Following a bench trial in this action involving a business dispute, defendants Internal Medicine Alliance, LLC “IMA”, Izabella Verbitsky, M. D., and Alex Goldstein appeal from the final order and judgment entered in favor of plaintiff J. William Budell, M. D. Appellants contend that the superior court erred by vacating a consent order incorporating a settlement agreement purportedly reached by the parties; by declining to take account of a lease obligation as an accrued liability in valuing Budell’s ownership interest in IMA; and by holding that Verbitsky alone should be held legally responsible for the lease obligation. Appellants further contend that there was insufficient evidence to support Budell’s claims for breach of fiduciary duty, conversion, punitive damages, and attorney fees under OCGA § 13-6-11. We reverse the superior court’s judgment entered in favor of Budell’s claims for conversion and punitive damages and remand for a new trial on those counts. Additionally, we vacate the attorney fees award and remand for the fees to be limited to those incurred by Budell in prosecuting his successful claims. We affirm in all other respects. “On appeal from the entry of judgment in a bench trial, the evidence must be viewed in the light most favorable to the trial court’s findings of fact.” Realty Lenders v. Levine , 286 Ga. App. 326, 326-327 649 SE2d 333 2007. So viewed, the record reflects that Verbitsky and Budell are physicians who practice internal medicine. In early 2005, they organized IMA as a limited liability company “LLC” for the purpose of operating a medical practice together. The Articles of Organization filed with the Secretary of State of Georgia stated that IMA was to be a manager-managed LLC. Notably, Verbitsky and Budell never entered into a written operating agreement for IMA. They agreed, however, that they would each hold a 50 percent ownership interest in IMA, would share equally in the profits and losses, and would jointly manage IMA. While they were both practicing at IMA, neither Verbitsky nor Budell received any salary, compensation, draw, distribution, or any other money in return for participating in the practice.
Verbitsky and Budell made capital contributions to IMA in the amount of $70,000.00 and $70,199.21, respectfully. The capital contributions were pooled together and used for start up expenses, including the purchase of computer hardware and software, phone equipment, furniture, and office space construction. As part of the start up of the practice, IMA entered into a seven year lease for office space in the LaVista Office Park in DeKalb County. Under the lease agreement, Verbitsky and Budell both agreed to serve as guarantors of $70,000 in costs associated with the construction of the office space.
