Opinion
Civil Action No. 2:19-CV-00166-RWS
2021-09-02
OMNIBUS TRADING, INC., d/b/a Chef's Corner, a California corporation, Plaintiff, v. GOLD CREEK FOODS, LLC, a/k/a Gold Creek Processing, LLC, a Georgia corporation, Defendant.
Albert Tong, Gregory R. Aker, Burke Williams & Sorensen, LLP, Oakland, CA, Seslee S. Smith, Ryan Chorkey Burke, Morris Manning & Martin, LLP, Atlanta, GA, for Plaintiff. Louis R. Cohan, Emily Cohan, J. Bertram Levy, Jodi Kalson, Cohan Law Group, LLC, Atlanta, GA, Michelle L. Wein, Atlanta, GA, Robert A. Weber, Jr., Smith Gilliam Williams & Miles, Gainesville, GA, for Defendant.
Albert Tong, Gregory R. Aker, Burke Williams & Sorensen, LLP, Oakland, CA, Seslee S. Smith, Ryan Chorkey Burke, Morris Manning & Martin, LLP, Atlanta, GA, for Plaintiff.
Louis R. Cohan, Emily Cohan, J. Bertram Levy, Jodi Kalson, Cohan Law Group, LLC, Atlanta, GA, Michelle L. Wein, Atlanta, GA, Robert A. Weber, Jr., Smith Gilliam Williams & Miles, Gainesville, GA, for Defendant.
ORDER
RICHARD W. STORY, United States District Judge This case comes before the Court on Defendant Gold Creek Foods, LLC, a/k/a Gold Creek Processing, LLC's ("Defendant" or "Gold Creek") Motion for Summary Judgment [Dkt. 82] and Plaintiff Omnibus Trading, Inc., d/b/a Chef's Corner's ("Plaintiff" or "Chef's Corner") Motion for Partial Summary Judgment [Dkt. 85], as well as Defendant's Motion for Oral Argument [Dkt. 84] and Plaintiff's Request for Judicial Notice [Dkt. 86]. As a preliminary matter, the Court finds the briefing sufficient and does not believe oral argument is necessary. Accordingly, Defendant's Motion for Oral Argument [Dkt. 84] is DENIED. In addition, for the reasons discussed below, Defendant's Motion for Summary Judgment [Dkt. 82] is DENIED, Plaintiff's Motion for Partial Summary Judgment [Dkt. 85] is DENIED, and Plaintiff's Request for Judicial Notice [Dkt. 86] is GRANTED.
Background
I. Factual Background
This case stems from a dispute over a purported arrangement between Chef ‘s Corner and Gold Creek to process chicken for school lunches.
Chef's Corner supplies and distributes fully-cooked food products to school districts through the U.S. Department of Agriculture's ("USDA") National School Lunch Program. Every year, it enters contracts with school districts and educational clients to provide them with certain amounts of food products for the school lunch programs at agreed-upon prices that are fixed for that school year. To meet its contractual obligations, Chef's Corner obtains donated commodity food products through the USDA's school lunch program and subcontracts with other companies to process those food products before providing them to customers.
Gold Creek is a poultry processor that processes raw chickens into ready-to-eat products. Prior to the events underlying this case, Gold Creek had never processed chicken for school lunch programs before.
In September 2017, Chef's Corner and Gold Creek began negotiations for Gold Creek to provide poultry processing services to Chef's Corner for Chef's Corner's school lunch program commitments. The parties exchanged numerous phone calls, text messages, and emails over the following months. Early in their negotiations, Gold Creek assured Chef's Corner that it would soon be able to handle all poultry processing steps from beginning to end.
Previously, Gold Creek only had the equipment, experience, and capability to handle certain steps of the poultry processing work, such as deboning the raw meat. However, the company planned to expand its capabilities, such that it would be able to receive the meat, debone it, marinate it, cook it, dice it, grade it, package it, transport it, and store it.
By the spring of 2018, the parties began discussing Chef's Corner's poultry product needs for the following school year. Chef's Corner states that it repeatedly told Gold Creek that, if they were to contract for Gold Creek's poultry processing services, Chef's Corner would need a yearlong commitment to supply a certain quantity of poultry products for fixed agreed-upon prices and established payment terms. Chef's Corner later told Gold Creek exactly how many cases of processed chicken at the required specifications it would require per truckload to meet its contractual obligations. Gold Creek apparently assured Chef's Corner that it could meet these requirements. In mid-April 2018, Gold Creek requested a commitment from Chef's Corner so that it could order the necessary equipment. It also sent Chef's Corner a Credit Application & Open Account Agreement. Gold Creek promised that it would soon send over the final pricing for its poultry processing services per pound of chicken for the subsequent school year, which would give Chef's Corner "everything that [it] need[ed] to know to let us know (yes or no)." A few days later, on April 19, 2018, Gold Creek emailed Chef's Corner the final pricing. The email also detailed the volume of chicken that Chef's Corner would need to divert to Gold Creek from the USDA, the processing yields required by the USDA's guidelines, and the payment terms. Chef's Corner believed that this email constituted Gold Creek's contract offer. Then, about a week later, Gold Creek sent another email stating that it would be ready to fully handle Chef's Corner's poultry processing business if Chef's Corner agreed to work with it. Gold Creek also repeatedly encouraged Chef's Corner to transfer all its poultry processing business to it.
On April 25, 2018, Chef's Corner sent a letter of intent to Gold Creek, which apparently had some different terms than those outlined in Gold Creek's earlier final pricing email. The letter of intent also stated that it confirmed Chef's Corner's "interest" in working with Gold Creek and that Chef's Corner would be in touch "to forecast and plan for the year."
On April 27, 2018, the parties entered into a Subcontractor Agreement under Chef's Corner's National Master Processing Agreement with the USDA. Through the Subcontractor Agreement, Gold Creek agreed to "conform to all terms and conditions of [the Master Processing] Agreement." The USDA approved the Subcontractor Agreement in mid-May. Shortly thereafter, Chef's Corner instructed the USDA to divert several truckloads of chicken from Chef's Corner's existing poultry processors to Gold Creek in July 2018.
In June 2018, Gold Creek assured Chef's Corner that its equipment procurement and installation was on track and even ahead of schedule. Accordingly, at some point before July 2018, Chef's Corner apparently agreed to switch all its fully-cooked poultry processing business from its existing processors to Gold Creek.
Gold Creek's first production run and delivery was on July 9, 2018, and the production yield fell far short of Chef's Corner's expectations and what the parties had discussed. Gold Creek acknowledged to Chef's corner that it messed the first run up but promised that it would improve. Unfortunately, Gold Creek's next few deliveries in July and August 2018 also delivered much less processed chicken product than Chef's Corner expected.
This point is when the parties’ relationship began to sour. On August 15, 2018, Gold Creek sent a letter to Chef's Corner demanding immediate payment for the product it had delivered that had not been paid for, even though payment was not yet due under the terms the parties had previously discussed. Gold Creek also threatened to withhold future production if Chef's Corner did not immediately pay. The following day, Gold Creek sent another letter to Chef's Corner, in which it stated that "under the circumstances," it would be "necessary to revisit pricing with respect to your products." At that point, Gold Creek increased the prices and changed the payment terms of the parties’ poultry processing arrangement. Chef's Corner rejected these changes and asked Gold Creek not to withhold production, given that Chef's Corner still needed the processed chicken to meet its contractual commitments to school districts and other customers.
Under the terms set out in Gold Creek's earlier "final pricing" email, Chef's Corner had 30 days after it received an invoice to pay that invoice. In this case, Gold Creek apparently demanded payment less than 30 days after it sent the invoice.
In response, Gold Creek sent another letter that pointed to a Terms Disclaimer and Terms and Conditions that appeared in small font in its earlier email communications with Chef's Corner. The Terms Disclaimer stated that "[a]ll prices, terms and conditions are subject to change upon 10 days’ written notice." Finally, Gold Creek sent another letter that effectively terminated any continued relationship or arrangement between the parties. It stated that Gold Creek's interpretation was that "there was never a formal, binding agreement entered containing all necessary terms," but even if there was, it contained the disclaimers permitting Gold Creek to unilaterally change the terms. In addition, Gold Creek said that "there does not exist an enforceable processing agreement between our companies" and that it would not accept any future poultry deliveries to process for Chef ‘s Corner. Neither party budged on its position.
At its core, this dispute centers on what type of business relationship Chef's Corner and Gold Creek had. Chef's Corner believes that the parties had an enforceable contract, but that the Terms Disclaimer was not part of that contract, and that it is entitled to damages for Gold Creek's breach and repudiation of their contract. Gold Creek, on the other hand, believes that the parties did not have an enforceable contract, but that if they did, the Terms Disclaimer was part of it. Instead, Gold Creek argues that the parties simply had an open account and Chef's Corner owes it money for the chicken that Gold Creek processed for it before their business relationship fell apart.
II. Procedural History
Chef's Corner first filed its complaint against Gold Creek almost three years ago [Dkt. 1]. In January 2020, Chef's Corner amended its complaint [Dkt. 46], asserting claims against Gold Creek for breach of contract (Count I), fraud (Count II), negligent misrepresentation (Count III), breach of the implied covenant of good faith and fair dealing (Count IV), declaratory relief (Count V), and attorneys’ fees under O.C.G.A. § 13-6-11 (Count VI). Gold Creek asserted counterclaims against Chef's Corner [Dkt. 47], including breach of contract (Count I), open account (Count II), promissory estoppel (Count III), quantum meruit (Count IV), unjust enrichment (Count V), fraud (Count VI), and conversion (Count VII).
On January 15, 2021, both Chef's Corner and Gold Creek filed motions for summary judgment [Dkt. 82, 85]. Chefs Corner moves for partial summary judgment on its own breach of contract claim, while Gold Creek moves for summary judgment on all of Chef's Corner's claims and its own counterclaims for open account, promissory estoppel, quantum meruit, and unjust enrichment. In addition, Gold Creek moved for oral argument on its motion [Dkt. 84], and Chef's Corner requested judicial notice of certain exhibits filed with its motion [Dkt. 86]. Both parties opposed the other's motion for summary judgment [Dkt. 92, 96], and Gold Creek opposed Chef's Corner's request for judicial notice [Dkt. 91]. Finally, both parties filed replies in support of their respective motions for summary judgment [Dkt. 99, 100].
In its opposition to Gold Creek's motion for summary judgment, Chef's Corner abandoned its declaratory judgment claim, acknowledging that the claim was moot. (Pl.’s Opp'n to Def.’s Mot. for Summ. J., Dkt. [96], at 21-22.)
Discussion
I. Legal Standard
The standard for summary judgment is well-established. Federal Rule of Civil Procedure 56 requires that summary judgment be granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." "The moving party bears ‘the initial responsibility of informing the ... court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.’ " Hickson Corp. v. N. Crossarm Co., 357 F.3d 1256, 1259 (11th Cir. 2004) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ). Where the moving party makes such a showing, the burden shifts to the non-movant, who must go beyond the pleadings and present affirmative evidence to show that a genuine issue of material fact does exist. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
The applicable substantive law identifies which facts are material. Id. at 248, 106 S.Ct. 2505. A fact is not material if a dispute over that fact will not affect the outcome of the case under the governing law. Id. An issue is genuine when the evidence is such that a reasonable jury could return a verdict in favor of the non-moving party. Id. at 249–50, 106 S.Ct. 2505.
In resolving a motion for summary judgment, the court will "consider the record and draw all reasonable inferences in the light most favorable to the non-moving party." Blue v. Lopez, 901 F.3d 1352, 1357 (11th Cir. 2018). But the court is bound only to draw those inferences which are reasonable. "Where the records taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial." Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir. 1997) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) ). "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson, 477 U.S. at 249–50, 106 S.Ct. 2505 (citations omitted); see also Matsushita, 475 U.S. at 586, 106 S.Ct. 1348 (once the moving party has met its burden under Rule 56(a), the non-moving party "must do more than simply show there is some metaphysical doubt as to the material facts").
Finally, the filing of cross-motions for summary judgment does not give rise to any presumption that no genuine issues of material fact exist. Rather, "[c]ross-motions must be considered separately, as each movant bears the burden of establishing that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law." Shaw Constructors v. ICF Kaiser Eng'rs, Inc., 395 F.3d 533, 538–39 (5th Cir. 2004).
II. Chef's Corner's Request for Judicial Notice [Dkt. 86]
Chef's Corner asks the Court to take judicial notice under Federal Rule of Evidence 201 of several exhibits attached to its summary judgment brief, including: the USDA's published guidance titled QAD 635-Standard Yield, attached to its brief as Exhibit G; certain of the USDA's signed and certified Poultry Products Grading Certificates, collectively attached to its brief as Exhibit H; the USDA's signed and certified Reprocessing Production Certificate for the production period between July 9 and 31, 2018, attached to its brief as Exhibit I; and 71 Fed. Reg. 50269-50270 (Aug. 24, 2006), 82 Fed. Reg. 1237-1238 (Jan. 5, 2017), and 83 Fed. Reg. 18919-18920 (May 1, 2018), attached to its brief as Exhibit J. (Pl.’s Request for Judicial Notice in Supp. of Mot. for Partial Summ. J., Dkt. [86].) Gold Creek opposes Chef's Corner's request for judicial notice, arguing that the documents in question are irrelevant, not properly authenticated, and constitute hearsay. (Def.’s Resp. in Opp'n to Pl.’s Request, Dkt. [91].)
"Judicial notice is governed by Federal Rule of Evidence 201, and the Court may take such notice ‘at any stage of the proceeding.’ " IQU Cent., Inc. v. Embryolisse USA, Inc., 2021 WL 2557501, at *2 (N.D. Ga. Mar. 22, 2021) (quoting Fed. R. Evid. 201(d) ). A judicially noticed fact must be "not subject to reasonable dispute because it: (1) is generally known within the court's territorial jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201(b). "A court is required to take judicial notice if requested by a party and supplied with the necessary information." Sw. Ga. Fin. Corp. v. Colonial Am. Cas. and Sur. Co., 2009 WL 1410272, at *1 (M.D. Ga. May 19, 2009) (citing Fed. R. Evid. 201(d) ).
The first document presented by Chef's Corner for consideration is published guidance from the USDA. Courts have historically taken judicial notice of agency guidance published on the agency's website. See, e.g., Sierra Club v. U.S. Env't Prot. Agency, 964 F.3d 882, 893 n.9 (10th Cir. 2020) (taking judicial notice of EPA guidance published on the EPA's website); Porrazzo v. Bumble Bee Foods, LLC, 822 F. Supp. 2d 406, 411–12 (S.D.N.Y. 2011) (taking notice of FDA guidance documents because they were available on the FDA's website); Kao v. Abbott Labs. Inc., 2017 WL 5257041, at *3 (N.D. Cal. Nov. 13, 2017) (taking notice of USDA guidance documents). Thus, the Court takes judicial notice of the USDA's published guidance titled QAD 635-Standard Yield, attached to Chef's Corner's summary judgment brief as Exhibit G.
Chef's Corner next requests that the Court take judicial notice of certain of the USDA's signed and certified Poultry Products Grading Certificates and the signed and certified Reprocessing Production Certificate for the production period between July 9 and 31, 2018. The Eleventh Circuit has consistently held that, "[a]bsent some reason for mistrust, courts have not hesitated to take judicial notice of agency records and reports." Dimanche v. Brown, 783 F.3d 1204, 1213 n.1 (11th Cir. 2015) (citation and quotations omitted). Here, then, because the certificates at issue were prepared and maintained by the USDA under 28 U.S.C.A. § 1733, they are proper for judicial notice. The Court therefore takes judicial notice of the USDA's Poultry Products Grading Certificates and Reprocessing Production Certificate, attached to Chef's Corner's summary judgment brief as Exhibits H and I.
"Properly authenticated copies or transcripts of any books, records, papers or documents of any department or agency of the United States shall be admitted in evidence equally with the originals thereof." 28 U.S.C.A. § 1733(b).
Finally, Chef's Corner requests that the Court take judicial notice of certain sections of the Federal Register. "The Federal Register Act, 44 U.S.C. § 1507, requires that the contents of the Federal Register be judicially noticed." Sw. Ga. Fin. Corp., 2009 WL 1410272, at *1 n.1. Thus, the Court takes judicial notice of 71 Fed. Reg. 50269-50270 (Aug. 24, 2006), 82 Fed. Reg. 1237-1238 (Jan. 5, 2017), and 83 Fed. Reg. 18919-18920 (May 1, 2018), attached to Chef's Corner's summary judgment brief as Exhibit J.
In sum, Chef's Corner's Requet for Judicial Notice [Dkt. 86] is GRANTED. The Court takes judicial notice of the facts contained in Exhibits G, H, I, and J filed in support of Chef's Corner's summary judgment brief.
III. Chef's Corner and Gold Creek's Motions for Summary Judgment on Chef's Corner's Breach of Contract Claim [Dkt. 82, 85]
Chef's Corner asserted a breach of contract claim against Gold Creek, alleging that Gold Creek promised to provide fully-cooked poultry products to it at certain agreed-upon volume, pricing, delivery, and payment terms, and then breached that contract by failing to provide fully-cooked chicken in the promised quantities, repudiating its contractual obligations, unilaterally changing the contract terms, withholding delivery of already-processed chicken, and refusing to process additional chicken or perform its contractual obligations. (Am. Compl., Dkt. [46], at ¶¶ 48–51.) Both Chef's Corner and Gold Creek move for summary judgment on this claim. (Br. in Supp. of Def.’s Mot. for Summ. J., Dkt. [82-1], at 4–14; Pl.’s Br. in Supp. of Mot. for Partial Summ. J., Dkt. [85-1], at 1–3, 18–24.) Chef's Corner argues that it is entitled to summary judgment on its breach of contract claim because the parties’ communications and actions established an agreement, which Gold Creek then breached by failing to achieve the agreed-upon yields and unilaterally changing the material terms of the agreement. (Pl.’s Br. in Supp. of Mot. for Partial Summ. J., Dkt. [85-1], at 20–24.) Conversely, Gold Creek argues that Chef's Corner's breach of contract claim fails because the parties did not have an enforceable contract for the production and delivery of processed chicken aside from the Terms and Conditions and Credit Application, Chef's Corner waived any right to damages, and Chef's Corner failed to mitigate. (Br. in Supp. of Def.’s Mot. for Summ. J., Dkt. [82-1], at 6–14.)
"Under Georgia law, the elements of breach of contract are: (1) breach and the (2) resultant damages (3) to the party who has the right to complain about the contract being broken." Meunier Carlin & Curfman, LLC v. Scidera, Inc., 324 F. Supp. 3d 1269, 1278 (N.D. Ga. 2018) (citation and quotations omitted). "Of course, this also requires, as a threshold matter, the existence of a valid contract." Id. at 1279. And here, Gold Creek contests the existence of such a contract.
"To constitute a valid [written or oral] contract, there must be parties able to contract, a consideration moving to the contract, the assent of the parties to the terms of the contract, and a subject matter upon which the contract can operate." O.C.G.A. § 13-3-1. The parties do not dispute that the ability to contract, consideration, and subject matter requirements are satisfied. Instead, Gold Creek essentially focuses on mutual assent, arguing that there was no meeting of the minds between the parties.
"A contract is complete and enforceable when there is a meeting of the minds as to all essential terms." Meunier Carlin & Curfman, LLC, 324 F. Supp. 3d at 1279 (citation and quotations omitted). In determining whether the parties mutually assented to all the essential terms of the contract:
courts apply an objective theory of intent whereby one party's intention is
deemed to be that meaning a reasonable man in the position of the other contracting party would ascribe to the first party's manifestations of assent, or that meaning which the other contracting party knew the first party ascribed to his manifestations of assent.
Legg v. Stovall Tire & Marine, Inc., 245 Ga.App. 594, 538 S.E.2d 489, 491 (2000) (citation and quotations omitted). In some situations, "the only evidence of the parties’ intent is the express language of the contract." Id. But in other cases, "the circumstances surrounding the making of the contract, such as correspondence and discussions, are relevant in deciding if there was a mutual assent to an agreement." Id. (citation and quotations omitted). "Where such extrinsic evidence exists and is disputed, the question of whether a party has assented to the contract is generally a matter for the jury." Id. (citations omitted). The parties dispute the facts regarding the negotiation of the agreement at issue in this case.
There are disputes of fact as to whether Gold Creek's April 19, 2018 email to Chef's Corner was intended to be an offer inviting acceptance. Chef's Corner notes that the email was titled "Final pricing" and contained pricing, volumes, minimum yields, and payment terms for the following school year. (Pl.’s Br. in Supp. of Mot. for Partial Summ. J., Dkt. [85-1], at 1–2, 7–9, 20.) In addition, a Gold Creek representative had previewed that the email would provide "everything that you need to let us know (yes or no)." (Id. at 2, 6, 20–21.) Conversely, Gold Creek points out that, after the April 19, 2018 email, the parties continued to negotiate, and Chef's Corner sent a letter of intent with different terms than the earlier email and which confirmed the company's "interest" in working together. (Def.’s Resp. in Opp'n to Pl. Mot. for Partial Summ. J., Dkt. [92], at 19.)
There are also disputes of fact as to which terms in the April 19, 2018 email are part of the contract, if in fact there is a contract. Gold Creek notes that its April 19, 2018 email to Chef's Corner included two legal disclaimers limiting its damages and liability and a terms disclaimer permitting it to change "[a]ll prices, terms and conditions ... upon 10 days’ written notice." (Br. in Supp. of Def.’s Mot. for Summ. J., Dkt. [82-1], at 9–12; Def.’s Resp. in Opp'n to Pl. Mot. for Partial Summ. J., Dkt. [92], at 2–10, 15, 19, 23–24.) Accordingly, if the April 19, 2018 email set out the essential terms of the parties’ agreement, then Gold Creek argues that these disclaimers and limitations are necessarily also part of the contract. (Id. ) Chef's Corner disagrees, contending that it never saw any of the disclaimers and "never agreed to any provision allowing Gold Creek to unilaterally change its pricing, terms, and conditions on 10 days written notice." (Pl.’s Br. in Supp. of Mot. for Partial Summ. J., Dkt. [85-1], at 15; Reply Br. in Supp., Dkt. [99], at 1–2, 6–14.)
"It is improper for the Court to weigh this evidence at summary judgment and make credibility determinations." Murphy v. Hosanna Youth Facilities, Inc., 683 F. Supp. 2d 1304, 1313 (N.D. Ga. 2010) (citing Fletcher v. Amax, Inc., 160 Ga.App. 692, 288 S.E.2d 49, 51 (1981) ("The cardinal rule of the summary procedure is that the court can neither resolve the facts nor reconcile the issues but only look to ascertain that there is an issue.")). Disputes of fact regarding whether an agreement has been accepted are questions that are properly entrusted to a jury. Id. at 1312–13 (denying summary judgment where disputes of fact existed regarding agreement modifications, the failure to sign the contracts, the meaning of certain communications, and the involvement and awareness of certain parties).
Accordingly, the Court finds that there is a genuine dispute of material fact as to whether there was a meeting of the minds on all essential terms between the parties here. The Court necessarily cannot decide as a matter of law whether there was a breach of the alleged contract. Both Chef's Corner and Gold Creek's motions for summary judgment on Chef's Corner's breach of contract claim are therefore DENIED.
IV. Gold Creek's Motion for Summary Judgment on Remainder of Chef's Corner's Claims [Dkt. 82]
Gold Creek also seeks summary judgment on the remainder of Chef's Corner's claims against it – fraud, negligent misrepresentation, breach of the implied covenant of good faith and fair dealing, and attorneys’ fees. (Br. in Supp. of Def.’s Mot. for Summ. J., Dkt. [82-1], at 14–23.) The Court will address each claim, and Gold Creek's arguments for summary judgment as to each claim, in turn.
Several of Gold Creek's arguments for summary judgment on Chef's Corner's remaining claims are conclusory and lacking in detail or substance. Nevertheless, to be folly comprehensive, the Court will evaluate the merits of summary judgment as to each claim.
A. Fraud and Negligent Misrepresentation
Chef's Corner asserts claims against Gold Creek for fraud and negligent misrepresentation, asserting that Gold Creek made false and misleading representations regarding its production capabilities to Chef's Corner during their negotiations, intending Chef's Corner to move all its chicken processing business to it, which representations Chef's Corner relied on to its detriment. (Am. Compl., Dkt. [46], at ¶¶ 53–66.) Gold Creek moves for summary judgment on these claims, arguing that it made no false representations and did not intend to deceive Chef's Corner, that any reliance on Chef's Corner's part was unjustified and unreasonable because the required yields were impossible, and that Chef's Corner did not suffer any damages. (Br. in Supp. of Def.’s Mot. for Summ. J., Dkt. [82-1], at 14–21.) Chef's Corner opposes these arguments. (Pl.’s Opp'n to Def.’s Mot. for Summ. J., Dkt. [96], at 14–21.)
"The elements in an action for fraud are: (1) false representation by a defendant, (2) scienter, (3) intent to induce the plaintiff to act or refrain from acting, (4) justifiable reliance by the plaintiff, and (5) resulting damages to the plaintiff." Jenkins v. BAC Home Loan Servicing, LP, 822 F. Supp. 2d 1369, 1380 (M.D. Ga. 2011) (citation and quotations omitted). Under Federal Rule of Civil Procedure 9(b), a plaintiff must state the elements of a fraud claim with particularity, meaning that the plaintiff "must plead facts as to time, place, substance of the defendant's alleged fraud, specifically the details of the defendant's allegedly fraudulent acts, when they occurred, and who engaged in them." Id. (citation, punctuation, and quotations omitted). In other words, "to state an actionable claim for fraud, the plaintiff must state the who, what, when, where, and how." Id. (citation, punctuation, and quotations omitted).
"In turn, to prove negligent misrepresentation, a plaintiff must show that (1) the defendant negligently supplied false information to foreseeable persons, known or unknown; (2) such persons reasonably relied upon that false information; and (3) economic injury proximately resulted from such reliance." Bithoney v. Fulton-DeKalb Hosp. Auth., 313 Ga.App. 335, 721 S.E.2d 577, 583 (2011) (citation, punctuation, and quotations omitted). Importantly, "when the representation consists of general commendations or mere expressions of opinion, hope, expectation and the like, the party to whom it is made is not justified in relying upon it, and thus, it cannot serve as the basis for either a fraud or a negligent misrepresentation claim." Id. at 584 (citations and quotations omitted).
In other words, "the same principles apply to both fraud and negligent misrepresentation cases." Holmes v. Grubman, 286 Ga. 636, 691 S.E.2d 196, 200 (2010) (citation, punctuation, and quotations omitted). "[T]he only real distinction between negligent misrepresentation and fraud is the absence of the element of knowledge of the falsity of the information disclosed." Id. (citation and quotations omitted).
In support of its fraud and negligent misrepresentation claims, Chef's Corner points to several false or misleading representations that Gold Creek allegedly made: that it had the production capacity and experience to handle Chef's Corner's processing requirements at the guaranteed volumes, specifications, and prices; that it had the proper equipment needed to meet these requirements; that its processing equipment was in place and ready to process Chef's Corner's product; and that its employees knew how to use the equipment to meet the contractual requirements. (Am. Compl., Dkt. [46], at ¶¶ 53–66.) Chef's Corner has put forth some evidence to support the potential false or misleading nature of these claims. For example, on April 25, 2018, Gold Creek encouraged Chef's Corner to transfer all its chicken processing business to Gold Creek because "as promised ... we will be ready." (Am. Compl., Dkt. [46], at ¶ 20.) Gold Creek reiterated this message on May 17 and June 14, 2018, stating that it was "very on track" and even "ahead of schedule" with its equipment installation and preparation. (Id. at 23–24.) However, shortly after making these promises, Gold Creek employees and representatives internally communicated that the equipment installation was going to be late. (Pl.’s Opp'n to Def.’s Mot. for Summ. J., Dkt. [96], at 19–20.) By itself, this evidence does not establish as a matter of law that Gold Creek knew that its representations were false or even that Chef's Corner justifiably or reasonably relied on the representations. But it does create a fact issue as to both of Chef's Corner's fraud and negligent misrepresentation claims against Gold Creek. See Lafontaine v. Alexander, 343 Ga.App. 672, 808 S.E.2d 50, 54–55 (2017) (reversing grant of summary judgment on fraud and negligent misrepresentation claims where "reckless, if not knowingly false, representations ... [were] sufficient to sustain an action" for those claims).
Accordingly, Gold Creek's motion for summary judgment on Chef's Corner's fraud and negligent misrepresentation claims is DENIED.
B. Breach of the Implied Covenant of Good Faith and Fair Dealing
Chef's Corner asserts a claim against Gold Creek for breach of the implied covenant of good faith and fair dealing, asserting that the same actions underlying its breach of contract claim also breached the implied covenant. (Am. Compl., Dkt. [46], at ¶¶ 68–71.) Gold Creek moves for summary judgment on this claim, arguing again that there was no contract, but that even if there was, it was contractually permitted to change the contractual terms once Chef's Corner failed to pay for the processed chicken. (Br. in Supp. of Def.’s Mot. for Summ. J., Dkt. [82-1], at 21–22.) Chef's Corner responds that "whether a party acted in good faith is generally a question for a jury." (Pl.’s Opp'n to Def.’s Mot. for Summ. J., Dkt. [96], at 21.)
"In contract law, it is a well-recognized principle that both parties are under an implied duty of good faith in carrying out the mutual promises of their contract." Jenkins, 822 F. Supp. 2d at 1377–78 (citation, punctuation, and quotations omitted). "[A] duty of good faith and fair dealing is implied in all contracts in the state of Georgia." Id. at 1378 (citation, punctuation, and quotations omitted). However, a party cannot breach an implied covenant of good faith where that party "has done what the provisions of the contract expressly give him the right to do." Id. (citation and quotations omitted). In addition, "the implied duty cannot be breached apart from the contractual provision to which it pertains." 280 Partners, LLC v. Bank of N. Ga., 352 Ga.App. 605, 835 S.E.2d 377, 382 (2019) (citation and quotations omitted).
Given that the Court has already held that Chef's Corner's breach of contract claim survives summary judgment, Gold Creek's argument that Chef's Corner's claim for breach of the implied duty of good faith and fair dealing should be dismissed because there was no contract is unavailing. St. James Entm't LLC v. Crofts, 837 F. Supp. 2d 1283, 1291–92 (N.D. Ga. 2011). Furthermore, because there is a genuine dispute about whether the parties entered an enforceable contract, what the terms of that contract were, and whether Gold Creek violated those terms, the Court cannot determine as a matter of law whether Gold Creek violated its duty of good faith and fair dealing.
Accordingly, Gold Creek's motion for summary judgment on Chef's Corner's claim for breach of the implied covenant of good faith and fair dealing is DENIED.
C. Attorneys’ Fees
Finally, Chef's Corner asks for attorneys’ fees under O.C.G.A. § 13-6-11. (Am. Compl., Dkt. [46], at ¶¶ 76–77.) Gold Creek moves for summary judgment on this claim, contending that Chef's Corner has not shown that it acted in bad faith, was stubbornly litigious, or caused any unnecessary trouble or expense. (Br. in Supp. of Def.’s Mot. for Summ. J., Dkt. [82-1], at 22–23.) Chef's Corner, of course, disagrees, arguing that it has put forth more than enough evidence of Gold Creek's bad faith and the issue is for the jury to decide. (Pl.’s Opp'n to Def.’s Mot. for Summ. J., Dkt. [96], at 22–23.)
O.C.G.A. § 13-6-11 provides that "[t]he 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." "[Q]uestions concerning bad faith, stubborn litigiousness, or unnecessary trouble and expense, under O.C.G.A. § 13-6-11, are generally questions for the jury to decide." Copeland v. Home Grown Music, Inc., 358 Ga.App. 743, 856 S.E.2d 325, 333 (2021) (citation and quotations omitted). But, "if there is no evidence of bad faith or stubborn litigiousness, a court should grant a defendant's motion for summary judgment on a claim for attorney fees." Id. (citations and quotations omitted). Again, such a grant is rare. See Meunier Carlin & Curfman, LLC, 324 F. Supp. 3d at 1286 ("only in the rare case where there was absolutely no evidence to support the award of expenses of litigation would the trial court be authorized to grant summary adjudication on such issues") (citation and quotations omitted). Georgia courts have held that "bad faith warranting an award of attorney fees must have arisen out of the transaction on which the cause of action is predicated," not conduct during the litigation itself. Copeland. 856 S.E.2d at 333 (citation and quotations omitted); see also Meunier Carlin & Curfman, LLC, 324 F. Supp. 3d at 1286 (citation and quotations omitted). "In a breach of contract action, conduct rises to the level of bad faith only if it was motivated by some interested or sinister motive." Meunier Carlin & Curfman, LLC, 324 F. Supp. 3d at 1286 (citation and quotations omitted). Conduct does not amount to bad faith "where a breach of contract merely results from an honest mistake as to one's rights or duties." Id. at 1287 (citation and quotations omitted). Here, Chef's Corner argues that Gold Creek acted in bad faith by "falsely promis[ing] and guarantee[ing] that it could achieve the required yields when it could not come close," "falsely represent[ing] that everything was ahead of schedule for installation" even though the installation had not yet been scheduled, "urg[ing] Chef's Corner to leave all of its processors based on false assurance," unilaterally changing its pricing and payment terms after promising that they would stay the same for the school year, and "repudiat[ing] the contract and refus[ing] to process" any more chicken until its invoice was paid. (Pl.’s Opp'n to Def.’s Mot. for Summ. J., Dkt. [96], at 22–23.) Construing these facts in the light most favorable to Chef's Corner, the Court finds a genuine issue of material fact as to whether Gold Creek acted in bad faith sufficient to award attorneys’ fees to Chef's Corner.
Accordingly, Gold Creek's motion for summary judgment on Chef's Corner's claim for attorneys’ fees under O.C.G.A. § 13-6-11 is DENIED.
V. Gold Creek's Motion for Summary Judgment on Its Own Counterclaims [Dkt. 82]
Finally, Gold Creek seeks summary judgment on several of its counterclaims against Chef ‘s Corner, including those for open account, promissory estoppel, quantum meruit, and unjust enrichment. (Br. in Supp. of Def.’s Mot. for Summ. J., Dkt. [82-1], at 5–6, 23–24.) The Court will address each counterclaim, and Gold Creek's arguments for summary judgment as to each counterclaim, in turn.
Again, several of Gold Creek's arguments for summary judgment are conclusory and lacking in detail or substance, but the Court will consider them regardless. In addition, Gold Creek purports to argue for summary judgment on all its counterclaims by contending that "there are no genuine issues of material fact regarding Gold Creek's Counterclaims." (Br. in Supp. of Def.’s Mot. for Summ. J., Dkt. [82-1], at 6.) However, Gold Creek's brief makes no mention at all of its breach of contract or conversion counterclaims, and it provides no real argument in support of its fraud counterclaim, except to briefly contend that "Chef's Corner defrauded Gold Creek." (Br. in Supp. of Def.’s Mot. for Summ. J., Dkt. [82-1], at 20–21.) Accordingly, the Court will assume that Gold Creek does not move for summary judgment on its breach of contract, fraud, or conversion counterclaims, and it will only address Gold Creek's open account, promissory estoppel, quantum meruit, and unjust enrichment counterclaims.
A. Open Account
Gold Creek asserted an open account counterclaim against Chef's Corner, contending that Chef's Corner owes it at least $388,000 for the chicken it processed. (Answer and Countercl., Dkt. [47], at ¶ 15.) Gold Creek now appears to move for summary judgment on its open account counterclaim, though the extent of its argument is essentially that "there are no genuine issues as to any material facts regarding the open account as there was a definite amount agreed upon by the parties and owed to Defendant for the processing that was provided." (Br. in Supp. of Def.’s Mot. for Summ. J., Dkt. [82-1], at 6.) Chef's Corner contends that Gold Creek has not submitted any evidence in support of its open account theory. (Pl.’s Opp'n to Def.’s Mot. for Summ. J., Dkt. [96], at 4–8.)
"An action on an open account is a simplified pleading procedure where a party can recover what he was justly and equitably entitled to without regard to a special agreement to pay such amount for goods or services as they were reasonably worth when there exists no dispute as the amount due or the goods or services received." HessMorganHouse, LLC v. Kingdom Grp. of Cos., LLC, 415 F. Supp. 3d 1176, 1186 (M.D. Ga. 2019) (citation and quotations omitted). The claim is available to a plaintiff "where the price of such goods or services has been agreed upon and where it appears that the provider has fully performed its part of the agreement and nothing remains to be done except for the other party to make payment." Weinberg, Wheeler, Hudgins, Gunn & Dial, LLC v. Teledyne Techs., Inc., 2014 WL 2922368, at *2 (N.D. Ga. June 27, 2014) (citation, punctuation, and quotations omitted). "However, when there is a dispute that goes to either assent to the services, terms of the contract, what work was performed, the quality of the performance, or cost, then suit on account is not the proper procedure for suit, because there is a factual issue other than nonpayment on the account." Five Star Steel Const., Inc. v. Klockner Namasco Corp., 240 Ga.App. 736, 524 S.E.2d 783, 785 (1999) (citations omitted).
The reasoning applied to both parties’ motions for summary judgment on Chef's Corner's breach of contract claim applies with equal force here. To the extent the parties even agree that there was a contract at issue here, they disagree over whether they agreed to the same contract terms and what those terms were. In addition, they disagree over whether the provider of poultry processing services—Gold Creek—fully performed its part of the agreement. These disputes "take[ ] the case outside the simplified parameters of an action on open account." Meunier Carlin & Curfman, LLC, 324 F. Supp. 3d at 1284 (citation and quotations omitted).
Accordingly, Gold Creek's motion for summary judgment on its open account counterclaim is DENIED.
B. Promissory Estoppel
Gold Creek also asserted a promissory estoppel counterclaim against Chef's Corner, arguing that Chef's Corner promised to pay Gold Creek for Gold Creek's chicken processing services, Gold Creek relied on those promises and processed and delivered the chicken, and Chef's Corner must be required to pay for those services. (Answer and Countercl., Dkt. [47], at ¶¶ 17–18.) Gold Creek now moves for summary judgment on that counterclaim. (Br. in Supp. of Def.’s Mot. for Summ. J., Dkt. [82-1], at 23.) Chef ‘s Corner opposes this effort, arguing that there is no evidence it ever promised to pay Gold Creek on an open account basis or if Gold Creek breached their contract, and separately contending that Gold Creek failed to submit data as to the existence and amount of its damages. (Pl.’s Opp'n to Def.’s Mot. for Summ. J., Dkt. [96], at 23–24.)
"The doctrine of promissory estoppel is encompassed within O.C.G.A. § 13-3-44(a), which provides that ‘a promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise.’ " Woodstone Townhouses, LLC v. S. Fiber Worx, LLC, 358 Ga.App. 516, 855 S.E.2d 719, 733 (2021). "To prevail on a promissory estoppel claim, plaintiffs must show that (1) defendant made certain promises, (2) defendant should have expected that plaintiffs would rely on such promises, (3) the plaintiffs did in fact rely on such promises to their detriment, and (4) injustice can be avoided only by enforcement of the promise." Sparra v. Deutsche Bank Nat. Trust Co., 336 Ga.App. 418, 785 S.E.2d 78, 83 (2016) (citation and quotations omitted). "[W]hile the promise need not meet the formal requirements of a contract, it must, nonetheless, have been communicated with sufficient particularity to enforce the commitment." Id. (citation and quotations omitted).
This element concerns "reasonable reliance" on plaintiffs’ part. Funderbunk v. Fannie Mae, 2015 WL 11216734, at *3 (N.D. Ga. Aug. 4, 2015) (citation omitted).
"[E]stoppels are not favored by our law, and the party asserting a promissory estoppel claim bears the burden of proving all elements of the claim." Woodstone Townhouses, LLC, 855 S.E.2d at 734 (citations and quotations omitted). "If there is no evidence sufficient to create a genuine issue as to any essential element of plaintiff's claim, that claim tumbles like a house of cards" and "[a]ll other disputes of fact are rendered immaterial." Id. (citation and quotations omitted).
Here, there is evidence from which a jury could conclude that Chef's Corner promised to pay Gold Creek for Gold Creek's chicken processing services, that Chef's Corner should have expected that Gold Creek would rely on that promise, and that Gold Creek did rely on that promise to its detriment. Much less clear is the fourth element - whether injustice can be avoided only by enforcement of Chef's Corner's promise. Gold Creek has put forth evidence to show that it invested in equipment and manpower to meet Chef's Corner's chicken processing requirements thanks to Chef's Corner's promise to pay, implying that it would be unfair to allow Chef's Corner to get away without paying. Of course, Chef's Corner believes that it would be unjust to make it pay for Gold Creek's short-lived chicken processing services, given Chef's Corner's arguments and evidence that Gold Creek attempted to unilaterally change the initially agreed upon pricing, quantity, and payment terms and then refused to process any additional chicken, notwithstanding Chef's Corner's contractual obligations to its customers.
Accordingly, Gold Creek's motion for summary judgment on its promissory estoppel counterclaim is DENIED.
C. Quantum Meruit
Gold Creek asserted a quantum meruit counterclaim against Chef's Corner, arguing that it has provided valuable services to Chef's Corner for which Chef's Corner has failed to pay. (Answer and Countercl., Dkt. [47], at ¶¶ 20–21.) Gold Creek now moves for summary judgment on that counterclaim. (Br. in Supp. of Def.’s Mot. for Summ. J., Dkt. [82-1], at 23–24.) Chef's Corner opposes Gold Creek's motion, arguing that there is a dispute of fact as to whether Chef's Corner received any benefit from Gold Creek, since Gold Creek failed to achieve the agreed-upon yields and then repudiated their contract. (Pl.’s Opp'n to Def.’s Mot. for Summ. J., Dkt. [96], at 24.)
"Quantum meruit [ ] is an equitable doctrine based on the concept that no one who benefits from the labor and materials of another should be unjustly enriched thereby." Theni Gum Krishna Textile Mills (P). Ltd. v. World's Glob. Source, LLC, 2019 WL 12435702, at *2 (N.D. Ga. Sept. 18, 2019) (citations and quotations omitted). To recover on a claim for quantum meruit, a party must prove the following essential elements: "(1) the performance of valuable services; (2) accepted by the recipient or at his request; (3) the failure to compensate the provider would be unjust; and (4) the provider expected compensation at the time services were rendered." Amend v. 485 Props., 280 Ga. 327, 627 S.E.2d 565, 567 (2006) (citation omitted).
It is undisputed that Gold Creek processed some chicken for Chef's Corner at Chef's Corner's request in July and August 2018, which Chef's Corner then accepted. What is disputed, though, is the value of those services - Gold Creek presumably believes it is entitled to the $338,273.66 that it invoiced Chef's Corner and which has not been paid, plus accrued interest, while Chef's Corner contends that it received no benefit from Gold Creek and instead sustained significant losses since it had to scramble to purchase commercial chicken to fulfill its contracts with school districts. (Br. in Supp. of Def.’s Mot. for Summ. J., Dkt. [82-1], at 2, 6, 13; Pl.’s Opp'n to Def.’s Mot. for Summ. J., Dkt. [96], at 24.)
"Value of services is not to be determined from the perspective of the party rendering the services and materials but must be determined from the perspective of the recipient to determine to what extent the party was benefitted or enriched by such services; otherwise, ineffective, defective, or worthless services could create liability for the recipient." Theni Guru Krishna Textile Mills (P), Ltd. v. World's Glob. Source, LLC, 2018 WL 11336434, at *8 (N.D. Ga. Mar. 6, 2018) (citations, punctuation, and quotations omitted). Importantly, "[t]he value of services from the perspective of the recipient is uniquely that of opinion and is for jury determination as to value, if any." Id. (citations, punctuation, and quotations omitted); see also Watson v. Sierra Cont. Corp., 226 Ga.App. 21, 485 S.E.2d 563, 571 (1997), superseded by statute on unrelated arbitration analysis, as stated in Choate Constr. Co. v. Ideal Elec. Contractors. Inc., 246 Ga.App. 626, 541 S.E.2d 435, 436 (2000) ("To the extent the trial court determined liability under the theory of quantum meruit as a matter of law, the trial court erred because whether or not appellant received any benefit from appellee's work and is liable for such payment is a question of fact for the jury.").
In light of this authority, the Court concludes that the merits of Gold Creek's quantum meruit counterclaim should be determined by the jury, and Gold Creek's motion for summary judgment on this counterclaim is DENIED.
D. Unjust Enrichment
Finally, Gold Creek brought an unjust enrichment counterclaim against Chef's Corner, making an argument mirroring its promissory estoppel and quantum meruit counterclaims. (Answer and Countercl., Dkt. [47], at ¶ 23.) Gold Creek now moves for summary judgment on that counterclaim. (Br. in Supp. of Def.’s Mot. for Summ. J., Dkt. [82-1], at 24.) Chef's Corner opposes Gold Creek's motion, making the same argument it made in opposing Gold Creek's quantum meruit counterclaim. (Pl.’s Opp'n to Def.’s Mot. for Summ. J., Dkt. [96], at 25.)
"Unjust enrichment is an equitable concept that applies when there is no actual legal contract, but yet there has been a benefit conferred for which there deserves to be some compensation given to the party delivering the benefit." Jenkins, 822 F. Supp. 2d at 1377 (citation omitted). "A claim of unjust enrichment is not a tort but is an alternative theory of recovery if a contract claim fails." Id. (citation and quotations omitted). The elements of an unjust enrichment claim are: "(1) the plaintiff has conferred a benefit on the defendant; (2) the defendant has knowledge of the benefit; (3) the defendant has accepted or retained the benefit conferred; and (4) the circumstances are such that it would be inequitable for the defendant to retain the benefit without paying for it." Id. (citation omitted).
As this Court has already explained, a jury could (and likely would) find that Gold Creek conferred a benefit upon Chef's Corner by processing chicken for it and delivering the processed chicken to Chef's Corner facility. In addition, a jury would likely find that Chef's Corner knew about and accepted or retained that benefit. However, just as with Gold Creek's promissory estoppel counterclaim, it is not at all certain whether a jury would find that it was inequitable for Chef's Corner to retain that benefit without paying for it. On one hand, a jury could conclude that it was inequitable for Chef's Corner to keep the processed chicken without paying for it, notwithstanding Gold Creek's alleged subsequent conduct. Conversely, a jury could consider the circumstances and find that it was fair for Chef's Corner to keep the processed chicken without paying for it, given Chef's Corner's allegations that Gold Creek then unilaterally changed the contract terms and refused to process any more chicken until its invoices were paid. It is not the Court's province to make this factual determination.
Accordingly, Gold Creek's motion for summary judgment on its unjust enrichment counterclaim is DENIED.
Conclusion
For the foregoing reasons, Defendant Gold Creek Processing, LLC a/k/a Gold Creek Processing, LLC's Motions for Summary Judgment [Dkt. 82] and Oral Argument [Dkt. 84], and Plaintiff Omnibus Trading, Inc., d/b/a Chef's Corner's Motion for Partial Summary Judgment [Dkt. 85] are DENIED. Chef's Corner's Request for Judicial Notice [Dkt. 86] is GRANTED. The parties are directed to file a proposed consolidated pretrial order within 30 days of the entry of this Order.
SO ORDERED this 2nd day of September, 2021.