Daimlerchrysler Motors v. Clemente
| Decision Date | 25 September 2008 |
| Docket Number | No. A08A0870.,No. A08A0871.,No. A08A0872.,A08A0870.,A08A0871.,A08A0872. |
| Parties | DAIMLERCHRYSLER MOTORS COMPANY, LLC v. CLEMENTE. DaimlerChrysler Financial Services Americas, LLC. v. Clemente Clemente v. DaimlerChrysler Motors Company, LLC et al. |
| Court | Georgia Court of Appeals |
Karen T. White, for Appellee.
Metro Dodge, Inc. was an authorized Dodge dealership located in Snellville. Gina M. Clemente filed suit against Metro and several of its officers, alleging that Metro had misrepresented the condition of the vehicle she purchased at the dealership and had failed to pay off the outstanding loan on the vehicle she traded in as part of the sales transaction. Clemente later added as defendants the franchisor, DaimlerChrysler Motors Company, LLC ("Chrysler Motors"), and Metro's primary lender and creditor, DaimlerChrysler Financial Services Americas, LLC ("Chrysler Financial"), based on several theories of vicarious and direct liability.1 The Chrysler Defendants moved for summary judgment, which the trial court initially denied but later granted in part. The trial court also amended its summary judgment order to exclude the testimony of Clemente's expert witness.
In Case Nos. A08A0870 and A08A0871, the Chrysler Defendants contend that the trial court erred in denying in part their motions for summary judgment. We agree and reverse. In Case No. A08A0872, Clemente contends that the trial court erred in excluding her expert's testimony and in granting in part the Chrysler Defendants' motions for summary judgment. We disagree and affirm.
To prevail at summary judgment under OCGA § 9-11-56, the moving party must demonstrate that there is no genuine issue of material fact and that the undisputed facts, viewed in the light most favorable to the nonmoving party, warrant judgment as a matter of law. A defendant who will not bear the burden of proof at trial need not affirmatively disprove the nonmoving party's case; instead, the burden on the moving party may be discharged by pointing out by reference to the affidavits, depositions and other documents in the record that there is an absence of evidence to support the nonmoving party's case. If the moving party discharges this burden, the nonmoving party cannot rest on its pleadings, but rather must point to specific evidence giving rise to a triable issue. Our review of the grant [or denial] of summary judgment is de novo, and we construe the evidence and all inferences therefrom in favor of the nonmoving party.
(Citations omitted.) Henson v. Ga.-Pacific Corp., 289 Ga.App. 777, 777-778, 658 S.E.2d 391 (2008). See also Lau's Corp. v. Haskins, 261 Ga. 491, 405 S.E.2d 474 (1991). Mindful of these principles, we turn to the record in the present case.
Metro's Relationship with Chrysler Motors. Chrysler Motors distributes Chrysler, Jeep, and Dodge vehicles to a nationwide network of authorized dealers, which then sell those vehicles to the general public at retail. From September 2001 until April 2005, Metro was a dealer authorized by Chrysler Motors to sell and service Dodge vehicles in Snellville pursuant to a franchise agreement commonly referred to as a "Dealer Agreement." The Dealer Agreement set forth a number of standards that had to be met by Metro to retain the franchise and delineated several situations in which Chrysler Motors could terminate the franchise, whether with or without notice or an opportunity to cure. In addition to sales and service standards, the Dealer Agreement described a number of financial standards that Metro was required to meet.
Chrysler Motors also created a "Five Star Certification Program" for its dealers. Chrysler Motors dealers qualified for the program if they met certain criteria aimed at increasing customer satisfaction. In order to qualify, a dealer was required to, among other things, have processes and procedures in place for customer follow-up, trained sales and service staff, and a facility with ample parking and convenient waiting areas. Qualification, however, was not dependent on a dealer meeting any capitalization or other financial requirements. If a dealer met the criteria of the Five Star Certification Program, the dealer was entitled to display the Five Star logo and advertise itself as a Five Star dealership. A dealer's certification under the program was reevaluated on an annual basis. Metro was certified as a Five Star dealer by Chrysler Motors in April 2003, and its certification was renewed the following year.
During the course of its operation, Metro submitted monthly financial statements to Chrysler Motors. Sales and service representatives from Chrysler Motors also regularly visited Metro.
Metro's Relationship with Chrysler Financial. Metro acquired its new vehicle inventory from Chrysler Motors by ordering vehicles and paying for them prior to delivery. In contrast to the used vehicles sold at the dealership, Metro financed its new vehicle inventory through an open line of credit commonly referred to as a "floor plan." Most of the vehicles at Metro were financed under the floor plan. Metro obtained its floor plan financing from Chrysler Financial, the terms of which were memorialized in a "Master Loan and Security Agreement" (the "Loan Agreement"). Under the floor plan, Metro would order new vehicles from Chrysler Motors; Metro would pay for the vehicles through its credit line with Chrysler Financial, creating a wholesale loan between Metro and Chrysler Financial; and Chrysler Motors would ship the vehicles to Metro. Metro then was obligated to repay the wholesale loan on a floor planned vehicle to Chrysler Financial once the vehicle was sold at retail. The Loan Agreement stated that in return for providing financing, Chrysler Financial would be granted a security interest in the "collateral," which was defined broadly to include all of Metro's new and used vehicle inventory, all dealership equipment, and accounts receivable and other intangible contract rights of the dealership. The Loan Agreement further provided that Metro would be in default if, among other things, Metro failed to meet certain minimum capitalization requirements. In the event of default, the Loan Agreement authorized Chrysler Financial to appoint a "keeper" to enter and remain on Metro's premises and take various actions to protect Chrysler Financial's collateral.
Metro's Financial Difficulties. Around October 2003, Chrysler Financial audited Metro and discovered that the dealership was undercapitalized by approximately $1,800,000. As a result of the audit, Chrysler Financial placed Metro on a "finance hold," meaning that Chrysler Financial temporarily ceased providing Metro with an open line of credit for the purchase of new vehicle inventory. In an effort to regain financial stability and reestablish its floor plan, Metro informed Chrysler Motors of its financial difficulties and requested a loan to assist with its capitalization problem, a request that ultimately was denied. Metro also requested a loan from Chrysler Financial, but that request also was denied.
Appointment of the Keeper. Due to the audit results, Chrysler Financial entered into a "Recapitalization Agreement" with Metro under which Chrysler Financial agreed to forbear from demanding immediate payment in full of all of its outstanding loans in return for Metro meeting certain capitalization conditions over a period of months. Additionally, the Recapitalization Agreement entitled Chrysler Financial to place a keeper on site at Metro to ensure that payoff of the outstanding wholesale loans on floor planned vehicles occurred "immediately upon consummation of the sale" of a vehicle.
The keeper placed at Metro began performing a vehicle inventory and conducting a financial review of the dealership on a daily basis. Each day, the keeper would share the information he gathered from his financial reviews with management personnel at Chrysler Financial. The financial reviews revealed that Metro was in dire financial condition and as a result was falling behind on its tax obligations, was having trouble paying its debts owed to various creditors, and was failing to promptly pay off the liens on used vehicles that had been traded in by customers as part of their purchase transactions with Metro.
Due to the financial condition of the dealership and concern that its collateral might be in jeopardy, Chrysler Financial instructed the keeper, pursuant to the Loan and Recapitalization Agreements, to take possession of the certifications of origin2 and titles of Metro's vehicle inventory. As a result, the keeper could veto the sale of a vehicle if the financial structure of the deal was insufficient to cover any money owed to Chrysler Financial.
The keeper also had Metro set up a special banking account, referred to as the "proceeds account," based on the broad authority granted him under the Loan and Recapitalization Agreements. Upon Metro's sale of any vehicle, the purchase monies were deposited into the proceeds account. The keeper then used the deposited funds to satisfy the wholesale loans owed to Chrysler Financial on floor planned vehicles that had been sold. After paying off the wholesale loans, any remaining funds were transferred out of the proceeds account into Metro's operating account. This process occurred on a daily basis. Once funds were deposited into Metro's operating account, Metro decided how to use those funds to meet its other financial obligations.
In April 2004, Chrysler Financial permanently terminated all credit lines with Metro because...
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