Flagg Energy Development Corp. v. General Motors Corp.

• Decision Date: 17 October 1996
• Docket Number: No. A96A1491,A96A1491
• Citation: 223 Ga.App. 259,477 S.E.2d 402
• Parties: , 96 FCDR 3789 FLAGG ENERGY DEVELOPMENT CORPORATION v. GENERAL MOTORS CORPORATION.
• Court: Georgia Court of Appeals

Page 402

477 S.E.2d 402

223 Ga.App. 259, 96 FCDR 3789

FLAGG ENERGY DEVELOPMENT CORPORATION v. GENERAL MOTORS CORPORATION.

No. A96A1491.

Court of Appeals of Georgia.

Oct. 17, 1996.

George D. Wenick, Atlanta, for appellants.

Webb & Lindsey, Mark D. Oldenburg, Peachtree, for appellee.

SMITH, Judge.

Appellants, Flagg Energy Development Corporation ("FEDCO"), CCF-1, Inc., Process Construction Supply, Inc. ("PCS"), and Kenetech Facilities Management ("KFM"), are four foreign corporations involved in a cogeneration power plant project in Hartford, Connecticut. Appellants brought suit in Fulton County State Court against General Motors Corporation ("GM"), alleging breach of a July 1990 settlement agreement regarding three turbine engines manufactured by GM and installed on the project in Connecticut. ¹

The July 1990 settlement agreement sought to resolve disputes between Allison (a GM subsidiary), certain subcontractors on the Hartford project, FEDCO, and PCS regarding the performance of two engines described in purchase order C10006, also known as units 506 and 507, and a third engine described in purchase order 9000 as an Allison 571-KA gas turbine generator, also known as unit 508. The settlement agreement recites that the terms and conditions of the purchase of the third engine are to be governed by a "Purchase Agreement" attached to the settlement agreement as Exhibit "A". That purchase agreement recites that the third engine shall be subject to the "Allison New Original Equipment Warranty and Disclaimer."

Also in connection with the settlement agreement, FEDCO and PCS executed a "Mutual Irrevocable Release" on behalf of themselves, "their affiliates, ... successors and assigns" of any and all claims other than "claims by FEDCO brought under the Purchase Agreement between Allison and FEDCO for Allison engine Model 571-KA, Series Number ASP508," the third engine, and certain claims regarding the other engines purchased under purchase order C10006. The release provides that it "may not be changed orally." GM brought a motion to dismiss the complaint as to FEDCO, PCS, and CCF-1 (a subsidiary of FEDCO), pleading the existence of a prior pending action in the Superior Court for the Judicial District of New Haven at Meriden, Connecticut. OCGA § 9-2-5. As to plaintiff KFM, GM moved for summary judgment on two bases: first, that KFM was not a party to the July 1990 settlement agreement and therefore could not bring an action for its breach; and second, that the release executed by FEDCO barred any claims that KFM may have had. The trial court granted both motions.

1. The trial court did not err in granting summary judgment as to KFM. The only claim made in the complaint was for breach of the July 1990 settlement agreement, and KFM's claim appears to apply solely to the third engine. The only indication of KFM's interest in the matter presently before this Court is KFM's allegation in the complaint that FEDCO "transferred to KFM its ownership interest and all warranties ² concerning the Third Engine," and a copy of a request for admission in the Connecticut litigation to that effect. ³

KFM's allegations regarding transfer of the engine and its warranty, however, do not constitute either an allegation or proof that FEDCO also transferred or assigned to KFM its rights under the July 1990 settlement agreement, the only basis on which appellants' complaint makes a claim against GM. Nor has KFM shown any modification of the mutual irrevocable release executed by FEDCO. By the plain language of the release itself, any modification of its terms was required to be in writing. As to the third engine, the release explicitly bars any and all claims by FEDCO, its successors, or assignees other than "claims by FEDCO brought under the Purchase Agreement." (Emphasis supplied.)

The release stipulates that it "shall be governed by the laws of the State of New York." Under New York law, the clear language of a release must be given effect. Metz v. Metz, 175 A.D.2d 938, 572 N.Y.S.2d 813 (1991) see also Greenebaum v. Barthman, 210 A.D.2d 160, 620 N.Y.S.2d 954 (1994). The same is true under Georgia law: "A release or settlement agreement is a contract subject to construction by the court. It is governed by state law applicable to contracts in general. The cardinal rule of construction is to determine the intention of the parties. But no construction is required or even permissible when the language employed by the parties in the contract is plain, unambiguous, and capable of only one reasonable interpretation." (Citations and punctuation omitted.) Darby v. Mathis, 212 Ga.App. 444(1), 445, 441 S.E.2d 905 (1994).

"In response to a motion for summary judgment, the non-moving party may not rest on generalized allegations, but must come forward with specific facts to show that there is a genuine issue for trial." (Citations omitted.) Precise v. City of Rossville, 261 Ga. 210, 212(3), 403 S.E.2d 47 (1991). KFM has not shown either an assignment of FEDCO's rights under the July 1990 settlement agreement or a modification of the mutual irrevocable release executed by FEDCO barring any claims other than those made by FEDCO itself. On the record as presented to this Court, the trial court did not err in granting summary judgment on KFM's claim.

2. Appellants assert that the trial court erred in dismissing this action as to FEDCO, CCF-1, and PCS on the basis of the prior pending action in Connecticut. GM contends the dismissal was justified under the plain language of OCGA § 9-2-5. GM's position overlooks, however, the requirement that OCGA § 9-2-5 and the related abatement statute, OCGA § 9-2-44(a), be construed together. Huff v. Valentine, 217 Ga.App. 310, 311(1), 457 S.E.2d 249 (1995). Moreover, "[t]he pendency of a prior action in another state shall not...