American Viking Contractors, Inc. v. Scribner Equipment Co., Inc.

Decision Date05 November 1984
Docket NumberNo. 83-8748,83-8748
Citation745 F.2d 1365
Parties39 UCC Rep.Serv. 1354 AMERICAN VIKING CONTRACTORS, INC., Plaintiff, v. SCRIBNER EQUIPMENT CO., INC., et al., Defendants. SCRIBNER EQUIPMENT CO., INC., Plaintiff-Appellee, v. Henry F. NELSON, Defendant-Appellant.
CourtU.S. Court of Appeals — Eleventh Circuit

D.W. Latimore, Jr., Teresa D. Darroch, Atlanta, Ga., for defendant-appellant.

A. Felton Jenkins, Jr., Atlanta, Ga., for Scribner & Prude.

Appeal from the United States District Court for the Northern District of Georgia.

Before FAY and JOHNSON, Circuit Judges, and YOUNG *, District Judge.

FAY, Circuit Judge:

Appellee Scribner Equipment Company, Inc. ("Scribner") brought suit against Henry Nelson seeking the outstanding, unpaid balance due on a corporate purchase money note which Nelson had personally guaranteed. Summary judgment was entered by the district court in favor of Scribner for $37,919.03 plus the appropriate interest. Nelson argues on appeal that summary judgment was improper because there were several questions of material fact which should have been put before a jury. After carefully reviewing the record, we hold that the district court was justified in its conclusion that there were no genuine issues as to any material fact. Summary judgment was therefore proper and the decision of the district court is affirmed.

FACTS

American Viking Contractors, Inc. ("AVC") is a Pennsylvania corporation with its principal place of business in the state of Georgia. Scribner Equipment Co., Inc. is incorporated under the laws of Delaware and its principal place of business is in the state of Mississippi. In the fall of 1980, AVC purchased from Scribner certain mining equipment for use in its deep coal mining operations. The total cost to AVC was approximately $1,011,000 for which AVC executed six purchase money notes. In March of 1981, after making payments totalling approximately $133,000, AVC encountered financial difficulty and was unable to continue making payments on its debt. In the months which followed, several meetings were held between Henry Nelson, General Manager of AVC, and various representatives of Scribner. While restructuring of AVC's debt was among the topics discussed at these meetings, the parties disagree as to whether a final restructuring agreement was ever reached.

On September 2, 1981, Larry Lauver, President of AVC, delivered to Scribner the title to certain unencumbered equipment to be used as additional security for AVC's debt. The next day Nelson, whose family owns all the stock in AVC, executed a guaranty agreement making him personally liable for $612,010; an amount which represents the largest of the six notes held by Scribner. A month after Nelson's personal guaranty was signed, AVC's financial state was still such that it was unable to make a payment on its debt for the mining equipment. Consequently, Scribner proceeded to repossess the equipment which it had previously sold to AVC. On November 2, 1981, Scribner sold the mining equipment at a public foreclosure sale. Although the equipment was advertised and other bids were received, Scribner was the highest bidder and consequently purchased the equipment for $152,000. The mining equipment was subsequently sold by Scribner for $599,955.

COURSE OF PROCEEDINGS

On December 31, 1981, AVC filed suit in the Superior Court of Dade County, Georgia, against Scribner and various executives of that corporation. 1 In its complaint, AVC sought an order cancelling AVC's indebtedness to Scribner and compelling Scribner to return the mining equipment which it had repossessed. 2 The defendants subsequently removed the case to the United States District Court for the Northern District of Georgia where, in addition to their answer, they filed a counterclaim seeking recovery of the deficiency owed Scribner by AVC. A separate action also was filed by Scribner against Nelson for the outstanding unpaid balance of $337,919.03 due on the promissory note guaranteed by Nelson. 3 Nelson answered the complaint by admitting that he signed the guaranty but alleging that he did so based on Scribner's alleged promise to restructure AVC's debt. Nelson thereafter filed a counterclaim against Scribner seeking to have his guaranty declared null and void and to recover punitive damages and attorney's fees.

On February 18, 1983, Scribner filed a motion for summary judgment on its counterclaim against AVC and in the separate action against Nelson on his personal guaranty. On September 20, 1983, the district court entered summary judgment in favor of Scribner in both cases. In its order granting summary judgment, the district court found that the unpaid balance on the note guaranteed by Nelson totalled $637,919.03, and that the value of the repossessed mining equipment which secured this note was $600,000 at the time of foreclosure. Accordingly, summary judgment was entered against Nelson for $37,919.03.

It should be noted at the outset that this appeal involves only Scribner's separate action against Nelson. AVC never responded to Scribner's motion for summary judgment nor did it appeal the order granting that motion. That case, therefore, is not now before us.

STANDARD OF REVIEW

Nelson's primary contention on appeal is that the district court erred in granting Scribner's motion for summary judgment because there were several questions of material fact to be decided by a jury. Rule 56(c) of the Federal Rules of Civil Procedure states that summary judgment shall be entered 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." "The party seeking summary judgment bears the exacting burden of demonstrating that there is no genuine dispute as to any material fact in the case." Clemons v. Dougherty County, Georgia, 684 F.2d 1365, 1368 (11th Cir.1982) (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970) and Environmental Defense Fund v. Marsh, 651 F.2d 983, 990-91 (5th Cir.1981)). Once the moving party has sufficiently supported his motion for summary judgment, the opposing party must come forward with significant probative evidence demonstrating the existence of a triable issue of fact. Ferguson v. National Broadcasting Co., Inc., 584 F.2d 111, 114 (5th Cir.1978). 4 In reviewing the decision of the district court granting Scribner's motion for summary judgment, we must apply the same legal standards as those which control the district court. Clemons, 684 F.2d at 1368.

RESTRUCTURING AGREEMENT

The first issue of material fact which Nelson argues precluded summary judgment is whether a final restructuring agreement was ever reached. Nelson takes the position that there was a valid agreement by Scribner to restructure AVC's debt and to not foreclose on the mining equipment. He further argues that this restructuring agreement was the inducement for the additional collateral and the personal guaranty. Scribner, on the other hand, maintains that while a restructuring of AVC's debt was discussed, no final agreement was ever reached. According to Scribner, Nelson's personal guaranty was given as security for an antecedent debt and not in return for any restructuring agreement.

The district court concluded that any oral promise by Scribner in regard to restructuring was "too indefinite to be enforceable." (R.Vol. 1 at 249). We agree. The record indicates that not one of the terms essential to a definitive restructuring agreement was ever agreed to. The duration of the new payment period was not specified. There was no agreement as to the amount of the periodic payments nor what rate of interest would apply. As Nelson himself testified, "everything was in a discussion stage or period. Nothing had been nailed down...." (R.Vol. 1 at 230). Under Georgia law, an alleged contract cannot be enforced in any form of action if its terms are vague, indefinite and uncertain. General GMC Trucks, Inc. v. Mercury Freight Lines, 704 F.2d 1237, 1240 (11th Cir.1983) (applying Georgia law); Bagwell-Hughes, Inc. v. McConnell, 224 Ga. 659, 164 S.E.2d 229, 231 (1968); West v. Downer, 218 Ga. 235, 127 S.E.2d 359, 364 (1962); Sawyer v. Citizens and Southern National Bank, 164 Ga.App. 177, 296 S.E.2d 134, 137 (1982).

The most which can be said concerning the negotiations of these parties is that they resulted in an agreement to agree in the future. The law of Georgia is clear that unless all terms and conditions are agreed upon and nothing is left to future negotiations, a contract to enter into a contract in the future is a nullity. Dumas v. First Federal Savings and Loan Association, 654 F.2d 359, 360-61 (5th Cir.1981); 5 Hartrampf v. Citizens & Southern Realty Investors, 157 Ga.App. 879, 278 S.E.2d 750, 752 (1981). The agreement which Nelson alleges existed clearly falls within the ambit of this rule. We, therefore, agree with the district court's finding that the alleged agreement is too indefinite to be enforceable. Furthermore, Nelson's inability to show a meeting of the minds as to even a single term essential to a restructuring plan convinces us that the district court was justified in finding that there were no genuine issues as to any material fact regarding this matter. Consequently, the order granting Scribner's motion for summary judgment was not improper in this respect.

ACCORD AND SATISFACTION

Nelson further argues that Scribner had no right to repossess the mining equipment because AVC's compliance with Scribner's request for additional collateral and a personal guaranty from Nelson resulted in an accord and satisfaction of the previous debt agreement. This argument, however, is fatally dependent on Nelson's first assertion that a valid restructuring agreement exists.

Under Georgia law, an accord and satisfaction exists when the parties to an original agreement satisfy their obligations under that agreement by a subsequent agreement. See,...

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