Marriott Corp. v. American Academy of Psychotherapists, Inc.

• Decision Date: 11 February 1981
• Docket Number: No. 60844,60844
• Citation: Marriott Corp. v. American Academy of Psychotherapists, Inc., 157 Ga.App. 497, 277 S.E.2d 785 (Ga. App. 1981)
• Court: Georgia Court of Appeals
• Parties: MARRIOTT CORPORATION v. AMERICAN ACADEMY OF PSYCHOTHERAPISTS, INC.

Page 785

277 S.E.2d 785

157 Ga.App. 497

MARRIOTT CORPORATION v. AMERICAN ACADEMY OF PSYCHOTHERAPISTS, INC.

No. 60844.

Court of Appeals of Georgia.

Feb. 11, 1981.

Elaine Whitehurst, George W. Hart, Michael G. Frick, Atlanta, for appellant.

Richard N. Hubert, Atlanta, for appellee.

McMURRAY, Presiding Judge.

In the Fall of 1973, American Academy of Psychotherapists, Inc. (the "Academy"), entered an agreement with Marriott Corporation ("Marriott") whereby it was to hold a convention at Marriott's downtown Atlanta motor hotel during the Fall of 1975. Marriott confirmed by letter that it was "definitely holding space for the 1975 convention," initially projecting 100 guest rooms and various conference rooms for workshops, meetings and meals. Marriott further indicated that it was "open to some flexibility" but requested the Academy to finalize its program at least six months prior to its "arrival date."

During the months that followed, the Academy made various arrangements for its convention and frequently communicated with Marriott regarding revisions in its original plans. In April, 1974, Marriott reconfirmed the convention reservations. In April, 1975, following another "update" by the Academy, Marriott wrote that there may be some difficulties in handling certain of the requirements for meeting rooms, but concluded, "It appears that you will fit perfectly, and that you can expect good attendance and a good show on our part." As the convention dates approached, Marriott expressed concern regarding the Academy's ability to fill the 100-room quota and informed the Academy that it would be unable to guarantee access to all requested facilities if it did not receive the 100-room reservations at least ten days prior to the opening day of the convention. The Academy met this 100-room requirement by the specified date.

Two weeks prior to the convention's opening day, the Academy's planning committee chairman, a Dr. Brown, became aware that Marriott might not have enough room for its convention. The Academy contends that following a series of telephone calls and meetings over the next three days it was learned that Marriott had booked another much larger convention at its hotel for dates that overlapped with the Academy's convention, and that Marriott consequently might be unable to handle the convention. Eventually, Dr. Brown spoke with Marriott's resident manager and was advised that if the Academy's attendees arrived on the dates they had intended, "they would just stack up in the lobby; that there were no rooms available, and they could not evict the tenants (from the other convention)." Dr. Brown took this word as "final," whereupon, the planning committee arranged to shift the convention to another Atlanta hotel.

The Academy filed suit against Marriott on two counts, Count One for wilful misrepresentation of fact and Count Two for breach of contract. In accordance with the jury's verdict, judgment was entered in plaintiff's favor in the amount of $1,500 in special damages and $5,000 in punitive damages. Defendant appeals. Held :

1. Defendant enumerates error in the trial court's denial of its motion for a directed verdict as to Count One of the complaint, wilful misrepresentation of fact. "If there is no conflict in the evidence as to any material issue and the evidence introduced, with all reasonable deductions therefrom, shall demand a particular verdict, such verdict shall be directed." Code Ann. § 81A-150(a) (Ga.L.1966, pp. 609, 656; 1967, pp. 226, 237, 246, 248). "Only where there is no conflict and a verdict is demanded as a matter of law is it error for the trial court to fail to direct a verdict." Weatherspoon v. K-Mart Enterprises of Ga., 149 Ga.App. 424, 427(3), 254 S.E.2d 418.

"The five elements of fraud and deceit in Georgia are: (1) false representation made by the defendant; (2) scienter; (3) an intention to induce the plaintiff to act or refrain from acting in reliance by the plaintiff; (4) justifiable reliance by the plaintiff; (5) damage to the plaintiff." City Dodge Inc. v. Gardner, 232 Ga. 766, 769-770, fn. 1, 208 S.E.2d 794. Having reviewed the record and transcript, we find that the jury could reasonably conclude from the evidence presented that defendant was aware of its having overbooked the hotel to such an extent as to create a substantial likelihood that it would be unable to meet plaintiff's needs during its convention, and yet defendant continued to represent to plaintiff that plaintiff's convention could and would be handled by defendant as planned by plaintiff. The jury could also find that defendant continued to make such representations with an intent to induce plaintiff's reliance, and that plaintiff did justifiably rely thereon to its damage. "Fraud may not be presumed, but, being in itself subtle, slight circumstances may be sufficient to carry conviction of its existence." Code § 37-706.

Moreover, defendant's reliance upon Brown v. Hilton Hotels Corp., 133 Ga.App. 286, 211 S.E.2d 125, certiorari dismissed as improvidently granted, Id., 234 Ga. 663, 218 S.E.2d 78, as controlling precedent that would bar plaintiff's maintenance of Count One is misplaced. The jury was properly charged in the language of Code § 105-302 regarding wilful misrepresentation of a material fact. As noted, the evidence could support a finding of defendant's liability therefor. Clearly wilful misrepresentation of a material fact as herein alleged constitutes misfeasance sufficiently extrinsic to a mere breach of the instant contract to give rise to an independent cause of action in tort. Accordingly, we find no error in the trial court's denial of defendant's motion for a directed verdict as to Count One of the complaint.

2. Defendant further contends that the trial court erred in charging the jurors so as to permit them to award plaintiff punitive damages based solely upon a finding of liability as to Count Two, breach of contract, without finding liability as to Count One, wilful misrepresentation of fact. The court began its instructions by noting that plaintiff sought "to recover damages in basically two areas. One is for the purpose of a breach of a contractual relationship between the two of them. And the second is that they contend that they have been wronged by the defendant and that they are entitled to recover exemplary or punitive damages."

The court discussed forms of evidence, burden of proof, the definition of a contract and the nature of contractual damages. The court then instructed that if the jury found that plaintiff failed to meet its burden of proof regarding breach of contract, it should return a verdict in favor of defendant, but "(i) f, on the other hand, you should find that the defendant did breach its agreement, or contract, with the plaintiff and that the plaintiff was injured, or damages (sic), as a direct result thereof, it would be your duty to return a verdict in favor of plaintiff. Then you would proceed to consider the issue of punitive or exemplary damages."

The court then charged Code § 105-302 regarding wilful misrepresentation of a material fact and discussed the nature of punitive damages. The court concluded its charge by instructing the jurors to return their verdict in general form, indicating that if they should find compensatory damages for plaintiff and also find punitive or exemplary damages for plaintiff, the verdict should separate the compensatory damages from any award of punitive damages. No instruction was given to enter separate verdicts as to each count of the complaint.

After entering deliberations, the jury returned to the court with the following question: "Yes sir, your honor, we have Count One and Count Two. We had thought we were arriving at just two figures, and now it comes down to Count One and Count Two, and we can't quite separate the two." The court responded, "Count One would relate to the instructions given you in respect to punitive damages or exemplary damages. Count Two will be related to the other damages." The court then iterated its earlier instruction regarding the general form in which the verdict was to be returned and concluded, "Does that answer your question? And that's the only significance that the counts would have." Defendant excepted to this additional charge, again for the cited reasons.

"(T)he appellate courts shall consider and review erroneous charges where there has been a substantial error in the charge which was harmful as a matter of law ..." Code Ann. § 70-207(c) (Ga.L.1965, pp. 18, 31; 1966, pp. 493, 498; 1968, pp. 1072, 1078). At best, we find the instant charge to be hopelessly confusing; at worst, a misstatement of law. "Exemplary damages can never be allowed in cases arising on contracts." Code § 20-1405. The language of the statute is unequivocal, and the instruction herein intimating law to the contrary is misleading and improper.

In Southern R. Co. v. Hardin, 107 Ga. 379, 383, 33 S.E. 436, the plaintiff sued the defendant on two counts, only one of which was proven at trial. The jury returned a general verdict for the plaintiff. On appeal, the Supreme Court held as follows: "Under the charge of the court the jury could have based their verdict on ... (the unproven count). We can not, as a matter of law, say that they did not. The verdict might have been based on one or the other of these causes, or partly on both ... As it is uncertain which cause of action the jury considered in awarding the damages, they being at liberty under the charge of the court to consider both, the verdict must be set aside and a new trial awarded." Accord, see Flint Explosive Co. v. Edwards, 86 Ga.App. 404(2), 412-414, 71 S.E.2d 747; Blanchard v. Tucker, Willingham & Co., 34 Ga.App. 405, 129 S.E. 908.

Similarly, in the present case, plaintiff sued defendant on two counts, only one of which could support an award of punitive damages. The court's charge did not so indicate however. The jury returned...