Hagan v. Keyes

THIRD DIVISION
BARNES, P. J.,
BOGGS and BRANCH, 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.
http://www.gaappeals.us/rules/
September 29, 2014
In the Court of Appeals of Georgia
A14A1472. HAGAN v. KEYES.
BOGGS, Judge.
Jules Hagan appeals following a jury verdict in favor of Christopher Keyes on
Keyes’ complaint seeking damages for fraud, breach of contract, and unjust
enrichment. Hagan asserts that the court erred in awarding Keyes damages on the
breach of contract claim, denying his motion for a directed verdict on the fraud claim,
and awarding Keyes attorney fees. Hagan also asserts that Keyes’ unjust enrichment
claims fails as a matter of law. For the following reasons, we affirm the entry of
judgment on Keyes’ claim for damages, but reverse the award of attorney fees for
lack of sufficient evidence.
Viewed in the light most favorable to the verdict, the evidence showed that
Billy Nelson was contacted by Hagan about purchasing certain property owned by
Bruce Townsend. When Keyes expressed to Nelson, who was his friend and
neighbor, that he was “looking for some acreage to buy,” Nelson told him about
Townsend’s property. Keyes asked Nelson if Hagan had a contract on the property,
and if he would be “willing to sell the contract.” Keyes told Nelson to inform
Townsend that he would give him “a $100,000 upfront binder and that he would give
[ ] Hagan $100,000 for the sale of the contract.”
Hagan agreed to enter into the purchase agreement with Townsend and then to
assign that agreement to Keyes for $100,000. Keyes testified that Nelson persuaded
him not “to go down to the property” or talk to Townsend because “the deal would
get screwed up.” On May 14, 2007, Townsend and Hagan signed an agreement for
the purchase of 70 acres for $700,000 (71 acres minus the 1 acre for Townsend’s
home) prepared by Keyes’ attorney. Ten days later, Hagan assigned the agreement to
Keyes.
After the assignment, Keyes and Hagan went to look at the property, and Keyes
discovered from Townsend that a portion of it, the marshfront portion, had already
been sold. Keyes then researched property records and discovered that six of
Townsend’s 70 acres, a fair amount of which “was right along the marsh that would
grant [Keyes] access . . . to the river,” were sold in 1999 and 2000. Keyes informed
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Townsend that the portion of the property that had already been sold, and which he
believed he would purchase under the assigned purchase agreement, had significant
value, and that while he remained committed to the purchase, Townsend had
“significantly damaged [his] position.” When Keyes requested the return of his
money from both Hagan and Townsend, Hagan told him, “He didn’t have the money,
‘Go ahead and sue me, . . . [n]othing is in my name anyways.’” Townsend told Keyes,
“He ain’t got it, you know, gone, spent, back taxes, whatever, spent it all.”
Nelson testified that he was unaware that a portion of the 70 acres had been
sold. Hagan testified that he was aware some of Townsend’s property had been sold,
but that he believed 70 acres remained and that the purchase was for the 70 acres “at
[$]10,000 an acre.” Townsend, however, testified that the total sales price was not
based upon a certain price per acre, that he was aware at the time he signed the
purchase agreement that he “didn’t have 70 acres to sell,” and that Hagan “also knew
that.” Townsend explained that he had informed the parties that “six acres [were]
missing,” that he had known Hagan “all [his] life,” and that Hagan “knew that the
acreage was missing. And I figured that there would be - - they had been out there
doing some wetlands work . . ., so I figured we was in the process of getting
everything legally done the way it should be done.” Townsend explained further that
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he was unaware of Keyes’ agreement with Hagan to assign the purchase agreement
and did not become aware of Keyes’ involvement for “10 days to 2 weeks” after he
signed the purchase agreement with Hagan.
When Townsend refused to return the $100,000 Keyes paid in earnest money
through Hagan, Keyes sued Townsend for specific performance, or in the alternative
the return of the $100,000, and claimed that Townsend committed fraud. Townsend
filed a third-party complaint against Hagan alleging that Hagan failed to disclose to
Keyes that six acres were not included in the sale. Hagan answered and asserted a
counterclaim against Townsend seeking damages for breach of contract and fraud.
Keyes then filed a complaint against Hagan, the third-party defendant, seeking
damages for breach of contract, fraud, and unjust enrichment.
Following a trial on the claims asserted, a jury found in favor of Keyes and
against both Hagan and Townsend “jointly and severally in the amount of: $200,000,
in damages flowing from the contractual agreement . . . and, $12,000 in attorney’s
fees and the costs of litigation.” It is from this verdict that Hagan appeals.1
1. Hagan asserts that Keyes’ claim for unjust enrichment fails as a matter of
law. But the verdict form reflects that the jury did not enter a verdict against Hagan
1
Townsend is not a party to this appeal.
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on Keyes’ claim for “damages flowing from the theory of unjust enrichment.” This
claim of error is therefore without merit.
2. Hagan contends that the trial court erred in awarding damages on Keyes’
breach of contract claim. The verdict form allowed the jury to decide whether to rule
in favor of Hagan or Townsend, or to rule against them “jointly and severally” for
“damages flowing from the contractual agreement,” against Townsend individually
for “damages flowing from the contractual agreement,” or against Hagan individually
for “damages flowing from the theory of unjust enrichment.” The verdict form did not
distinguish between Keyes’ claims for breach of contract and fraud, and Hagan posed
no objection to the form. “In the absence of a verdict form requiring the jury to
specify how it found the defendants liable, the method by which a jury reaches a
particular verdict is not a matter of which this Court can take judicial cognizance.”
(Citations and punctuation omitted.) Bloodworth v. Bloodworth, 277 Ga. App. 387,
389 (1) (b) (626 SE2d 589) (2006); see also Esprit Log & Timber Frame Homes v.
Wilcox, 302 Ga. App. 550, 554-555 (3) (691 SE2d 344) (2010) (where verdict form
did not specify which of several underlying causes of action formed basis for award,
no showing of impermissible double recovery). We cannot decide whether the trial
court erred in awarding damages for breach of contract because we have no verdict
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before us showing that the jury did in fact find in favor Keyes under that theory. See
Wilcox, supra.
3. Hagan argues that the trial court erred in denying his motion for a directed
verdict on Keyes’ fraud claim. Specifically, Hagan contends that there was no
evidence of scienter or justifiable reliance. “[A] directed verdict is appropriate only
if there is no conflict in the evidence as to any material issue and the evidence
introduced, construed most favorably to the party opposing the motion, demands a
particular verdict.” (Citation, punctuation and footnote omitted.) Goody Products,
Inc. v. Dev. Auth., 320 Ga. App. 530, 534 (1) (740 SE2d 261) (2013). “The elements
of fraud are (1) false representation by defendant; (2) scienter or knowledge of the
alleged falsehood; (3) intent to induce the plaintiff to act or refrain from acting; (4)
justifiable reliance by the plaintiff; and (5) damage to the plaintiff.” (Citations and
punctuation omitted.) Nebo Ventures, LLC v. NovaPro Risk Solutions, 324 Ga. App.
836, 838-839 (1) (752 SE2d 18) (2013).
Hagan argues that there was no evidence he had scienter - knowledge of the
falsehood concerning the amount and type of property Townsend owed and could
therefore sell to Keyes via Hagan’s assignment of the purchase agreement. But to the
contrary, there was some evidence Hagan was aware, prior to assigning the agreement
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to Keyes, that Townsend had sold six acres and that some of that acreage was
marshfront property.
Hagan also argues that Keyes cannot show justifiable reliance because he failed
to perform any due diligence prior to purchasing the assignment to discover the
number of acres Townsend owned and was therefore able to sell. “We have frequently
cautioned that questions of fraud, the truth and materiality of representations made
by a seller, and whether the buyer could have protected himself by the exercise of
proper diligence are, except in plain and indisputable cases, questions for the jury.”
(Citations and punctuation omitted.) Stephen A. Wheat Trust v. Sparks, 325 Ga. App.
673, 676-677 (2) (754 SE2d 640) (2014). This principle would apply here to the
agreement between Hagan and Keyes to assign the purchase agreement to Keyes in
exchange for $100,000. Keyes testified that prior to the assignment, he had desired
to visit the property and talk to Townsend, but that Nelson warned him such actions
could affect the purchase deal between Hagan and Townsend. The fact that Keyes
checked property records and discovered the problem after the assignment and before
closing on the purchase does not mean that such inquiry was required as a matter of
law prior to the assignment. It was for the jury to decide whether Keyes justifiably
relied upon the purchase agreement Hagan assigned to him or whether he should have
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made some further independent inquiry. See Nebo Ventures, supra, 324 Ga. App. at
842 (1) (d); see also Akins v. Couch, 271 Ga. 276, 279 (2) (b) (518 SE2d 674) (1999)
(“[T]he location of information in public records does not necessarily defeat a claim
of passive concealment.”); Cates v. Owens, 87 Ga. App. 270, 275-276 (1) (73 SE2d
345) (1952) (previous knowledge of land and its boundaries did not preclude
recovery for fraudulent misrepresentation).
Because there was some evidence to support a verdict against Hagan for fraud,
we cannot say that the trial court erred in denying his motion for directed verdict.
Goody Products, supra, 320 Ga. App. at 533-534 (1).
4. Hagan contends that the trial court erred in awarding attorney fees to Keyes
because no evidence was presented as to the reasonableness of the fees or the amount
of fees that were attributable to his prevailing claim. “The expenses of litigation
generally shall not be allowed as a part of the damages; but where the plaintiff has
specially pleaded and has made prayer therefor and where the defendant has acted in
bad faith, has been stubbornly litigious, or has caused the plaintiff unnecessary
trouble and expense, the jury may allow them.” OCGA § 13-6-11. But “[a]n award
of attorney fees is unauthorized if appellee failed to prove the actual costs of the
attorney and the reasonableness of those costs.” (Citations, punctuation and footnote
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omitted.) Cannon Air Transp. Svcs. v. Stevens Aviation, 249 Ga. App. 514, 519 (6)
(548 SE2d 495) (2001).
Keyes requested attorney fees in his complaint against Hagan, and presented
evidence that he owed his attorney $12,000 in fees. But no evidence was presented
regarding the reasonableness of those fees.2 In the absence of some documentation
or testimony “to show what constituted a reasonable attorney fee in light of the
litigation history of the case,” the evidence is insufficient to support the jury’s verdict.
Smith v. Travis Pruitt and Assoc., 265 Ga. 347, 348 (2) (455 SE2d 586) (1995). The
award of attorney fees must therefore be reversed. Prainito v. Smith, 315 Ga. App.
791, 795-796 (4) (728 SE2d 309) (2012).
Judgment affirmed in part and reversed in part. Barnes, P. J., and Branch, J.,
concur.
2
We also note that the jury was not charged on the issue of attorney fees.
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