Thompson Enterprises, Inc. v. Coskrey
| Decision Date | 08 September 1983 |
| Docket Number | No. 66159,66159 |
| Citation | 308 S.E.2d 399,168 Ga.App. 181 |
| Parties | THOMPSON ENTERPRISES, INC. v. COSKREY et al. |
| Court | Georgia Court of Appeals |
Stephen C. Steele, Hylton B. Dupree, Jr., Mark A. Johnson, Marietta, for appellant.
Frank E. Jenkins III, Charles W. Whitney, Jesse P. Schaudies, Jr., Atlanta, for appellees.
Thompson Enterprises, Inc., a residential builder, appeals from a jury award totaling $31,085 in favor of appellees, Mr. and Mrs. Coskrey, in an action in which appellees alleged negligence, fraud, and breach of contract and of warranties.
A real estate agent showed the Coskreys a number of houses, including one in the Holly Springs subdivision in Cobb County, which they decided they wanted to buy. The agent informed them that this particular house had been sold but that she would introduce them to a builder who could duplicate the house for the same price in a nearby subdivision, Johnson's Landing, which was owned by that builder. After the Coskreys had talked with a Mr. Robinson, who was introduced as a partner in Thompson Enterprises, a contract was signed and excavation was begun on the lot which Robinson and the agent had shown to the Coskreys.
Almost immediately upon commencement of the excavation, and again a number of times during the course of construction, appellees noticed water standing both in the yard and around and within the excavated area but were told by Robinson that it was due to unusually heavy rains. Meanwhile, unknown to appellees, a Cobb County building inspector ordered construction halted on the site until a soil test was obtained. Robinson arranged for a test, the net result of which was that the chief project engineer for the soil testing firm visited the site and informed Robinson that seepage from live springs underlying the entire lot would cause serious and permanent problems unless the house was located in another area of the lot and unless alternative, more expensive, construction methods were employed. Robinson discontinued the initial excavation and began again elsewhere on the lot, telling the Coskreys that the move was made so as to avoid the necessity of diverting a creek that flowed through the lot. He told them nothing of the visits from the building inspector and the soil experts, and, in disregard of the soil expert's warnings, used on the new construction the conventional construction methods with which he had begun. When the Coskreys remarked on standing water seen in and around this second site, Robinson told them that proper drainage would be established when landscaping was completed.
When the Coskreys' lease on their rented quarters expired, they moved into the substantially completed house several days prior to the closing, even though there were several obvious defects or deficiencies and other matters about which they had questions. In order to move in, the Coskreys signed an "occupancy agreement" which contained "as is" language. When they questioned Larry Thompson, the building firm's president, they were assured that this was mere stock language, that the purpose of the agreement was only to enable Thompson to fulfill the terms of his financing arrangements, and that if they would prepare a list of defective or non-complying items, all problems would be corrected promptly. At the closing the Coskreys received from Thompson a homeowner's warranty covering a number of areas; and a stipulation was added to the sales agreement guaranteeing correction for twelve months of any leakage or seepage problems. Appellees were also requested at the closing to sign an acceptance agreement which stated that no further work needed to be done on the property. After again being assured that this language was merely for the mortgage lender's benefit, and that all problems would be taken care of, the Coskreys signed.
During rainstorms that occurred shortly after the Coskreys moved into the house, there were several inches of standing water in the basement, garage, and yard. The roof began to leak, and the driveway developed a large crack. In response to the Coskreys' repeated phone calls and visits to Thompson's office, caulking was added to the windows and flashing to the roof, touch-up interior painting was done, and two loads of dirt were dumped in the driveway. Some months passed, during which Thompson failed to return the Coskreys' phone calls concerning new or continuing problems, and a Thompson repair man who had telephoned and promised to take care of remaining problem areas failed to appear. The Coskreys then sought arbitration. In his pre-hearing statement Larry Thompson denied all liability, citing the occupancy agreement and acceptance agreement. The arbitrator entered an award holding Thompson responsible for some but not all of the cited defects.
In the interval between the hearing and the award, standing water in the basement reached the heating/air-conditioning system and caused an expensive furnace component to crack. Carpet in the "great room" was also badly water-damaged. The Coskreys contacted reputable contractors who inspected the various items and estimated that the total cost of correcting defects in the roof, driveway, "great room," garage, and heating and air-conditioning system, 1 and of providing adequate drainage for the house and yard, would cost approximately $25,000. These contractors testified at trial that by the time of trial some of these costs would have increased by 10 to 15 percent.
The Coskreys rejected the award, which of course covered neither carpet nor furnace, and brought the action below, seeking actual damages of $35,000 and attorney fees of $15,000 on the breach of contract and warranty count; on the negligence count $35,000 and costs, plus $20,000 in punitive and general damages; and on the fraud count, $35,000 plus $15,000 in attorney fees. The jury awarded $19,085 in damages on the first count, $2,000 in damages and $10,000 in attorney fees on the second count, and nothing on the fraud count. After his motion for a new trial was denied, Thompson appealed, enumerating as error the trial judge's instructing the jury on litigation costs and failing to direct a verdict in appellant's favor on the negligence count. He also enumerates as error the court's overruling his motion for a new trial on the breach of warranty count, alleging that the award was excessive and without sufficient evidence to support it. Appellees have moved for damages in the amount of 10 percent of the award below, alleging that the appeal is frivolous and is simply an effort to inconvenience appellees and delay paying them what they are due.
Held:
1. Appellant contends that the trial court erred in instructing the jury regarding the award of expenses of litigation. OCGA § 13-6-11 (Code Ann. § 20-1404) disallows these expenses as a general rule but provides that "the jury may allow" them "where the plaintiff has specially pleaded and has made prayer therefor and where the defendant has acted in bad faith in making the contract, has been stubbornly litigious, or has caused the plaintiff unnecessary trouble and expense." See Bayliner Marine Corp. v. Prance, 159 Ga.App. 456, 461, 283 S.E.2d 676 (1981). If there is a bona fide controversy between the parties as to liability, the issue of costs cannot be submitted to a jury, Buffalo Cab Co. v. Williams, 126 Ga.App. 522, 524, 191 S.E.2d 317 (1972), but it is necessary for the plaintiff to show only one of the three conditions set forth in the statute in order to bring the case within the statute's ambit. Franchise Enterprises, Inc. v. Ridgeway, 157 Ga.App. 458, 278 S.E.2d 33 (1981).
In the instant case appellees "specially pleaded and ... made prayer" for litigation expenses in their complaint. The record reveals that appellees produced at trial at least some evidence that would support a finding of conduct amounting to bad faith on appellant's part, as well as of the other two statutory conditions. There is unrefuted evidence not only that appellant failed and refused to correct the major defects and deficiencies when appellees attempted to call them to his attention and even failed to respond to their repeated efforts to communicate with him by telephone and in person, but also that appellant flatly disclaimed all responsibility for such problems. Such conduct could constitute evidence to support appellees' claims that there existed no bona fide controversy as to appellant's liability, but rather that appellant was merely "stonewalling," as contemporary idiom has it--that is, that appell...
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