BOWEN, Chief Judge.
Three matters are presently before the Court in the above-captioned case: (1) Defendant's Motion for Summary Judgment, (2) Plaintiffs' "Notice of Objection or in the Alternative Motion to Strike" (Motion to Strike), and (3) Plaintiffs' Motion for Partial Summary Judgment. The Court heard oral argument on these matters on December 12, 1997. After careful consideration of the parties' arguments and the relevant statutory and case law, Plaintiffs' motions are
This case arises out of an inventory financing arrangement between Plaintiff LMC Motors, Inc. (LMC), which operated a General Motors (GM) dealership in Eastman, Georgia, and Defendant General Motors Acceptance Corporation (GMAC), a wholly owned subsidiary of GM. Plaintiff L. Mitchell Coffee, Jr. (Coffee) is the president and sole shareholder of LMC. Coffee first became involved in the automobile business during the late 1980s, when he acquired 49% of the stock in Hilliard, Inc., which at the time operated the GM dealership in Eastman. Coffee made this investment at the request of his friend Zack Hilliard, the dealership's owner. Coffee purchased the remaining stock from Mr. Hilliard in August 1989, and in December of that year GM approved Coffee as a dealer. Coffee operated the dealership under its former name until December 1990, when he changed the corporation's name to LMC Motors, Inc.
Hilliard, Inc. had previously entered into an inventory financing arrangement with GMAC — sometimes referred to as a "floor plan" financing arrangement — which the parties continued following Coffee's acquisition of the dealership. In this type of arrangement, the lender (GMAC) provides a line of credit to the dealership (Hilliard/LMC), which the dealership uses to finance the purchase of vehicles from the manufacturer (GM). On December 27, 1990, Coffee executed several agreements on behalf of LMC in connection with this inventory financing arrangement: (1) a Promissory Note, (2) a Loan Agreement, (3) a Wholesale Security Agreement, (4) an Amendment to the Wholesale Security Agreement, (5) a Guaranty
Plaintiffs detail several instances in which they allege that GMAC restricted and adjusted LMC's credit limit.
On April 5, 1994, GMAC advised LMC that it intended to terminate their inventory financing arrangement and that it would make a formal demand for payment in ninety days.
It is undisputed and notable that LMC timely paid all amounts owed to GMAC under the terms of the agreement. It also is undisputed that LMC incurred substantial operating losses during its existence.
Plaintiffs commenced the instant lawsuit in March 1996, asserting no less than eight claims against GMAC: (1) violation of the Automobile Dealers' Day in Court Act, 15 U.S.C. § 1221 et seq.; (2) violation of the Georgia Motor Vehicle Franchise Practices Act, O.C.G.A. § 10-1-620 et seq.; (3) breach of contract; (4) promissory estoppel; (5) fraud; (6) negligent misrepresentation; (7) tortious interference with business relations; and (8) tortious interference with contractual relations. Plaintiffs pray for compensatory and punitive
II. SUMMARY JUDGMENT STANDARD
The Court should grant summary judgment only if "there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). Applicable substantive law determines which facts are material, that is, which facts have the potential to affect the outcome of the trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The Court must "resolve all reasonable doubts about the facts in favor of the non-movant, and draw all justifiable inferences in his [or her] favor." United States v. Four Parcels of Real Property, 941 F.2d 1428, 1437 (11th Cir.1991) (en banc) (internal quotation marks and citations omitted).
The moving party has the initial burden of showing the Court, by reference to materials on file, the basis for its motion. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). However, the nature of the movant's initial burden "varies depending on whether the legal issues, as to which the facts in question pertain, are ones on which the movant or the non-movant would bear the burden of proof at trial."
If — and only if — the movant carries this initial burden, the non-movant may avoid summary judgment only by "demonstrat[ing] that there is indeed a material issue of fact that precludes summary judgment." Id. at 608.
The clerk has given each party notice of the opposing party's summary judgment motion, of the right to file affidavits or other materials in opposition, and of the consequences of default. Therefore, the notice requirements of Griffith v. Wainwright, 772 F.2d 822 (11th Cir.1985), are satisfied. The time for filing materials in opposition has expired, and the motions are ripe for consideration.
As previously observed, both parties have moved for summary judgment on the Plaintiffs' breach of contract claim. The terms of the inventory financing arrangement are at the heart of this case. Accordingly, I first will address the parties contentions with respect to Plaintiffs' contract claim, and I then will proceed to consider Plaintiffs' other claims against GMAC.
Breach of Contract
It is undisputed that Plaintiffs' breach of contract claim is governed by Georgia law. Moreover, it is undisputed that the parties had a valid and enforceable agreement which governed their inventory financing arrangement. However, the parties disagree strongly about their respective rights and duties under that agreement.
In Georgia, as elsewhere, the construction of a contract ordinarily is a question of law to be decided by the Court. See O.C.G.A. § 13-2-1; Salvatori Corp. v. Rubin, 159 Ga.App. 369, 371, 283 S.E.2d 326 (1981). "The cardinal rule of construction is to ascertain the intention of the parties." O.C.G.A. § 13-2-3; McCann v. Glynn Lumber Co., 199 Ga. 669, 674, 34 S.E.2d 839 (1945). Where the terms of a written contract are clear and unambiguous, the Court should determine the parties' intention based solely upon the contract itself. Health Serv.
With these principles in mind, I now turn to consider the contract at issue. The inventory financing arrangement was principally governed by three written documents: the Promissory Note, the Loan Agreement, and the Wholesale Security Agreement.
(emphasis supplied). Finally, the Wholesale Security Agreement provides that "[LMC] agree[s] upon demand to pay to GMAC the amount it advances or is obligated to advance to the manufacturer or distributor for each vehicle with interest at the rate per annum designated by GMAC from time to time and then in force under the GMAC Wholesale Plan." In addition, LMC granted GMAC a security interest in its inventory of new and used vehicles, and it further agreed to permit GMAC to take possession of the vehicles in the event of LMC's bankruptcy or default under the security agreement, or in the event that GMAC deemed itself insecure.
Plaintiffs contend that GMAC was obligated under this contract to finance up to $1.5 million worth of vehicles, and that GMAC could refuse to advance funds or terminate the line of credit only upon the occurrence of one of the events enumerated in paragraph 3 of the Loan Agreement. Therefore, Plaintiffs claim, GMAC breached the contract in four distinct ways: (1) by refusing to advance funds to the full extent of LMC's line of credit; (2) by adjusting LMC's line of credit based upon criteria not contained in the contract; (3) by imposing additional terms and conditions upon LMC and Coffee which were not contained in or authorized by their agreement; and (4) by terminating the line of credit in the absence of any event of default.
GMAC, on the other hand, contends that it was not unconditionally obligated to advance $1.5 million on behalf of LMC. Indeed, GMAC argues that it is entitled to summary judgment on Plaintiffs' breach of contract claim because nothing in the relevant documents required it to advance the full amount of LMC's line of credit. Contrary to GMAC's argument, however, the Loan Agreement expressly states that GMAC "will advance funds in payment of property so acquired or held in an amount not to exceed the aggregate amount of the line of credit." (Loan Agreement ¶ 3) (emphasis supplied). It is true, as GMAC argues, that it was only required to advance funds in payment of vehicles that LMC purchased from GM. However, nothing in the contract documents gave GMAC authority to adjust the number of vehicles that LMC could purchase, nor was the decision to advance funds placed in GMAC's discretion.
GMAC also argues, however, that it was not obligated to advance the full amount of funds under the line of credit because the arrangement was denominated as a "line of credit." GMAC contends that when a lender extends a line of credit, it does not assume an unqualified obligation to loan the borrower the full amount of funds; rather, the lender may adjust or cancel the line of credit in its sole discretion. This argument is not entirely without authority; in Midlantic Nat'l Bank v. Commonwealth Gen., Ltd., 386 So.2d 31, 33 (Fla.Dist.Ct.App.1980), the court defined a line of credit as follows:
(internal citations and footnote omitted).
GMAC has not directed the Court to any other cases adopting its definition of a line of credit, and the Court has been unable to locate any in its own research.
Modoc Meat & Cattle Co. v. First State Bank of Or., 271 Or. 276, 532 P.2d 21, 25 (1975) (emphasis supplied); see also Black's Law Dictionary 928 (6th ed.1990) (citing Modoc Meat & Cattle Co.). Under this view, Plaintiffs argue, a lender is obligated to advance funds up to the borrower's credit limit, and it may not reduce that limit unless the agreement authorizes it to do so.
The Georgia courts apparently have not addressed the issue of a lender's duty to advance funds under a line of credit, although they have recognized that a lender's failure to advance funds pursuant to a written loan agreement will support a claim for breach of contract. See Albany Fed. Sav. & Loan Ass'n v. Henderson, 198 Ga. 116, 139-41, 31 S.E.2d 20 (1944). A recent case by the Georgia Court of Appeals, however, seems to support the Plaintiffs' position. In Studdard v. George D. Warthen Bank, 207 Ga.App. 80, 80, 427 S.E.2d 58 (1993), the court held that Georgia's statute of frauds barred recovery on an oral promise to extend a line of credit:
(emphasis removed). Thus, it would seem that where, as here, an agreement to extend a line of credit is evidenced by a writing
Moreover, I do not believe that the Georgia courts would adopt the Midlantic Nat'l Bank definition of a line of credit, at least insofar as that case may be read to hold that merely designating an arrangement as a line of credit makes the lender's obligation discretionary as a matter of law.
Under the express terms of the written agreement in this case, GMAC extended a line of credit to LMC in the amount of $1.5 million. GMAC did not have authority under the agreement to adjust the line of credit based upon the number of vehicles financed or upon any other criteria. There is nothing ambiguous about this aspect of the agreement. If GMAC had wished to retain discretion over the lending decision it easily could have inserted language to that effect in the form contract.
GMAC's modification argument, which I must observe is not clearly articulated in its various briefs, is apparently as follows: GMAC had the authority to terminate the
Under Georgia law, a written agreement may be modified by a subsequent parol agreement between the parties, provided the modification is supported by consideration. Ryder Truck Lines, Inc. v. Scott, 129 Ga.App. 871, 873, 201 S.E.2d 672 (1973). The parties must mutually consent to the modification, "which need not be expressed in words, in writing or signed, but the parties must manifest their intent to modify the original contract." Id. at 873-74, 201 S.E.2d 672; see also Dan Gurney Indus., Inc. v. Southeastern Wheels, Inc., 168 Ga.App. 504, 505, 308 S.E.2d 637 (1983). Whether a modification has occurred is generally a factual question to be determined by the jury. See Norair Eng'g Corp. v. Porter Trucking Co., 163 Ga.App. 780, 784, 295 S.E.2d 155 (1982).
In this case, the issue of whether there could have been a valid modification depends at the outset on whether GMAC had the power to terminate the agreement; for unless GMAC was within its rights to terminate the agreement, its forbearance from doing so would not be sufficient consideration to support the alleged modification. See Owings v. Georgia R.R. Bank & Trust Co., 188 Ga.App. 265, 266, 372 S.E.2d 825 (1988) ("An agreement on the part of one to do what he is already legally bound to do is not a sufficient consideration for the promise of another.") (citations omitted). There are two ways in which GMAC conceivably could have had the authority to terminate the agreement: (1) the agreement was terminable at will, or (2) one of the events specified in paragraph 3 of the Loan Agreement occurred, thereby triggering GMAC's termination rights.
Under Georgia law, an agreement without a fixed term of duration is terminable at the will of either contracting party. Atakpa v. Perimeter OB-GYN Assocs., 912 F.Supp. 1566, 1579 (N.D.Ga.1994); see also Voyles v. Sasser, 221 Ga.App. 305, 305, 472 S.E.2d 80 (1996). Because none of the relevant documents contained an expiration date, GMAC contends that the agreement was terminable at will. Furthermore, GMAC notes, the Promissory Note and the Wholesale Security Agreement both stated that LMC was to repay GMAC upon demand. Because in Georgia a demand instrument may be called "at anytime with or without reason," Fulton Nat'l Bank v. Willis Denney Ford, Inc., 154 Ga.App. 846, 849, 269 S.E.2d 916 (1980), GMAC argues that it could demand payment at any time.
Plaintiffs concede that the contract documents contained no expiration date; nevertheless, they contend that the enumeration of events of default in paragraph 3 of the Loan Agreement limited GMAC's right to terminate the agreement. Plaintiffs point to two cases in which courts faced with similar contractual arrangements held that the lender did not have the right to terminate the agreement and demand payment in the absence of the occurrence of one or more of the enumerated contingencies. Plaintiffs first cite Reid v. Key Bank, 821 F.2d 9, 14 (1st Cir.1987), in which the court reasoned as follows:
Similarly, the Fifth Circuit held in Bank One, Tex., N.A. v. Taylor, 970 F.2d 16, 31 (5th Cir.1992):
The Bank One court found the Reid decision persuasive, noting that "[i]f a demand obligation was indeed intended, ... the conditions for acceleration ... would be meaningless." Id.
Plaintiffs argue that the agreement in this case, like the agreements at issue in Reid and Bank One, limited GMAC's right to terminate the agreement and demand payment at any time. I find this argument compelling under the undisputed facts of this case. Georgia law requires that a contract should, if possible, be interpreted in a way that gives effect to all of its provisions, see O.C.G.A. § 13-2-2(4); McCann, 199 Ga. at 674, 34 S.E.2d 839, and a court should avoid a construction that renders any portion of the contract meaningless. Board of Regents v. A.B. & E., Inc., 182 Ga.App. 671, 675, 357 S.E.2d 100 (1987). Paragraph 3 of the Loan Agreement expressly states that GMAC "may, at its option, terminate the line of credit and refuse to advance funds hereunder upon the occurrence of any of the following" events. If the parties' agreement is construed to be terminable at will, the enumeration of these contingencies would be rendered meaningless.
Furthermore, interpreting this provision as circumscribing GMAC's termination rights is not necessarily inconsistent with the demand provisions of the agreement. The Wholesale Security Agreement specifies in pertinent part that "[LMC] agree[s] upon demand to pay to GMAC the amount it advances or is obligated to advance ... for each vehicle with interest at the rate per annum designated by GMAC." Thus, while GMAC was entitled to demand payment of the advances it had made pursuant to the line of credit at any time, it could not terminate the line of credit in the absence of one of the specific events of default enumerated in paragraph 3 of the Loan Agreement.
GMAC cites two cases for the proposition that merely enumerating events of default does not limit a contracting party's rights to terminate a terminable-at-will contract. First, GMAC refers to Mirax Chemical Prods. Corp. v. First Interstate Commercial Corp., 950 F.2d 566, 569 (8th Cir.1991), in which the court stated:
(footnote omitted). In the case sub judice, however, the enumerated contingencies do not trigger extra-judicial remedies; rather, they simply permit GMAC to "terminate the line of credit and refuse to advance funds." (Loan Agreement ¶ 3). Moreover, the Wholesale Security Agreement specifies events of default which permit GMAC to take immediate possession of LMC's vehicles without legal process. The inclusion of these provisions in the Wholesale Security Agreement bolsters the conclusion that the reasoning of Mirax Chemical is inapplicable to the facts of this case.
Id. (footnote omitted). Here, there is no provision expressly stating that the agreement will continue indefinitely, and, more importantly, the events of default enumerated in the Loan Agreement are more concrete and determinable than the contingencies described in Trient Partners. Thus, Trient Partners is distinguishable from the present case.
I note that the Georgia courts have apparently not addressed the issue of whether one party's ability to terminate a contract of indefinite duration is circumscribed by the enumeration of events of default. The parties have not referred the Court to any Georgia cases,
Plaintiffs assert that it is undisputed that none of these events occurred. GMAC, however, claims that one of the enumerated contingencies did in fact occur and that therefore there is a genuine issue of material fact which precludes summary judgment. Specifically, GMAC contends that Coffee failed to comply with a separate agreement that the dealership's capitalization would be maintained in accordance with GMAC's guidelines. Paragraph 3 of the Loan Agreement does state that GMAC may terminate the line of credit upon "a default by [LMC] in the payment or performance of any obligation hereunder or under any other agreement entered into with [GMAC]." (emphasis supplied). GMAC asserts that LMC was inadequately capitalized from the outset, and thus it contends that it was within its rights to terminate the agreement and refuse to advance funds.
First, I note that GMAC bears the burden of proving that one of these contingencies occurred. See 3A Arthur L. Corbin, Corbin on Contracts § 749 (1960). In support of its contention, GMAC refers to various internal documents which purportedly show the existence of that separate agreement. Although these documents are not persuasive by themselves, they nevertheless demonstrate the potential of an inference that Coffee agreed to keep LMC capitalized in accordance with GMAC's requirements.
In summary, GMAC was obligated under the terms of the written agreement to advance up to $1.5 million on LMC's behalf for
Automobile Dealers' Day in Court Act
The Automobile Dealers' Day in Court Act (ADDCA), 15 U.S.C. §§ 1221-25, "is a remedial statute enacted to redress the economic imbalance and unequal bargaining power between large automobile manufacturers and local dealerships, protecting dealers from unfair termination and other retaliatory and coercive practices." Maschio v. Prestige Motors, 37 F.3d 908, 910 (3rd Cir.1994). The statute permits an "automobile dealer" to bring suit against an "automobile manufacturer"
GMAC first argues that Coffee lacks standing to sue in his individual capacity under the ADDCA because he is not an "automobile dealer" within the meaning of the Act. See 15 U.S.C. § 1221(c) (defining "automobile dealer" for purposes of ADDCA); Sherman v. British Leyland Motors, Ltd., 601 F.2d 429, 439 (9th Cir.1979) (holding that president and sole shareholder of dealership lacked standing under ADDCA). Plaintiffs, on the other hand, argue that Coffee has standing to assert an ADDCA claim because he was "inextricably woven" into the franchise agreement between GM and LMC. See York Chrysler-Plymouth, Inc. v. Chrysler Credit Corp., 447 F.2d 786, 790 (5th Cir. 1971) (holding that shareholders "were so inextricably woven into" franchise agreement that they could assert ADDCA claim).
I find that the facts of the present case are more analogous to York Chrysler-Plymouth than to Pearson. Indeed, it is readily apparent from the various agreements between LMC and GM that Coffee was considered essential to the dealership's operations. (See Coffee Supp. Aff., Ex. A). Moreover, Coffee had personally guaranteed LMC's indebtedness to GMAC, and thus his personal wealth was substantially intertwined with the dealership's financial affairs. Therefore, I conclude that Coffee has standing to assert a claim under the ADDCA.
Second, GMAC argues that it is entitled to summary judgment on Plaintiffs' ADDCA claim because Plaintiffs cannot show that GMAC failed to act in good faith.
15 U.S.C. § 1221(e). "Bad faith under [the ADDCA] has been defined narrowly and construed strictly. It does not mean simply a lack of fairness but entails a showing of coercion." Carroll Kenworth Truck Sales, Inc. v. Kenworth Truck Co., 781 F.2d 1520, 1525 (11th Cir.1986) (citations omitted). However, if the defendant had an objectively valid reason for its actions, the plaintiff cannot prevail absent evidence of an ulterior motive. Stamps v. Ford Motor Co., 650 F.Supp. 390, 397 (N.D.Ga.1986) (citing Carroll Kenworth Truck Sales, 781 F.2d at 1527 & n. 4).
GMAC contends that because it has put forward evidence tending to show that it acted out of concern over LMC's financial difficulties, it has shown that it had objectively valid reasons for its conduct. Thus, GMAC argues, Plaintiffs were required to present evidence of an ulterior motive to avoid summary judgment. Because Plaintiffs have not come forward with any such evidence,
Plaintiffs, on the other hand, vigorously contend that they are required to show evidence of an ulterior motive only if GMAC's conduct was contractually authorized. That is, Plaintiffs argue that GMAC's conduct was "objectively valid" within the meaning of Stamps only if it was authorized by the contract. Plaintiffs cite three cases for this proposition: Carroll Kenworth Truck Sales, 781 F.2d at 1527; Victory Motors v. Chrysler Motors Corp., 357 F.2d 429, 432 (5th Cir.1966); and Stamps, 650 F.Supp. at 397. It is true, as Plaintiffs note, that the manufacturer's conduct in these cases was contractually authorized; however, nothing in the courts' opinions limits the universe of "objectively valid" reasons to those authorized by the parties' agreement. Although the terms of the contract are certainly relevant to the issue of GMAC's good faith or lack thereof, contractual authorization is not the sine qua non of good faith under the ADDCA. See In re American Honda Motor Co. Dealerships Relations Litig., 941 F.Supp. 528, 566 (D.Md.1996) ("[Good faith under the ADDCA] does not mean simple unfairness or breach of a franchise agreement, but rather actual or threatened coercion or intimidation imposed upon the dealer by the manufacturer.") (internal quotation marks and citation omitted); see also 62B Am.Jur.2d Private Franchise Contracts §§ 579-87 (1990).
Nevertheless, Plaintiffs were not required to submit evidence of an ulterior motive simply because GMAC pointed to evidence of a purportedly objective justification for its conduct. "[W]hether a manufacturer has acted with sufficient justification to constitute good faith in bringing pressure to bear on a dealer is a factual question which will depend on the circumstances arising in each particular case." H.C. Blackwell Co. v. Kenworth Truck Co., 620 F.2d 104, 107 (5th Cir.1980) (quoting Rea v. Ford Motor Co., 497 F.2d 577, 585 (3rd Cir.1974)). It is only if the manufacturer's conduct is justified as a matter of law that the dealer must present evidence of an ulterior motive to show that the manufacturer acted in bad faith. See Stamps, 650 F.Supp. at 397 ("[T]his case strongly resembles cases in which objectively valid criteria justified a manufacturer's actions as a matter of law.") (citing Carroll Kenworth Truck Sales, 781 F.2d at 1528, and
Here, there is evidence in the Record that GMAC had legitimate concerns about LMC's performance and that GMAC treated LMC like other financially troubled dealerships. There is some evidence, however, that GMAC acted in a coercive and intimidating manner in its dealings with the Plaintiffs. Also, it is notably undisputed that Plaintiffs timely met all financial obligations under their agreements with GMAC. At this stage in the litigation, it remains a jury question whether GMAC acted with the requisite bad faith. Accordingly, GMAC's Motion for Summary Judgment is denied on Plaintiffs' ADDCA claim.
Georgia Motor Vehicle Franchise Practices Act
The Georgia Motor Vehicle Franchise Practices Act (MVFPA), O.C.G.A. §§ 10-1-620 to -668, and in particular the Georgia Motor Vehicle Dealer's Day in Court Act (GDDCA), O.C.G.A. §§ 10-1-630 to -631, is the state-law counterpart to the ADDCA. "[A]ny person who is or may be injured by a violation of a provision of" the MVFPA may bring an action for damages, which may include punitive damages in some circumstances. O.C.G.A. § 10-1-623(a), (b). In general terms, O.C.G.A. § 10-1-631 makes it unlawful for a "franchisor" to fail to act in good faith in its relationship with a motor vehicle dealer. A "franchisor" is defined as follows:
O.C.G.A. § 10-1-622(7).
The Georgia Court of Appeals recently emphasized that liability under the GDDCA extends only to a "franchisor" as defined in O.C.G.A. § 10-1-622(7). Nissan Motor Acceptance Corp. v. Stovall Nissan, Inc., 224 Ga.App. 295, 300, 480 S.E.2d 322 (1997). The court concluded that the defendant, a wholly owned financing subsidiary of Nissan Motor Corporation, was not a franchisor because it had never sold vehicles to the plaintiff, nor had it ever licensed the plaintiff to sell vehicles. Id. Thus, the court held that the defendant could not be liable under the GDDCA. Id.
GMAC points out that, like the defendant in Stovall Nissan, it neither sold vehicles to LMC nor licensed LMC to sell those vehicles. Thus, GMAC argues, it is not a "franchisor" under O.C.G.A. § 10-1-622(7) and therefore it cannot be held liable under the GDDCA. Plaintiffs attempt to avoid the persuasive force of this argument by pointing to two statutory provisions which they contend create a conflict which must be resolved through statutory construction. First, Plaintiffs note that O.C.G.A. § 10-1-624(a) provides that
(emphasis supplied). Second, Plaintiffs point out that O.C.G.A. § 10-1-624(d) prohibits a franchisor from using a subsidiary corporation "to accomplish what would otherwise be illegal conduct under this article."
Plaintiffs assert that these provisions would be rendered meaningless if they are not interpreted as subjecting GMAC to liability under the GDDCA. However, there is no conflict between these provisions and the GDDCA's limitation of liability to "franchisors" as defined by the statute, nor does the limitation of liability to franchisors conflict with the overall remedial purpose of the MVFPA. To the contrary, § 10-1-624(d) bolsters GMAC's contention that liability should be limited to franchisors, as the statute clearly contemplates the use of
Finally, Plaintiffs argue that the Stovall Nissan case is distinguishable because the dealer in that case did not raise the arguments raised by the Plaintiffs herein. Even assuming that this distinction could make a difference when the court's opinion is otherwise on point, I have already determined that Plaintiffs' arguments are without merit, and therefore they provide no basis for distinguishing Stovall Nissan. I conclude that Plaintiffs cannot recover against GMAC on this claim as a matter of law, and accordingly GMAC's Motion for Summary Judgment is granted on this claim.
Fraud and Negligent Misrepresentation
The tort of fraud has five elements under Georgia law: (1) a false representation by the defendant; (2) scienter; (3) an intention to induce the plaintiff either to act or to refrain from acting; (4) justifiable reliance by the plaintiff; and (5) damage to the plaintiff. Cobb County Sch. Dist. v. MAT Factory, Inc., 215 Ga.App. 697, 700-01, 452 S.E.2d 140 (1994). The tort of negligent misrepresentation has similar elements: "(1) the defendant's negligent supply of false information to foreseeable persons, known or unknown; (2) such persons' reasonable reliance upon that false information; and (3) economic injury proximately resulting from such reliance." Hardaway Co. v. Parsons, Brinckerhoff, Quade & Douglas, Inc., 267 Ga. 424, 426, 479 S.E.2d 727 (1997). GMAC contends that it is entitled to summary judgment on these claims because Plaintiffs cannot identify any representations that GMAC failed to honor; that is, GMAC claims that Plaintiffs cannot show that any false representations were made. Specifically, GMAC asserts that the only representation identified by the Plaintiffs is GMAC's 1990 statement that LMC's credit line would be increased if Coffee were to contribute an additional $100,000.00 to LMC's capital. Because LMC's credit limit was increased (albeit only temporarily) following Coffee's contribution, GMAC argues that summary judgment should be granted in its favor.
Plaintiffs, on the other hand, assert that at the time the parties entered into the inventory financing arrangement, GMAC represented that it would advance funds up to the maximum amount available under the line of credit and that GMAC did not intend to honor those representations. Plaintiffs' evidence in support of this assertion is slight; indeed, I have some doubt whether Plaintiffs have identified the alleged misrepresentations with sufficient particularity as to state a claim for relief. Nevertheless, given the circumstances of this case and the relatively undeveloped state of the Record at this point in the proceedings, I cannot conclude that GMAC is entitled to judgment as a matter of law on these claims.
Moreover, GMAC does not seem to challenge this aspect of Plaintiffs' allegations; rather, GMAC argues that the Plaintiffs cannot rely on these alleged misrepresentations to avoid summary judgment because their Complaint focused upon representations that GMAC allegedly made after the parties entered into the inventory financing arrangement. That is, GMAC contends that Plaintiffs are impermissibly changing their legal theory on these claims to avoid summary judgment. See Seale v. Miller, 698 F.Supp. 883, 903-04 (N.D.Ga.1988) (holding that plaintiffs could not avoid summary judgment on fraud claim by raising new allegations of fraudulent conduct). However, a fair reading of the Complaint reveals that Plaintiffs are asserting claims based upon alleged misrepresentations made "throughout the course of LMC's relationship with GMAC." (Compl.¶¶ 74, 79). Thus, Plaintiffs are not precluded from relying on misrepresentations allegedly made at the outset of that relationship.
Finally, GMAC contends that its misrepresentations, if any, related only to future events and are therefore not actionable. See Fuller v. Perry, 223 Ga.App. 129, 131, 476 S.E.2d 793 (1996) ("It is axiomatic that a false representation made by a defendant, to be actionable, must relate to an existing fact or a past event."). Although GMAC concedes that representations of future events are actionable if they were made with the present intention not to perform, see id. at 131-32, 476 S.E.2d 793, GMAC claims that Plaintiffs have come forward with no evidence showing that the alleged representations were made with such intent. However, there is sufficient evidence in the Record from which a jury could find that GMAC did not intend to abide by the alleged representations. See Farmers State Bank v. Huguenin, 220 Ga.App. 657, 661, 469 S.E.2d 34 (1996) (noting rule that although fraud may not be presumed, "slight circumstances may be sufficient to" support claim). Accordingly, GMAC's Motion for Summary Judgment is denied with respect to Plaintiffs' claims for fraud and negligent misrepresentation.
A promissory estoppel claim under Georgia law requires proof "that (1) the defendant made certain promises, (2) the defendant should have expected that the plaintiff would rely on such promises, and (3) the plaintiff did in fact rely on such promises to his detriment." Doll v. Grand Union Co., 925 F.2d 1363, 1371 (11th Cir.1991). GMAC contends that it is entitled to summary judgment on Plaintiffs' promissory estoppel claim because Plaintiffs cannot identify with sufficient particularity any promises that GMAC failed to perform. See Foley Co. v. Warren Eng'g, Inc., 804 F.Supp. 1540, 1544 (N.D.Ga. 1992) ("The threshold requirement of a promissory estoppel claim is, of course, that there be some enforceable promise by the defendant.") (footnote omitted). I need not address this issue, however, as Plaintiffs informed the Court in their Response Brief that this claim is being asserted only "as an alternative claim in the event that the Court finds that the Loan Documents did not require GMAC to extend a $1.5 million Line of Credit." (Pls.' Resp. to Def.'s Mot. for Summ. J. at 24 n. 25). Because I previously determined that GMAC was obligated to advance funds up to the full amount of LMC's line of credit, see supra Part III.A, Plaintiffs have no claim for promissory estoppel. See Bank of Dade v. Reeves, 257 Ga. 51, 53, 354 S.E.2d 131 (1987) (holding that "promissory estoppel is not present" where parties entered into agreement supported by consideration). Accordingly, summary judgment is granted for GMAC on Plaintiffs' promissory estoppel claim.
Finally, Plaintiffs allege that GMAC tortiously interfered with LMC's contractual and business relations with GM by canceling LMC's vehicle orders and by having
GMAC argues that it was not a stranger to LMC's franchise relationship with GM because Plaintiff's alleged in their Complaint that GMAC acts as GM's agent by providing inventory financing to GM dealerships. (Compl.¶ 57). Under Georgia law, an agent cannot tortiously interfere with its principal's contracts when acting within the scope of the agency. See Jet Air, Inc. v. National Union Fire Ins. Co., 189 Ga.App. 399, 403-04, 375 S.E.2d 873 (1988); see also Amerigas Propane, L.P. v. T-Bo Propane, Inc., 972 F.Supp. 685, 695 (S.D.Ga.1997). Because the actions of which Plaintiffs complain were undertaken in the course of the agency alleged by Plaintiffs, GMAC argues that it could not have tortiously interfered with the contractual or business relationships between GM and LMC.
Plaintiffs, on the other hand, argue that the Georgia Court of Appeals' opinion in SunAmerica Financial, Inc. v. 260 Peachtree St., Inc., 202 Ga.App. 790, 415 S.E.2d 677 (1992), requires these claims to be submitted to a jury.
Id. at 798, 415 S.E.2d 677.
Plaintiffs argue that if a parent can interfere with its subsidiary's contracts, then a subsidiary can interfere with its parent's contracts. Thus, Plaintiffs contend, the "qualified privilege" described in SunAmerica should apply to this case, and because there is evidence in the Record purportedly showing that GMAC employed wrongful means
Despite the Plaintiffs' arguments, however, I do not believe the qualified privilege announced in SunAmerica should automatically be extended to cover a subsidiary's interference with its parent's contractual and business relationships. As I read SunAmerica, the court held that a parent corporation's ownership interest in a wholly owned subsidiary does not, by itself, shield the parent from tortious interference claims as a matter of law. The court did not abandon the rule that a defendant must be a stranger to the contractual or business relationship at issue in order to be considered a third party capable of tortious interference with that relationship; indeed, the SunAmerica court repeated that principle, see 202 Ga.App. at 798, 415 S.E.2d 677 ("[I]n Georgia, `[t]ortious interference with contractual relations is applicable only when the interference is done by one who is a stranger to the contract.'") (quoting Jet Air, 189 Ga.App. at 403, 375 S.E.2d 873), and the rule has been reaffirmed in subsequent decisions. See Barnwell v. Barnett & Co., 222 Ga.App. 694, 695, 476 S.E.2d 1 (1996) ("Tortious interference with contract requires proof of: (1) an independent wrongful act of interference by a stranger to the contract....").
The Georgia Court of Appeals recently explained that "[w]here appropriate circumstances appear from the evidence that a defendant had a legitimate interest in either the contract or a party to the contract, the defendant is not a stranger to the contract." Disaster Servs., Inc. v. ERC Partnership, 228 Ga.App. 739, 741, 492 S.E.2d 526 (1997). In such a situation, even if "the defendant is a `non-signer of a particular contract[, it is not] a stranger to the contract itself or to the business relationship giving rise thereto and underpinning [the contract].'" Id. (quoting Renden, Inc. v. Liberty Real Estate Ltd. Partnership III, 213 Ga.App. 333, 336, 444 S.E.2d 814 (1994)). Although Georgia courts have interpreted the term "stranger" somewhat broadly in the context of tortious interference claims, they nevertheless
Britt/Paulk Ins. Agency, 952 F.Supp. at 1584.
Here, the Record is clear that GMAC had a legitimate economic interest in the contractual and business relationships between GM and LMC. The inventory financing arrangement between Plaintiffs and GMAC required GMAC to pay GM for vehicles that LMC purchased for lease or resale; LMC was in turn obligated to pay GMAC the principal amount advanced plus interest. The economic benefit of this relationship to GMAC was derived directly from LMC's franchise relationship with GM. Indeed, LMC's relationship with GM was a logical prerequisite to LMC's relationship with GMAC: but for GM's franchise relationship with LMC, LMC would have had no need to obtain inventory financing. Furthermore, GMAC's relationship with LMC was an integral part of LMC's overall relationship with GM; although LMC was not required to obtain inventory financing from GMAC, such financing was necessary for LMC to maintain its relationship with GM.
Under these circumstances, GMAC was not a stranger to LMC's contractual and business relationships with GM. GMAC was not only intertwined with LMC's relationship with GM, GMAC derived a direct economic benefit from those purportedly injured relations. Moreover, Plaintiffs have come forward with no evidence showing that GMAC was a stranger to LMC's franchise relationship with GM. See Britt/Paulk, 952 F.Supp. at 1584 (noting that burden is on plaintiff to show that defendant was stranger to contractual or business relationship at issue). Accordingly, GMAC's Motion for Summary
For the foregoing reasons, Plaintiffs' Motion for Partial Summary Judgment and Motion to Strike are
At oral argument, however, counsel for GMAC seemed to concede Plaintiffs' contentions regarding the 1989 agreements:
(Tr. at 26) (emphasis supplied). Therefore, for purposes of this Order, I will deem it admitted that the 1989 agreements are identical in all material respects to the December 1990 agreements that are presently in the Record.
1. February 1990 — Reduced to 65 vehicles.
2. April 1990 — Reduced to 60 vehicles.
3. July 1990 — Reduced to 35 vehicles.
4. September 1990 — Increased to 75 vehicles following $100,000.00 capital contribution by Coffee.
5. April 1991 — Reduced to 55 vehicles.
6. May 1991 — Reduced to 50 vehicles.
7. August 1991 — Reduced to 30 vehicles.
8. February 1992 — Increased to 35 vehicles following $25,000.00 capital contribution by Coffee.
9. February 1993 — Reduced to 25 vehicles, but with temporary (90-day) increase to 35 vehicles.
10. March 1993, — Credit suspended except for "sold orders."
11. July 1993 — Credit reinstated following $30,000 capital contribution by Coffee; limit set at 45 vehicles (30 new, 15 factory auction).
12. July 1994 — Financing arrangement terminated.
Plaintiffs contend that Exhibit 5 is inadmissible for summary judgment purposes because it is an unsworn and unauthenticated document. See Burnett v. Stagner Hotel Courts, Inc., 821 F.Supp. 678, 683 (N.D.Ga.1993) ("In order for a document to be considered in support of or in opposition to a motion for summary judgment, it must be authenticated by and attached to an affidavit that meets the requirements of Rule 56(e) and the affiant must be a person through whom the exhibits could be admitted into evidence."), aff'd mem., 42 F.3d 645 (11th Cir.1994). In response to Plaintiffs' motion, GMAC submitted the affidavit of James Pinsoneault, GMAC's Operations Manager, in which he identifies Exhibit 5 as pages from GMAC's Business Development Reference Guide. This showing is sufficient to meet the authentication requirements of the Federal Rules of Evidence, and therefore Plaintiffs' Motion to Strike is
Nevertheless, as pointed out by Plaintiffs' counsel at oral argument, this document is dated December 1993, which is long after the execution of the agreements in this case. Moreover, the exhibit is not a copy of GMAC's Wholesale Plan itself, but rather is a summary of that plan excerpted from GMAC's Business Development Reference Guide. Thus, there is no evidence in the Record concerning the terms of the GMAC Wholesale Plan that was in effect in December 1990 (or 1989 for that matter). Moreover, there is nothing in the excerpted pages which clearly states that GMAC has the authority to unilaterally adjust LMC's line of credit. I must note that GMAC does not argue that Exhibit 5 is part of the contract; indeed, counsel for GMAC admitted during oral argument that the pages had not been shown to Coffee and that they were only being submitted as proof of GMAC's good faith in its dealings with Plaintiffs (i.e., because the Plaintiffs were treated in accordance with GMAC's standard policies). My point, however, is that even if I were to consider Exhibit 5 as part of the parties' agreement, it does not lend support to GMAC's argument that its duty to advance funds on LMC's behalf was discretionary.
It is undisputed that no commitment fee was paid upon execution of the various agreements in this case. Although GMAC purports to distinguish some of Plaintiffs' case law on the grounds that the loans involved allegedly were commitments, GMAC refers the court to no Georgia cases which indicate that a commitment to loan money must be supported by separate consideration. The court in Studdard made no indication that such a requirement exists, and the parties have not directly addressed the issue. Moreover, GMAC does not seem to argue that its agreement with LMC was unenforceable for lack of consideration. Therefore, I decline to address this issue at this time.
(Tr. at 25).