phrase "prevailing party" to be ambiguous, so according to the first sentence quoted from Duffett above, there was no need for either court to apply the rules of construction intended to resolve ambiguity. The fact that the two courts did not agree on the meaning of the phrase does not mean it is ambiguous. "The construction of a contract is a question of law for the court." OCGA § 13-2-1. The trial court performed its function of deciding that question of law. The Court of Appeals is a court for the correction of errors of law (Felix v. State, 271 Ga. 534, 539, 523 S.E.2d 1 (1999)), and as such it determined that the trial court erred in its determination of the legal import of the phrase, "prevailing party."
"
Holcomb v. Word, 239 Ga. 847, 848, 238 S.E.2d 915 (1977).
2. Seeking the intent of the parties, which OCGA § 13-2-3 declares to be the "cardinal rule of construction," does not, as MRP argues, require submitting the matter to a finder of fact. "[W]here the terms of a written contract are clear and unambiguous, the court will look to the contract alone to find the intention of the parties." Duffett, supra. The contract provision in question provided that the prevailing party in litigation arising from the contract would be entitled to recover attorney fees. No language having been used in the contract to suggest that "prevailing party" was to have some special meaning in the context of this contract, the intent of the parties in using that phrase may be ascertained by considering how the courts have construed that phrase in other contracts. Heist v. Dunlap & Co., 193 Ga. 462, 464-465, 18 S.E.2d 837 (1942).
Likewise, the consideration in this case of judicial constructions of the phrase in the context of statutory provisions for attorney fees is appropriate. "`The laws which exist at the time and place of the making of a contract, enter into and form a part of it' [cits.]; and the parties must be presumed to have contracted with reference to such laws and their effect on the subject matter...." McKie v. McKie, 213 Ga. 582(2), 100 S.E.2d 580 (1957). Thus, to the extent the phrase, "prevailing party," has been construed in the course of statutory interpretation, the meanings assigned to it have become part of the body of law pertaining to awards of attorney fees. It was, therefore, appropriate for the Court of Appeals to consider such cases in reviewing the award of attorney fees to MRP.
3. Having concluded that the Court of Appeals followed the appropriate steps and applied the appropriate standards in considering the attorney fee award, what...
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