Award of Attorneys' Fees Requires Actual Damages

In the recent opinion in Benchmark Builders, Inc. v. Schultz, Case No. S10G1141 (hereinafter referred to as "The Benchmark Case"), the Georgia Supreme Court answered the question where a jury award of attorneys' fees on a counterclaim without awarding any actual damages constituted reversible error in the absence of an objection to the verdict form.   The court held such an award is void, and that a party does not have to object to the form of the verdict in order to preserve the error for appeal.



In the facts at issue in The Benchmark Case, the jury had awarded the defendants their attorneys' fees on a counterclaim against the plaintiff.   The jury, however, did not award any actual damages on the counterclaim in addition to the attorneys' fees.   The jury dispersed without the issue having been addressed, and the plaintiff then filed a motion to amend the verdict to strike the award of attorneys' fees. 

The Supreme Court reversed the decision of the Georgia Court of Appeals stating that the plaintiff had to object to the form of the verdict in order to raise the issue of the invalidity of the verdict on appeal.  The Supreme Court held that the verdict was illegal and void and no objection to the verdict form was required.

A party cannot recover attorneys' fees under Section 13-6-11 of the Official Code of Georgia Annotated without recovering actual damages on the main claim.  There is no claim for attorneys' fees under this statute without a claim for actual damages.  In order to support a claim for attorneys' fees under a count pled under Section 13-6-11, the jury must at least award $1.00 or nominal damages for at least one other claim.

In an interesting twist in The Benchmark Case, the Supreme Court addressed an issue regarding whether the underlying contract at issue in the breach of contract action contained a prevailing party fee provision.  The court remanded the issue to the Court of Appeals.  Under this argument, the defendant might have a claim for attorneys' fees as damages under the language of the contract itself and under such circumstances, the award of fees on the counterclaim might have represented an award of  actual damages and not just and award under Section 13-6-11.