Floyd Wimpy v. Jimmy B. Martin ( 2020 )

FIFTH DIVISION
REESE, P. J.,
MARKLE and COLVIN, JJ.
NOTICE: Motions for reconsideration must be
physically received in our clerk’s office within ten
days of the date of decision to be deemed timely filed.
https://www.gaappeals.us/rules
DEADLINES ARE NO LONGER TOLLED IN THIS
COURT. ALL FILINGS MUST BE SUBMITTED WITHIN
THE TIMES SET BY OUR COURT RULES.
June 29, 2020
In the Court of Appeals of Georgia
A20A0560. WIMPY v. MARTIN.
MARKLE, Judge.
Jimmy B. Martin sued Floyd Wimpy for unpaid profits he was allegedly owed
under the parties’ partnership agreements regarding two construction projects.
Following a trial, the jury found in favor of Wimpy on the breach of contract claim,
but awarded Martin damages on his claims for breach of fiduciary duty, punitive
damages, and attorney fees. Wimpy now appeals, contending that the trial court erred
in entering judgment in favor of Martin because (1) the claim for breach of fiduciary
duty was (a) unsupported by the evidence in that it could not be brought as an
independent tort separate from the breach of contract claim, and (b) barred by the
economic loss rule; (2) the claim for punitive damages was barred because there was
no predicate tort claim; and (3) the award of attorney fees was unsupported by the
evidence. For the following reasons, we affirm the judgment as to Martin’s claims for
breach of fiduciary duty and punitive damages, but reverse the award of attorney fees
for lack of sufficient evidence.
“We must affirm a jury’s verdict that has the approval of the trial court if there
is any evidence to support it because the jurors are the sole and exclusive judges of
the weight and credit given the evidence.” (Citation and punctuation omitted.)
Hensley v. Henry, 246 Ga. App. 417, 419 (1) (541 SE2d 398) (2000).
So viewed, the record shows that Wimpy, Martin, and Anne Vail entered into
a written partnership agreement to perform work on a construction project in Ellijay,
Georgia, from which they would each share equally in the losses and profits of the
project.1 By oral agreement, they extended the partnership to include an additional
construction project in Fitzgerald, Georgia. Under the agreement, Vail would handle
the bidding process and overall project management; Martin would provide the labor
and manage the actual construction work for both projects; and Wimpy would
manage the finances. Although Martin was ready and able to carry out his obligations
under the partnership agreement, Wimpy refused to allow Martin’s construction crew
1
Vail also sued Wimpy for unpaid profits, but she is not a party to this appeal.
2
to do so and instead installed his own crew on the jobs. At the completion of the
projects, Wimpy did not tender Martin’s one-third share of the gross profits.
Martin sued Wimpy for the unpaid profits from the projects, asserting, as is
relevant to this appeal, claims for breach of contract, breach of fiduciary duty,
punitive damages, and attorney fees. During the first phase of a bifurcated trial, the
jury entered a verdict in favor of Wimpy on the breach of contract claim, but in favor
of Martin on the breach of fiduciary duty claim, and awarded him $196,566.06 in
damages. The jury also found that Martin was entitled to punitive damages and
attorney fees, pursuant to OCGA § 13-6-11. In the second phase of trial, the jury
awarded Martin $90,000 in punitive damages, and $65,522.07 in attorney fees. The
trial court entered judgment conforming to the verdict. This appeal followed.
1. Wimpy argues that the trial court erred in entering judgment on Martin’s
claim for breach of fiduciary duty because there was no evidence of a breach of any
duty apart from those arising from the contracts, and the economic loss doctrine
barred recovery on this claim. We disagree.
(a) Wimpy argues that the evidence was insufficient to support the independent
tort of breach of fiduciary duty where the jury found there was no breach of contract.
This argument is without merit.
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As we have explained,
[i]t is axiomatic that a single act or course of conduct may constitute not
only a breach of contract but an independent tort as well, if in addition
to violating a contract obligation it also violates a duty owed to plaintiff
independent of contract to avoid harming him. But while a tort action
cannot be based on the breach of a contractual duty only, it can be based
on conduct which, in addition to breaching a duty imposed by contract,
also breaches a duty imposed by law.
(Citations and punctuation omitted.) Northwest Plaza, LLC (MI) v. Northeast
Enterprises, Inc., 305 Ga. App. 182, 191-192 (3) (b) (699 SE2d 410) (2010); see also
OCGA § 51-1-8 (“Private duties may arise from statute or from relations created by
contract, express or implied. The violation of a private duty, accompanied by damage,
shall give a right of action.”). And we have found claims for breach of fiduciary duty
to be well pled even when they are derived from language in a contract. See Tidikis
v. Network for Med. Communications & Research LLC, 274 Ga. App. 807, 810 (1)
(619 SE2d 481) (2005) (breach of fiduciary duty claim survives where the existence
of a confidential relationship between the contracting parties may be inferred from
the contract); cf. Spears v. Mack & Bernstein, P.C., 227 Ga. App. 743, 745 (2) (490
SE2d 463) (1997) (tort for breach of good faith and fair dealing survives where a
fiduciary duty arises from partnership language in the contract). As such, we are
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unpersuaded by Wimpy’s premise that Martin’s breach of fiduciary duty claim could
not be brought as an independent tort.2
Turning to the sufficiency of the evidence, Martin’s theory at trial was that the
parties had established a partnership, and that Wimpy breached the duties arising
from that relationship by refusing to share the profits flowing from the two projects.
To establish a tort claim for breach of fiduciary duty, a plaintiff must show
“(1) the existence of a fiduciary duty; (2) breach of that duty; and (3) damage
proximately caused by the breach.” (Citation and punctuation omitted.) Schinazi v.
Eden, 338 Ga. App. 793, 798 (3) (a) (792 SE2d 94) (2016). “Without question,
partners owe a fiduciary duty to one another.” (Citations and punctuation omitted.)
Id. Thus, to satisfy the first element of his claim, Martin was required to prove the
2
We note that Wimpy did not raise this issue before the trial court. However,
because he couched this argument as a claim for insufficiency of the evidence, we
address it nevertheless. See Redmon v. Daniel, 335 Ga. App. 159, 163 (1), n. 5 (779
SE2d 778) (2015) (“a party is free to contend on appeal that the evidence is
insufficient to support a verdict even if the party failed to move for a directed verdict,
a j.n.o.v., or new trial in the trial court.”) (citation and punctuation omitted). In any
event, even if Wimpy were to prevail on this issue, he would be entitled to a new trial,
and not to a directed verdict in his favor. Aldworth Co., Inc. v. England, 281 Ga. 197,
199 (2) (637 SE2d 198) (2006).
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existence of a partnership. See Tidikis, 274 Ga. App. at 810 (1) (“The existence of a
confidential relationship is generally a jury question.”).
A partnership can result from a contract, which may be either express or
implied. Factors that indicate the existence of a partnership include a
common enterprise, the sharing of risk, the sharing of expenses, the
sharing of profits and losses, a joint right of control over the business,
and a joint ownership of capital. But the true test to determine whether
a partnership has been created is the intention of the parties. The
language which the parties used in making the contract is to be looked
to in determining what their intention was, which when ascertained will
prevail over all other considerations.
(Citation and punctuation omitted.) Antoskow & Assocs., LLC v. Gregory, 278 Ga.
App. 468, 470 (629 SE2d 1) (2005).
Here, there was sufficient evidence for the jury to find the formation of a
partnership. The written partnership agreement regarding the Ellijay project was
admitted at trial and published to the jury. Both Martin and Vail testified to their
intent to enter into the partnership. And they testified that they would share in the
profits and costs of the projects under the partnership. Notably, Wimpy admitted that
the parties entered into a partnership initially, but stated that the relationship changed
over time. Thus, there was sufficient evidence from which the jury could determine
the formation of a partnership. Antoskow & Assocs., LLC, 278 Ga. App. at 470. To
the extent that there was a conflict in the testimony, it was “for the jury to weigh
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witness credibility and to resolve such conflicts in the evidence.” Young v. Georgia
Agricultural Exposition Auth., 318 Ga. App. 244, 249-250 (733 SE2d 529) (2012).
As to the second and third elements of the claim, it is undisputed that Martin
was not paid. And there was evidence of the gross profits from the two projects, from
which the jury could measure the damages. As such, the evidence was sufficient to
establish that Wimpy breached his fiduciary duty to Martin. Schinazi, 338 Ga. App.
at 798 (3) (a).
(b) Wimpy next contends that the breach of fiduciary duty claim is precluded
as a matter of law by the economic loss doctrine.3 However, Wimpy never raised this
argument before the trial court, and it is thus waived. See Pfeiffer v. Georgia Dept.
of Transp., 275 Ga. 827, 829 (2) (573 SE2d 389) (2002); Crippen v. Outback
Steakhouse Intl., L.P., 321 Ga. App. 167, 170 (1) (741 SE2d 280) (2013) (“Issues
presented for the first time on appeal furnish nothing for us to review, for this is a
court for correction of errors of law committed by the trial court where proper
3
The economic loss doctrine “generally provides that a contracting party who
suffers purely economic losses must seek his remedy in contract and not in tort.”
(Citations omitted.) D.J. Powers Co., Inc. v. Peachtree Playthings, Inc., 348 Ga. App.
248, 254 (1) (820 SE2d 217) (2018).
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exception is taken. One may not abandon an issue in the trial court and on appeal
raise questions or issues neither raised nor ruled on by the trial court.”) (citation
omitted). Accordingly, we do not consider this claim.
2. Wimpy argues that the trial court erred in awarding Martin punitive damages
because there was no predicate tort.4 In light of our ruling in Division 1 (a), this
argument fails. See Crosby v. Kendall, 247 Ga. App. 843, 848 (2) (b) (545 SE2d 385)
(2001) (“It is clear that a breach of a fiduciary duty may warrant the imposition of
punitive damages.”).
3. Finally, Wimpy challenges the trial court’s entry of judgment awarding
Martin’s attorney fees, contending that there was insufficient evidence to support the
amount of the award, and the fees were not based solely on the prevailing claims.
Because we agree that the evidence of the amount of attorney fees was insufficient,
we reverse the award of attorney fees in this case.
4
Wimpy also contends that there was no basis for the punitive damage award
because the jury’s underlying award of $90,000 was for one-third of the profits, and
was thus an award for contract damages. He cites to no authority for this proposition.
Moreover, in light of our ruling in Division (1) (a), Martin was entitled to damages
for breach of fiduciary duty. We cannot say that the jury’s measure of damages was
unreasonable in light of the evidence that the profits of the partnership were intended
to be split three ways. See OCGA § 51-12-4.
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(a) We will affirm an award of attorney fees under OCGA § 13-6-11 if there
is any evidence to support it. Patton v. Turnage, 260 Ga. App. 744, 747 (2) (580
SE2d 604) (2003). “But an award of attorney fees is unauthorized if appellee failed
to prove the actual costs of the attorney and the reasonableness of those costs.”
(Citation and punctuation omitted.) Hagan v. Keyes, 329 Ga. App. 178, 181 (4) (764
SE2d 423) (2014). As our Supreme Court has explained,
A court may consider a contingent fee agreement and the amount it
would have generated as evidence of usual and customary fees in
determining both the reasonableness and the amount of an award of
attorney fees. When a party seeks fees based on a contingent fee
agreement, however, the party must show that the contingency fee
percentage was a usual or customary fee for such case and that the
contingency fee was a valid indicator of the value of the professional
services rendered. In addition, the party seeking fees must also
introduce evidence of hours, rates, or some other indication of the value
of the professional services actually rendered.
(Citation and punctuation omitted; emphasis supplied.) Georgia Dept. of Corrections
v. Couch, 295 Ga. 469, 483 (3) (a) (759 SE2d 804) (2014).
During the initial phase of the trial, the jury determined that attorney fees were
warranted under OCGA § 13-6-11.5 In the second phase of the trial, Martin called as
5
OCGA § 13-6-11 provides for the recovery of attorney fees if the defendant
“has acted in bad faith, has been stubbornly litigious, or has caused the plaintiff
unnecessary trouble and expense.” Wimpy does not challenge the evidence
supporting the jury’s finding that fees were recoverable under this provision.
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a witness a seasoned attorney who was not involved in the case, and who opined that
a contingency fee based on one-third of the gross damages was reasonable in this
case. However, no written contingency agreement was proffered during the second
phase of the trial, and neither Martin nor his attorney testified to the terms of any such
arrangement. Notably, Martin’s attorney did not testify at all, and no other evidence
was introduced at trial regarding his hours, rates, or any other indicator of the value
of his services. Georgia Dept. of Corrections, 295 Ga. at 483 (3) (a); compare Brock
Built, LLC v. Blake, 316 Ga. App. 710, 715 (2) (b) (730 SE2d 180) (2012) (trial
counsel testified to the terms of the contingency agreement and submitted his bills).
As such, the evidence was insufficient to support the amount of the attorney fees
awarded to Martin, and we are constrained to reverse the award. See Hughes v. Great
Southern Midway, Inc., 265 Ga. 94, 95 (1) (454 SE2d 130) (1995); Hagan, 329 Ga.
App. at 182 (4); Prainito v. Smith, 315 Ga. App. 791, 795-96 (4) (728 SE2d 309)
(2012).
(b) Because we reverse the award of attorney fees, we do not reach Wimpy’s
remaining argument.
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In summary, we affirm the trial court’s entry of judgment with regard to
Martin’s breach of fiduciary duty and punitive damages claims, but reverse the
judgment with regard to the award of attorney fees.
Judgment affirmed in part, and reversed in part. Reese, P. J., and Colvin, J.,
concur.
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