RD Stallion Carpets v. DORSETT INDUSTRIES
| Decision Date | 13 June 2000 |
| Docket Number | No. A00A0084.,A00A0084. |
| Parties | R.D. STALLION CARPETS, INC. v. DORSETT INDUSTRIES, L.P. |
| Court | Georgia Court of Appeals |
OPINION TEXT STARTS HERE
Minor, Bell & Neal, James H. Bisson III, Robert G. McCurry, Dalton, for appellant.
Kinney, Kemp, Sponcler, Joiner & Tharpe, L. Hugh Kemp, Dalton, Hine & Niedrach, Edward Hine, Jr., Rome, Erin M. Richarson, Conyers, for appellee.
R.D. Stallion Carpets, Inc. (Stallion) obtained a judgment against Dorsett Automotive Carpet, L.P. f/k/a DWB Holding Carpet, L.P. When Stallion attempted to collect that judgment from Dorsett Industries, L.P., the limited partnership that purchased the assets of Dorsett Automotive Carpet, the trial court granted summary judgment. In this appeal, Stallion contends that material issues of disputed fact precluded that judgment. We agree and reverse.
In reviewing the grant of summary judgment as here, we apply a de novo standard of review and consider the evidence with all reasonable inferences and conclusions in favor of the party opposing summary judgment. Gaskins v. Hand, 219 Ga.App. 823, 824, 466 S.E.2d 688 ( 1996). So viewed, the evidence established that the evolution of Dorsett Industries was convoluted. In 1992, Robert S. Goodroe was the controlling stockholder and chief executive officer of Dorsett Carpet Mills, Inc. Sometime in 1992, DWB Carpet Holdings, L.P.1 acquired Dorsett Carpet Mills from Goodroe and also acquired Whitecrest Carpet Mills, Inc., and Buck Creek Industries, Inc. Although DWB Carpet Holdings combined these three corporations, within a relatively short time period, this company spun off portions of itself and changed its name as set out below.
In April 1994, Stallion and DWB Carpet Holdings (DWB) agreed that DWB would manufacture certain carpets for Stallion. James Collins, the treasurer and chief financial officer of DWB at the time of the deal, testified that "[t]o allow Stallion to recoup its sampling costs, DWB agreed to manufacture the styles for a period of twelve months, after which the styles could be terminated with no liability to Stallion."
Dissatisfied with DWB's failure to keep the manufacturing agreement, in January 1995, Stallion submitted a chargeback to DWB. Less than a week later, DWB sold its commercial broadloom business to Whitecrest Dorsett Commercial, Inc. (Whitecrest Dorsett).2 Robert M. Painter, the controller of Dorsett Industries and formerly the controller of Dorsett Automotive Carpet, testified that "because of the Stallion claim, I notified James Collins and David Turner of the potential for further claims and chargebacks from Stallion, and the Closing Agreement with Whitecrest Dorsett was changed to insulate DWB from further claims from Stallion." On January 13, 1995, DWB finalized the sale of Whitecrest Carpet Mills to Whitecrest Dorsett. After the acquisition, Collins became chief financial officer of Whitecrest Dorsett. Notwithstanding an alleged agreement between DWB and Whitecrest Dorsett to continue running the three carpet lines for Stallion, Whitecrest Dorsett terminated the production of two of the three styles.
Summey "further informed [the president of Stallion] that pending his company's decision, all shipments to Stallion from Sunrise and its affiliates would be put on hold."
More than a month after the sale of DWB's commercial broadloom division, on February 20, 1995, the credit manager of DWB notified Stallion, as a "Dorsett Customer," that: "We are in the process of defactoring our accounts; more simply put Dorsett will be handling your account credit on a direct in-house basis starting immediately." This letter to Stallion was signed on behalf of "Dorsett Carpet Mills, Inc., Div. of DWB Carpet Holdings, L.P."; used the letterhead of "DWB Carpet Holdings"; and listed at the bottom of the page the names and addresses of: "Dorsett Automotive [illegible] Division," "Dorsett Commercial Carpet," and "Whitecrest Commercial Carpet." Dennis Cudd, the president of Stallion, testified that this letter meant that "all future payments by R.D. Stallion to Dorsett were to be made to DWB Carpet Holdings, LP rather than the factor of DWB."
Sometime in 1995, after the sale of Whitecrest Dorsett, DWB changed its name to Dorsett Automotive Carpet, L.P., a limited partnership which Goodroe organized. Painter, the controller of Dorsett Industries who had been controller of Dorsett Automotive Carpet until December 22, 1995, testified that:
After the sale of the commercial broadloom division, I continued as the Controller of DWB, although its only operating division was the automotive division. However, I also continued to monitor the claims submitted against pre-sale receivables of the commercial broadloom division, and in that capacity I again dealt with Stallion, after NationsBanc Commercial Corporation charged back $39,920.85 of Stallion accounts receivable ... on March 9, 1995. After receiving that chargeback, I notified Stallion that the chargeback was wrongfully directed at DWB, since Whitecrest Dorsett had agreed to continue the [two discontinued lines] for at least twelve (12) months from their introduction, as set forth in Exhibit E. Stallion never made any written response to my letter with enclosure of April 20, 1995, although NationsBanc Commercial Corporation refused to reverse the chargeback, and the account receivable from Stallion to DWB in the amount of $39,920.85 was written off as uncollectible on November 28, 1995....
Most of the chargeback related to expenses incurred by Stallion as a consequence of the discontinuation of the carpet lines, "Sisal Weve" and "Au Sisal." Stallion further advised on the invoice that "[f]uture claims on Au Sisal and Sisal Weve will be debited as they occur."
Seeking damages for the discontinuation of the manufacture of the two carpet types, Stallion filed suit on October 3, 1995, against Dorsett Automotive Carpet, L.P. f/k/a DWB Holding Carpet, L.P. Dorsett Automotive Carpet answered and counterclaimed. In Paragraph 2 of its counterclaim, Dorsett Automotive Carpet stated, "The defendant manufactured and sold to the plaintiff [Stallion] certain carpet." Dorsett Automotive Carpet made a demand for defense against Whitecrest Dorsett and Sunrise Carpet Industries, an affiliate of Whitecrest Dorsett.
While Stallion's lawsuit was pending against it, Dorsett Automotive Carpet entered into an asset purchase agreement with Dorsett Industries as the buyer. Goodroe testified that he was the organizer of the new limited partnership. When Dorsett Automotive Carpet sold its assets to Dorsett Industries, Goodroe signed the closing documents and was the general partner and president of the newly created Dorsett Industries, L.P.
Paragraph 2.2 of the Asset Purchase Agreement provides in part, Paragraph 1.2 defined "Assumed Liabilities" to mean:
(a) all of Seller's known or should be known debts, liabilities or obligations of any nature whatsoever, incurred in connection with Seller's automotive carpet division, including without limitation all debts, liabilities and obligations of such division for ... pending or threatened lawsuits, contracts, leases and commitments, ... and (d) all obligations of Seller to Sunrise Carpet Industries, Inc., Whitecrest-Dorsett Commercial, Inc. and their affiliates.
On November 26, 1996, Stallion obtained a judgment against Dorsett Automotive Carpet f/k/a DWB Holding Carpet in the amount of $162,340.37 plus post-judgment interest and costs. In an effort to collect that judgment, Stallion filed suit against Dorsett Industries. Dorsett Industries denied any responsibility, claiming it had no liability for a judgment entered against Dorsett Automotive Carpet.
In answering Stallion's complaint, Dorsett Industries admitted that:
On the date of Dorsett's assumption of liabilities of Dorsett Automotive, there was pending in the Superior Court of Whitfield County, Georgia a...
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