Agri-Afc, LLC v. Everidge
| Decision Date | 30 January 2019 |
| Docket Number | CIVIL ACTION NO. 5:16-cv-00224-TES |
| Parties | AGRI-AFC, LLC, Plaintiff, v. RONALD JOE EVERIDGE, III; RABBIT RIDGE FARMS, INC.; RONALD J. EVERIDGE, JR.; DADDY RABBIT FARMS, INC.; and JEANNA D. EVERIDGE, Defendants. |
| Court | U.S. District Court — Middle District of Georgia |
ORDER GRANTING IN PART AND DENYING IN PART CROSS-MOTIONS FOR PARTIAL SUMMARY JUDGMENT
The following facts are undisputed. In 2015, Defendants Ronald Everidge, Jr. ("Ron"), Jeanna Everidge ("Jeanna"), and their son Ronald Everidge, III ("Tripp," now deceased)1 farmed several tracts of land through their businesses, Defendants Daddy Rabbit Farms, Inc. ("Daddy Rabbit") and Rabbit Ridge Farms, Inc. ("Rabbit Ridge"), collectively referred to as the "Everidge Entities" or "Entities." Ron and Jeanna are husband and wife, and Tripp was their son. Ron is the sole shareholder and president of Rabbit Ridge, Jeanna is the sole shareholder and president of Daddy Rabbit, and Tripp assisted his father in farming for Rabbit Ridge. Essentially, Plaintiff Agri-AFC, LLC alleges that Defendants executed four promissory notes in 2015, paid for farming products with proceeds from the promissory notes, used those farming products, and then defaulted on the notes after they became due in 2016.2
On May 6, 2015, Tripp allegedly executed an "Input Finance Agreement containing Loan Agreement, Promissory Note, and Security Agreement" by which he borrowed $150,000.00 from The Cooperative Finance Association, Inc. ("CFA") in order to cover expenses incurred in dealing with Plaintiff, a seller of farming products. [Doc. 46-6, p. 1, Section A(2)]. On June 2, 2015, Tripp and CFA allegedly modified the Input Finance Agreement to increase the line of credit to $250,000.00. [Id. at p. 7]. The loan came due on February 15, 2016. [Id. at p. 4]. On April 12, 2016, CFA sent a letter to Tripp informing him that he was in default on the loan and owed the principal amount of the loan ($250,000.00) in addition to $11,559.22 in interest accrued as of the date of the letter. [Doc. 46-13, p. 1]. When Tripp failed to pay the amount due, CFA sent him a second letter on May 2, 2016, reminding him that the he was in default on the loan and updating the accrued interest amount to $13,121.71. [Id. at p. 3]. A month later, CFA filed the instant action against Tripp for breach of contract, seeking to recover the principal amount of the loan, accrued interest, and attorney's fees and costs. [Doc. 1].
CFA assigned the Note to Agri-AFC on August 1, 2017, [Doc. 46-7], and the Court substituted Agri-AFC for CFA as the plaintiff in this action [Doc. 40]. Plaintiff amended its Complaint and now seeks recovery relating to the Tripp Note under two theories. First, Plaintiff asserts a breach of contract claim based solely on the terms of the Tripp Note as modified. [Doc. 46, Count XI]. Plaintiff alleges that either Tripp or Ron could be liable for this breach of contract claim because, if Tripp did not sign the Note himself, Ron signed it and is liable as Tripp's agent. [Id. at Count XIV]. Alternatively, Plaintiff alleges that, if Tripp did not sign the Note himself, he is still liable for the amount owed under the Note because Ron signed it with Tripp's apparent authority. [Id. at Count XV]. Under the second alternative, Plaintiff alleges that, if Tripp did not sign the Note himself and if Ron did not sign the Note at all or do so with Tripp's apparent authority, Tripp is still liable for the amount owed under the Note because he ratified any unauthorized signature by accepting goods paid for with proceeds from the Note. [Id. at Count XVI].
Plaintiff also alleges that, if Tripp is not liable under the terms of the Note, he is liable on a theory of open account because he accepted goods paid for with proceeds from the Note but did not pay CFA back for the advanced funds. [Id. at Count XII]. But Plaintiff alternatively alleges that, if the facts show that Tripp did not accept the goods paid for with funds advanced from the Tripp Note, Daddy Rabbit and/or Rabbit Ridge are liable because they accepted those goods and used them. [Id. at Counts X, XVII].
Under both theories (breach of contract and unjust enrichment/open account), Plaintiff also argues that it is entitled to attorney's fees and expenses. [Id. at Count XIII].
On May 18, 2015, Jeanna purportedly executed an "Input Finance Agreement containing Loan Agreement, Promissory Note, and Security Agreement" in her individual capacity and as president of Daddy Rabbit. [Doc. 46-2]. Under the terms of the agreement, Jeanna and Daddy Rabbit jointly borrowed $250,000.00 from CFA in order to cover expenses incurred in dealing with Plaintiff. As with the Tripp Note, this Daddy Rabbit Note matured on February 15, 2016. [Id. at p. 4]. On April 12, 2016, CFA notified Jeanna and Daddy Rabbit that they were in default on the Daddy Rabbit Note and owed $250,000.00 in principal and $13,665.30 in interest as of the date of the letter. [Doc. 46-11, p. 1]. On May 2, 2016, CFA sent Jeanna and Daddy Rabbit a second letter regarding their default and updating the accrued interest amount to $15,227.81. [Id. at p. 3].
CFA assigned the Daddy Rabbit Note to Plaintiff on August 1, 2017, [Doc. 46-3], and Plaintiff filed suit against Jeanna and Daddy Rabbit approximately three months later [Doc. 46]. Plaintiff seeks to recover under two theories. First, Plaintiff asserts a breach of contract claim based solely on the terms of the Note. [Doc. 46, Count I]. Plaintiff alleges that, under this breach of contract theory of recovery, Jeanna and Daddy Rabbit are jointly liable for the total principal and accrued interest on the Note, plus attorney's fees and costs under Georgia law. [Id. at Counts I, III]. However, Plaintiff alleges that, if Jeanna did not sign the Note herself, Ron signed it and is liable as Jeanna and Daddy Rabbit's agent. [Id. at Count IV]. Alternatively, Plaintiff alleges that, even if Jeanna did not sign the Note herself, she and Daddy Rabbit are still liable for the amount owed under the Note because Ron signed it with their apparent authority. [Id. at Count V]. In the second alternative, Plaintiff alleges that, if Jeanna did not sign the Note herself and if Ron did not sign the Note at all or did not do so with Jeanna and Daddy Rabbit's apparent authority, Jeanna and Daddy Rabbit are still liable for the amount owed under the Note because they ratified any unauthorized signature by accepting goods paid for with proceeds from the Note. [Id. at Count VI].
Plaintiff also alleges that, if Jeanna and Daddy Rabbit are not liable under the terms of the Note, they are liable for unjust enrichment or on a theory of open account because they accepted goods paid for with proceeds from the Note but did not pay CFA back for the advanced funds. [Id. at Count II]. Plaintiff also seeks attorney's fees and expenses under this theory. [Id. at Count III].
On the same day Jeanna allegedly executed the Daddy Rabbit Note, Ron executed an identical $250,000.00 note (hereinafter the "Rabbit Ridge Note") in his individual capacity and as president of Rabbit Ridge Farms. [Doc. 46-4]. The relevant terms were the same as those in the Daddy Rabbit Note and the Tripp Note. CFA sent two letters to Rabbit Ridge and Ron on April 12 and May 2, 2016, informing them that they had defaulted on the Note. [Doc. 46-12]. CFA also assigned the Rabbit Ridge Note to Plaintiff on August 1, 2017. [Doc. 46-5].
Plaintiff filed suit against Ron and Rabbit Ridge on October 27, 2017, seeking to recover under the terms of the Rabbit Ridge Note and under a theory of unjust enrichment/open account. [Doc. 46]. First, Plaintiff alleges that Ron and Rabbit Ridge are liable for breaching the loan agreement by failing to pay the amount due under the terms of the Note. [Id. at Count VII]. Second, Plaintiff alleges that, if Ron and Rabbit Ridge are not liable under the terms of the Note, they are liable for unjust enrichment or on a theory of open account because they accepted goods paid for with proceeds from the Note but did not pay CFA back for the advanced funds. [Id. at Count VIII]. But Plaintiff alternatively alleges that, if the facts show that Ron and/or Rabbit Ridge did not accept the goods paid for with funds advanced from the Rabbit Ridge Note, Daddy Rabbit is liable because it accepted those goods and used them. [Id. at Count X].
Finally, on August 21, 2015, Jeanna purportedly executed a second loan agreement, this time with Producers Credit Corporation, in her individual capacity and as president of Daddy Rabbit. [Doc. 46-14]. Under the terms of the agreement, Jeanna and Daddy Rabbit borrowed $250,144.00 and posted their crops (present and future), farming equipment, and crop inputs (i.e. seeds, fertilizer, chemicals, and other products used in the growing and harvesting of crops), among other instruments and future payments, as collateral. [Id. at pp. 1, 5]. The loan matured on February 1, 2016. [Id. at p. 1]. At some point prior to May 13, 2016, Producers Credit Corporation assigned this "Jeanna Note" to Plaintiff, who informed Jeanna and Daddy Rabbit on that date that they were in default on the loan. [Doc. 46-16].
Plaintiff is suing Jeanna and Daddy Rabbit in relation to the "Jeanna Note" under a breach of contract theory and an open account theory. [Doc. 46]. First, Plaintiff alleges that Jeanna and Daddy Rabbit are liable for principal and accrued interest under the terms of the Note. [Id. at Count XVIII]. However, if Jeanna did not sign the Note, Plaintiff alleges that Ron is liable as Jeanna and Daddy Rabbit's agent for signing the Note. [Id. at Count XX]. In the second alternative, Plaintiff alleges that if Ron signed the Note on Jeanna and Daddy Rabbit's behalf, Jeanna and Daddy Rabbit are liable because Ron signed the Note with their apparent authority. [Id. at Count XXI]. In...
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