Shiho Seki v. Groupon, Inc.

• Citation: 775 S.E.2d 776,333 Ga.App. 319
• Decision Date: 16 July 2015
• Docket Number: No. A15A0586.,A15A0586.
• Parties: SHIHO SEKI v. GROUPON, INC.
• Court: United States Court of Appeals (Georgia)

333 Ga.App. 319

775 S.E.2d 776

SHIHO SEKI

v.GROUPON, INC.

No. A15A0586.

Court of Appeals of Georgia.

July 16, 2015.

Mitchell & Shapiro, William Rockwell Joiner, Atlanta, for Appellant.

Weinberg, Wheeler, Hudgins, Gunn & Dial, Alan Michael Maxwell, Atlanta, for Appellee.

Opinion

McMILLIAN, Judge.

Shiho Seki d/b/a Magical Adventures Balloon Rides (“Magical Adventures”)¹ appeals from the trial court's grant of summary judgment on her claims for breach of contract, tortious interference with contractual relations,² and invasion of privacy through misappropriation against Groupon, Inc. For the reasons that follow, we affirm the trial court's order as to the breach of contract and tortious interference with contractual relations claims, but reverse the grant of summary judgment on the claim of invasion of privacy through misappropriation.

Summary judgment is appropriate when no genuine issues of material fact remain and the movant is entitled to judgment as a matter of law. On appeal, we review the grant or denial of summary judgment de novo, construing the evidence and all inferences in a light most favorable to the nonmoving party.

(Citation omitted.) LeCroy v. Bragg, 319 Ga.App. 884, 885(1), 739 S.E.2d 1 (2013).

So viewed, the pertinent facts are as follows. Seki is a sole proprietor operating a hot air balloon ride business in the Temecula Valley region of California under the registered trade name, “Magical Adventures Balloon Rides.” Groupon, Inc. is an online marketplace engaged in offering daily promotions whereby customers purchase discount price vouchers redeemable by Groupon's vendors. Magical Adventures and other providers of hot air balloon rides in the Temecula Valley entered into an oral agreement that they would not advertise with Groupon or similar online marketers. In addition, the written bylaws of the Temecula Valley Balloon Association prohibits its members, which includes Magical Adventures, from contracting with Groupon without preapproval.

In September 2012, Groupon had a business relationship with Sportations, a Georgia business that agreed to provide Groupon's customers with hot air balloon rides for the designated price of $139 per voucher. Groupon marketed and sold 25 vouchers for hot air balloon rides through its Internet campaign with Sportations. Several months later, however, Groupon ended its business relationship with Sportations. At that time, 18 of the 25 purchased Sportations vouchers had not yet been redeemed.

Groupon, which had made numerous unsuccessful vendor solicitations to Magical Adventures, requested that it honor the unredeemed Sportations vouchers in exchange for the payment of $150 per voucher. Magical Adventures agreed to do so and signed a “Declaration,” the substance of which, although not technically accurate, provided:

I, [Shiho Seki, authorized representative of Magical Adventures,] contracted with Sportations to provide these services to customers who purchased Groupon vouchers at the price of $150.00.... I agree to provide the same services, at the same price, to customers who present me with Groupon vouchers.

Groupon informed Magical Adventures that “[t]o facilitate the process [of the provider change], we will notify our customers to contact you directly and follow any specific instructions and systems you have for scheduling your services. Please provide us your reservation contact information (phone, email, website, etc.) when you reply to this email.” Magical Adventures informed Groupon that it “prefer[red] that the customers call [it] directly” and provided a phone number.

Groupon subsequently sent e-mails to the 18 individuals holding the outstanding Sportations vouchers notifying them that their “reservations will now have to be made directly through Magical Adventure Balloon Rides” and providing them with Magical Adventures's telephone number and website. Additionally, Groupon updated the Sportations “deal page” on its website to substitute Magical Adventures's trade name and telephone number for that of Sportations's.³

Sometime thereafter, Groupon contacted the operator of D & D Ballooning, one of Magical Adventures's competitors, and informed him that Magical Adventures had been advertising in a Groupon campaign. Based upon this conversation and Groupon's website containing Magical Adventures's name and likeness, the operator of D & D assumed that Magical Adventures had breached their oral agreement and, despite having previously declined Groupon's offers to advertise (citing the standing agreement between the providers), he agreed to contract with Groupon “in order to maintain competition.”

Magical Adventures contacted Groupon and asserted that its act of publishing Magical Adventures's name, brand, and likeness on its website and printable vouchers was unauthorized and demanded that they be removed. Magical Adventures alleges that Groupon refused to remove the publication and, as a direct result, an Internet search for “Magical Adventures Balloon Rides” resulted in a higher position for Groupon's website than for its own.

Magical Adventures further alleges that, during this same time period, its revenues decreased by $139,817.02, and that the revenues rebounded after its name was eventually removed from Groupon's website. It submitted the affidavits of two potential customers who asserted that they specifically researched Magical Adventures's online reviews and, based on the positive feedback, sought to purchase a balloon ride from Magical Adventures. During the searches, they discovered what they believed to be a Groupon campaign advertising Magical Adventures balloon rides. After going to Groupon's website, however, they learned that the Magical Adventure's campaign had expired, and that Groupon offered balloon rides from other vendors for a lesser price. Both customers ultimately purchased balloon rides through Groupon.

Magical Adventures thereafter filed suit against the company alleging breach of contract, tortious interference with business/contractual relations, and invasion of privacy through misappropriation, among other claims. Groupon successfully moved for summary judgment, and this appeal followed.

1. Magical Adventures contends that the trial court erred in granting summary judgment to Groupon on its claim for breach of contract. In the complaint, Magical Adventures alleged that it had entered into an enforceable contract with Groupon pursuant to which Groupon agreed to pay it $150 for each Sportations voucher honored and that Groupon failed to tender payment pursuant to that agreement.

The record belies Magical Adventures's claim. At the time of the proceedings, 15 of the 18 outstanding customer vouchers had been redeemed and honored by Magical Adventures. As admitted by Magical Adventures, Groupon tendered payment for the seven redeemed vouchers for which Magical Adventures submitted a written request, and Magical Adventures did not request payment for the remaining eight. Nevertheless, it is undisputed that Groupon repeatedly attempted to pay Magical Adventures for the remaining eight vouchers and Magical Adventures refused tender.

Under Georgia law, “[t]he elements of a right to recover for a breach of contract are the breach and the resultant damages to the party who has the right to complain about the contract being broken.” (Citation and punctuation omitted.) Budget Rent–A–Car of Atlanta, Inc. v. Webb, 220 Ga.App. 278, 279(1), 469 S.E.2d 712 (1996). Accord UWork.com, Inc. v. Paragon Technologies, Inc., 321 Ga.App. 584, 590(1), 740 S.E.2d 887 (2013). “A breach occurs if a contracting party repudiates or renounces liability under the contract; fails to perform the engagement as specified in the contract; or does some act that renders performance impossible.” UWork.com, Inc., 321 Ga.App. at 590(1), 740 S.E.2d 887. And “[a] tender properly made is the equivalent of performance.” Anderson v. Barron, 208 Ga. 785, 793(2), 69 S.E.2d 874 (1952) ; see B–X Corp. v. Jeter, 210 Ga. 250, 255(2), 78 S.E.2d 790 (1953) (“Tender, when made or waived, satisfies the requirement for payment.”).

Contrary to Magical Adventures's allegation that Groupon failed to pay it the monies owed for the Sportations vouchers that it had honored, the undisputed record establishes that Groupon paid or attempted to pay for each of the redeemed vouchers. It follows that Magical Adventures has failed to establish a breach of the contract, and the trial court did not err in granting summary judgment to Groupon on this claim.

2. Magical Adventures further argues that the trial court erred in granting summary judgment to Groupon on its claim for tortious interference with contractual relations. The premise of this claim is Magical Adventures's assertion that Groupon's use of its name and likeness on Groupon's website induced D & D to breach their oral contract to refrain from engaging in Groupon advertising and, further, induced Magical Adventures's breach of the Temecula Valley Balloon Association bylaws prohibiting the same without prior approval.

To succeed on a tortious interference with contractual relations claim,

a plaintiff must show that a defendant: (1) acted improperly or wrongfully and without privilege; (2) acted purposely, with malice, and with the intent to injure; (3) induced a third party to breach a contract with the plaintiff; and (4) caused plaintiff financial injury.

Medlin v. Morganstern, 268 Ga.App. 116, 119(a), 601 S.E.2d 359 (2004).

(a) Although we see several potential problems with Magical Adventures and D & D's agreement to refrain from contracting with Groupon,⁴ we need go no further than recognizing that Magical Adventures has failed to come forward with evidence sufficient to establish a causal connection between its alleged decrease in revenue and D & D's alleged breach so as to establish damages. Since evidence of damages is an essential element of a claim for tortious interference with contractual relations, the trial court correctly determined that...