Nat'l Elite Transp. LLC v. Angel Food Ministries, Inc.

Decision Date12 July 2011
Docket NumberCivil Action No. 3:11-CV-41(CAR)
PartiesNATIONAL ELITE TRANSPORTATION, LLC, a Delaware limited liability company, Plaintiff, v. ANGEL FOOD MINISTRIES, INC., a Georgia Corporation, and WESLEY JOSEPH WINGO, Defendants.
CourtUnited States District Courts. 11th Circuit. Middle District of Georgia

ORDER ON DEFENDANTS' PARTIAL MOTION TO DISMISS

Before the Court is the Motion to Dismiss [Doc. 7 & 16 ] filed by Defendants Angel Food Ministries, Inc. ("Angel Food"), and Wesley Wingo ("Wingo"). Through this Motion, Defendants move, pursuant to Fed. R. Civ. P. 12(b)(6), to dismiss Counts II, III, IV, and V of Plaintiff's Amended Complaint for failure to state a claim upon which relief may be granted.1 Having considered the pleading and the briefs filed, the Court finds that Defendants' Partial Motion to Dismiss is due to be GRANTED in part and DENIED in part. Count IV of the Amended Complaint and all claims against Defendant Wingo are dismissed. Counts II, III, and V of the Amended Complaint, however, may proceed as alleged against Defendant Angel Food.2

STANDARD OF REVIEW

In considering dismissal of claims under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a district court must accept the allegations set forth in the complaint as true and construe facts in the light most favorable to the plaintiff. See Kirby v. Siegelman, 195 F.3d 1285, 1289 (11th Cir. 1999) (per curiam). A "complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations;" however, "a plaintiff's obligation to provide the grounds of his entitle[ment] to relief requires more than labels and conclusions." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 545 (2007) (internal quotation marks and citation omitted). "Factual allegations must be enough to raise a right to relief above the speculative level." Id.

Moreover, on a motion to dismiss, the court's function is not to assess the veracity or weight of the evidence; the court must merely determine whether the complaint is legally sufficient. See Sherman v. Helms, 80 F. Supp. 2d 1365, 1368 (M.D. Ga. 2000). Accordingly, the issue is whether the plaintiff is entitled to present evidence in support of his claims, not whether those claims will ultimately succeed. See Little v. City of N. Miami, 805 F.2d 962, 965 (11th Cir. 1986). Because this standard imposes such a heavy burden on the defendant, Rule 12(b)(6) motions are rarely granted. See Washington v. Dep't of Children & Families, 256 F. App'x 326, 327 (11th Cir. 2007); Beck v. Deloitte & Touche, 144 F.3d 732, 735-36 (11th Cir. 1998).

FACTUAL ALLEGATIONS

The present case arises out of an alleged breach of contract. In its Amended Complaint, Plaintiff National Elite Transportation ("NET") alleges that it entered into a "Shipper/Broker Transportation Agreement" with Defendant Angel Food on October 24, 2008. In this document, NET agreed to arrange freight transportation for Angel Food, and Angel Food agreed to utilize the services of NET to arrange for transportation of its freight. Pursuant to the terms and conditions ofthe contract, Angel Food was required to pay NET the cost of each shipment brokered by NET plus a 20% administrative fee (referred to as a "cost plus 20%" agreement). The contract also contained a "rate savings incentive provision," which required that Angel Food compensate NET 30% of all rate savings secured. The parties included the rate savings provision so that NET would have an incentive to broker shipments of Angel Food's freight at the best possible rate. Defendant Wingo negotiated and signed the contract on behalf of Angel Food.

In reliance on this provision and Defendant Wingo's representations that the rate savings incentive compensation would be paid, NET brokered freight shipments on behalf of Defendants and aggressively negotiated lower rates with carriers to save Angel Food substantial shipping costs. During the twelve-month term of the contract, NET earned not less than $ 1,000,000.00 under the rate saving incentive provision. However, Defendants never paid NET under the rate saving incentive provision, and to date Defendants have refused to compensate NET under the provision despite NET's repeated requests for payment. Defendants now contend that there was no meeting of the minds among the parties - regarding the rate saving incentive provision - when the contract was formed and that the provision is thus unenforceable.

DISCUSSION

NET's Complaint is pled in five Counts: I (breach of contract); II (promissory estoppel); III (unjust enrichment); IV (negligent misrepresentation); and V (attorney fees). The first Count is pled against Defendant Angel Food alone; the remaining Counts are pled against both Defendants. Defendants have moved to dismiss Counts II, III, IV, and V of the Amended Complaint for failure to state a claim upon which relief may be granted, pursuant to Fed. R. Civ. P. 12(b)(6). For the reasons discussed below, the Court finds that Count IV and all claims against Defendant Wingo aredue to be dismissed. Counts II, III, and V of the Amended Complaint, however, may proceed as pled against Defendant Angel Food. The Court will discuss each of the challenged Counts in turn below.

A. Count II - Promissory Estoppel

In Count II of the Amended Complaint, NET attempts to state a claim against both Defendants for promissory estoppel. To state a promissory estoppel claim under Georgia law, a plaintiff must allege that (1) the defendants made certain promises, (2) the defendants should have expected that the plaintiff would rely on such promises, (3) the plaintiff did in fact rely on such promises to his detriment, and (4) injustice can be avoided only by enforcement of the promise. Houston v. Houston, 267 Ga. App. 450, 451 600 S.E.2d 395 (2004); Kamat v. Allatoona Federal Sav. Bank, 231 Ga. App. 259, 263, 498 S.E.2d 152 (1998); see also, OCGA § 13-3-44(a).

In the Motion to Dismiss, Defendants to do not challenge whether NET has alleged facts supporting each of these elements with respect to Defendant Angel Food. Indeed, the Amended Complaint alleges that "Angel Food and Wingo promised to pay NET a rate savings incentive of 30% on each shipment that was brokered by NET on behalf of Angel Food at a rate below the published shipping rate for that particular route," and that Defendants "knew or should have reasonably expected" that the promise to pay rate savings incentives would "induce NET to broker and arrange for the shipments of Angel Food's freight at negotiated rates lower than the published rates." The Complaint further alleges that this alleged promise in fact induced NET to negotiate lower rates with carriers and that "[b]ut for this . . . provision, NET would have earned greater compensation rates by brokering and arranging for the shipments of Angel Food's freight at higher rates in light of the 'cost plus 20%' compensation provision." NET thus sufficiently alleges that it brokered and arranged for the shipment of Angel Food's freight at lower rates and reasonably relied, to its detriment, on Angel Food's written promise to pay rate savings incentive compensation.

In their Motion, however, Defendants argue that this Count must be dismissed as to Defendant Wingo because the Complaint alleges only that Wingo acted as an agent of Angel Food and pleads no facts supporting a claim against Wingo personally. The Court agrees.

Under Georgia contract law, an agent assumes no personal liability when he acts for a disclosed principal within the scope of his authority; his actions are deemed to be those of the principal, who is alone liable in contract. Candler v. Clover Realty Co., 125 Ga. App. 278, 280, 187 S.E.2d 318 (1972). Thus, if during contract negotiations, a principal is disclosed and the agent professes to act for the principal when negotiating a contract, the form in which the agent acts is immaterial and the act will be held to be the act of the principal. Eayrs v. Absolute Roofing, Inc., 300 Ga. App. 825, 826, 686 S.E.2d 432 (2009); O.C.G.A. § 10-6-23. The agent cannot be held personally liable for any subsequent breach of the contract even if a plaintiff later contends that he thought he was dealing with the agent as an individual. Eayrs, 300 Ga. App. at 826.

Though here the Amended Complaint technically pleads all elements of a promissory estoppel claim against both Defendants and alleges that "Wingo represented . . . that the rate savings incentive compensation would be paid," NET does not allege that Defendant Wingo is personally liable for Angel Food's debt or that Wingo otherwise personally guaranteed that Angel Food would make the rate savings incentive payments. Rather, when read as a whole, the Amended Complaint alleges that NET and Angel Food, not Wingo, entered into the Shipper/Broker Transportation Agreement and that Wingo negotiated and signed the agreement "on behalf of" Angel Food. There is no allegation in the Amended Complaint that Defendant Wingo promised to pay the rate incentive compensation himself. Nor is there an allegation of any "agreement" between NET and Wingo other than the one Wingo negotiated "on behalf of Angel Food.

Because the Amended Complaint fails to allege that Defendant Wingo made any promise other than what he negotiated as an agent of Angel Food, Defendants' Motion to Dismiss the promissory estoppel claim again Defendant Wingo is due to be granted. See Fitzgerald Forest Prods., L.P. v. Durand Raute Corp. of Oregon, , 932 F. Supp. 293, 295 (M.D. Ga. 1996) (finding that plaintiffs may not seek to impose liability upon defendant where he only acted as an agent for a disclosed principal). The Complaint does not include sufficient allegations demonstrating that Defendant Wingo made any promises to NET for which he can be held personally liable.

Defendants also contend that NET's promissory estoppel claim against Angel Food must be dismissed because promissory estoppel cannot exist where there is a contract on the...

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