Steele et al. v. Russell et al. — Supreme Court of Georgia (Dec. 7, 1993)

Factual and Procedural Background

Appellants filed a declaratory judgment action seeking a determination whether their property was burdened with an easement benefiting appellees' property. Appellees answered and filed a counterclaim alleging that appellants had trespassed on appellees' property and, in doing so, had acted in bad faith, been stubbornly litigious, and caused appellees unnecessary trouble and expense. Appellees sought nominal damages for the trespass and "expenses of litigation" (costs and attorney fees). A jury returned a verdict that the easement continued to burden appellants' property, and, on the counterclaim, awarded appellees no nominal damages but $3,419.87 in expenses of litigation ($2,795 attorney fees; $624.87 costs). Appellants appealed the judgment entered on the jury's verdict.

Legal Issues Presented

Whether the jury's verdict, though not in ideal form, properly constituted a determination that appellants' property remained burdened with an easement benefiting appellees' property.
Whether appellees were entitled to recover "expenses of litigation" under OCGA § 13-6-11 as part of damages on their counterclaim where the jury awarded no nominal damages for the alleged trespass and the record contained no evidence of bad faith, stubborn litigiousness, or harassment by appellants.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Gibson v. Southern General Ins. Co., 199 Ga. App. 776 (406 S.E.2d 121) (1991)	Supports that expenses of litigation under OCGA § 13-6-11 are available to a defendant only where the defendant has brought a counterclaim asserting a claim for relief wholly independent of any assertion as to plaintiff's bad faith, litigiousness, and/or harassment in bringing the underlying action.	The court cited this case to show that appellees satisfied the independence requirement by bringing a trespass counterclaim, but that satisfaction of this requirement alone did not automatically entitle them to expenses because other conditions must also be met.
Lincoln Nat. Life Ins. Co. v. Davenport, 201 Ga. App. 175 (410 S.E.2d 370) (1991)	States that expenses of litigation recoverable under OCGA § 13-6-11 are ancillary and may be recovered only where other elements of damage are also recoverable.	The court relied on this principle to hold that, because the jury awarded no substantive damages for the trespass, the ancillary award of expenses could not stand.
Ken-Mar Constr. Co. v. Bowen, 245 Ga. 676 (266 S.E.2d 796) (1980)	Affirms that an award under OCGA § 13-6-11 requires evidence of bad faith, stubborn litigiousness, or actions causing unnecessary trouble and expense.	The court referenced this decision (along with Fuller v. Moister) to note that the record here lacked evidence supporting such conduct, and therefore an OCGA § 13-6-11 award could not be sustained.
Fuller v. Moister, 248 Ga. 287 (282 S.E.2d 889) (1981)	Same principle as Ken-Mar: an award under OCGA § 13-6-11 requires evidentiary support of bad faith, stubborn litigiousness, or harassment.	The court cited this case to reinforce that, absent evidence of the requisite conduct, the statutory expenses award is unsupported.

Court's Reasoning and Analysis

The court addressed two discrete matters:

Concerning the easement: The court acknowledged that the jury's verdict form lacked specificity but concluded the trial court properly construed the verdict as a determination that appellants' property continued to be burdened with an easement benefiting appellees' property. On that basis, the court affirmed the portion of the trial court's judgment relating to the easement.
Concerning the counterclaim and claimed expenses of litigation: The court analyzed the statutory framework of OCGA § 13-6-11 and the relevant case law. It explained that: (a) expenses under § 13-6-11 are generally disallowed unless specially pleaded and proven; (b) they are available to a defendant only where the defendant's counterclaim asserts an independent claim (citing Gibson); and (c) such expenses are ancillary and recoverable only where other elements of damage are also recoverable (citing Lincoln Nat. Life Ins. Co.). Although appellees did bring an independent trespass counterclaim, the jury awarded them no damages on that counterclaim. Because expenses of litigation under § 13-6-11 are ancillary and require recoverable substantive damages (and because the record also lacked evidence of bad faith, stubborn litigiousness, or harassment), the court concluded appellees were not entitled to recover their litigation expenses. The court therefore reversed the portion of the judgment awarding expenses and remanded with instructions to vacate that award.

Holding and Implications

Holding: The Supreme Court of Georgia affirmed in part, reversed in part, and remanded with instructions. Specifically, the court affirmed the trial court's judgment that appellants' property remained burdened with an easement benefiting appellees' property, and the court reversed the award of expenses of litigation to appellees under OCGA § 13-6-11 and remanded for that award to be vacated.

Implications: The immediate effect is that the easement determination in appellees' favor stands, while the trial court's award of $3,419.87 in expenses of litigation to appellees is vacated because the jury awarded no damages on the independent trespass counterclaim and the record lacked evidence of bad faith or related conduct required to support an award under OCGA § 13-6-11. The opinion does not announce or rely upon a broader new legal doctrine; it applies existing statutory and case-law principles to the facts of this case.

Judgment: "Judgment affirmed in part, reversed in part, and remanded with instructions."

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STEELE et al. v. RUSSELL et al.

FLETCHER, Justice.

Appellants filed a declaratory judgment action seeking a determination of whether their property was burdened with an easement benefiting appellees' property. Appellees answered and filed a counterclaim in which they alleged that appellants had trespassed upon appellees' property and, in so doing, had acted in bad faith, been stubbornly litigious, and caused appellees unnecessary trouble and expense. Appellees sought nominal damages for the trespass and their expenses of litigation for the character of appellants' conduct. Appellants appeal from the judgment entered on the jury's verdict in favor of appellees.

By "expenses of litigation" we are referring to the costs of the action as well as the attorney fees involved.

1. While the form of the jury's verdict should have been much more specific than it actually was, we find that it was properly construed by the trial court as a determination by the jury that appellants' property continued to be burdened with an easement benefiting appellees' property. Accordingly, we affirm the portion of the trial court's judgment which deals with the easement.

2. As to the counterclaim, the jury awarded appellees no nominal damages but $3,419.87 in expenses of litigation ($2,795 in attorney fees and $624.87 in costs). We reverse this portion of the judgment.

The expenses of litigation sought by appellees as a part of the damages alleged in their counterclaim were sought pursuant to OCGA § 13-6-11 which provides:

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 in making the contract, has been stubbornly litigious, or has caused the plaintiff unnecessary trouble and expense, the jury may allow them.

These damages are available to a defendant only where the defendant has brought a counterclaim asserting a claim for relief wholly independent of any assertion as to plaintiff's bad faith, litigiousness, and/or harassment in bringing the underlying action. Gibson v. Southern General Ins. Co., 199 Ga. App. 776 ( 406 S.E.2d 121) (1991). Here, appellees, as defendants below, did bring an independent counterclaim in which they alleged that appellants had trespassed upon appellees' property. However, the expenses of litigation recoverable pursuant to OCGA § 13-6-11 are ancillary and may only be recovered where other elements of damage are also recoverable. Lincoln Nat. Life Ins. Co. v. Davenport, 201 Ga. App. 175 ( 410 S.E.2d 370) (1991).

In this case, because the jury refused to award appellees any damages for the trespass alleged in their counterclaim, appellees were not entitled to recover any of the expenses of litigation they incurred in prosecuting the counterclaim and the trial court erred by awarding such. Accordingly, we remand the case to the trial court so that the award of expenses of litigation can be vacated.

We also note that the record is entirely devoid of evidence that, in trespassing upon appellees' property and defending themselves from such allegations, appellants acted in bad faith, were stubbornly litigious, and/or caused appellees unnecessary trouble and expense. An award pursuant to OCGA § 13-6-11 cannot be supported without such evidence. Accord Ken-Mar Constr. Co. v. Bowen, 245 Ga. 676 ( 266 S.E.2d 796) (1980); Fuller v. Moister, 248 Ga. 287 ( 282 S.E.2d 889) (1981).

Judgment affirmed in part, reversed in part, and remanded with instructions. Clarke, C. J., Hunt, P. J., Benham, Sears-Collins and Hunstein, JJ., concur.