Walker v. Amerireach.Com
| Decision Date | 07 March 2011 |
| Docket Number | No. A10A1176.,A10A1176. |
| Citation | 306 Ga.App. 658,703 S.E.2d 100 |
| Parties | WALKERv.AMERIREACH.COM et al. |
| Court | Georgia Court of Appeals |
OPINION TEXT STARTS HERE
Henry A. Turner, Decatur, for appellant.Webb, Tanner, Powell, Mertz & Wilson, Robert J. Wilson, Lawrenceville, for appellees.Thurbert E. Baker, Attorney General, Isaac Byrd, Deputy Attorney General, Sidney R. Barrett, Jr., Senior Assistant Attorney General, Amy C.M. Burns, Assistant Attorney General, amici curiae.BARNES, Presiding Judge.
Carol Walker sued Amerireach.com LLC (“AmeriSciences”), a health and nutrition multilevel distribution company based in Houston, Texas, which conducts substantial business activities in Georgia, alleging violations of the Georgia Fair Business Practices Act (FBPA) and the Georgia Sale of Business Opportunities Act (SBOA). She also sued three of the company's corporate officers individually.1 The trial court granted AmeriSciences's motion for summary judgment on res judicata grounds based on a Texas court's default judgment, and granted the officers' motion to dismiss for lack of personal jurisdiction. Because Walker's complaint is based on a statutory violation and not on breach of contract, however, AmeriSciences's contractual defenses are inapplicable. Further, the trial court has personal jurisdiction over the individual defendants, who may be held liable under the SBOA. Accordingly, we reverse.
For almost three years, physician Carol Walker participated in a “marketing program” buying and selling nutritional supplements she bought from AmeriSciences. When she ended the relationship she was holding $150,000 worth of inventory. On February 5, 2009, Walker sent notice to the company that, absent a settlement, she intended to sue the company in 30 days based on its failure to disclose her right to require the company to repurchase her inventory under certain conditions, as required by OCGA § 10–1–415(d)(1) of the SBOA.
Before the expiration of Walker's 30–day statutory waiting period required by OCGA § 10–1–399(b) of the FBPA, during which she was barred from filing suit in Georgia under the FBPA, AmeriSciences filed suit in Harris County, Texas, on February 13, 2009. The company sought a declaratory judgment that Walker's FBPA action was subject to the Harris County, Texas, forum selection clause contained in the parties' contract, that the forum selection clause was enforceable, and that an action for damages filed anywhere but Harris County constituted a breach of contract. On April 7, 2009, Walker sued AmeriSciences and the individual defendants in the Superior Court of Gwinnett County under the Georgia FBPA and SBOA. She contended that the company failed to disclose her right to require the company to repurchase her unsold, unopened inventory at any time as required by Georgia law, but instead represented in her contract and elsewhere that AmeriSciences would only repurchase her inventory within 30 days after she bought it.
AmeriSciences answered and denied liability, asserting among other things that Walker's claims were compulsory counterclaims that should have been raised in the Texas action and could not be asserted in a separate Georgia case. In a motion to dismiss, AmeriSciences also argued that the parties' contract contained an enforceable forum selection clause establishing venue in Harris County, Texas, and raised arguments regarding reliance, statute of limitation, and personal jurisdiction regarding the individual defendants.
On July 20, 2009, AmeriSciences amended its motion to dismiss and moved in the alternative for summary judgment, arguing that Walker's claims were now res judicata because on June 3, 2009, the Texas court had granted it a default judgment in its declaratory action.2 AmeriSciences argued in its amended motion that the Texas default judgment was entitled to full faith and credit, and thus its conclusions “must be given preclusive effect.” Those conclusions were that any suit Walker brought against AmeriSciences was subject to the forum selection clause, and that filing an action in any forum other than Harris County, Texas, constituted a breach of contract. After a hearing, the Georgia trial court granted summary judgment to AmeriSciences on several grounds and dismissed the claim against the officers for lack of personal jurisdiction. In a very detailed 22–page order drafted by counsel for AmeriSciences, the trial court concluded that Walker's claims were subject to the contract's forum selection clause and thus barred by res judicata; that Walker failed to show reliance and damages from any SBOA violation; and that the court lacked personal jurisdiction over the personal defendants, who were not in any event subject to personal liability under the SBOA. Walker appeals, arguing the trial court erred in each of these findings.3
1. Walker contends the trial court erred in holding that her claims were subject to the contract's forum selection clause and thus barred by res judicata because of the Texas default judgment. AmeriSciences argues that the parties would have no relationship absent their written contract, and that the forum selection clause applies to all claims “arising from” or “relating to” the parties' agreement. In this regard, AmeriSciences argues that well-established principles of Georgia law mandate that the forum selection clause at issue be enforced. Moreover, it also correctly points out that the FBPA does not expressly provide that Georgia courts have exclusive, original jurisdiction over claims for alleged violations of the SBOA.
While all of AmeriSciences's claims are correct as far as they go, FBPA claims are not contract claims. In an amicus brief, the administrator of the Georgia FBPA notes our holding that “the [FBPA] itself is in no way tied to contractual rights and is wholly self-sustaining....” Attaway v. Tom's Auto Sales, 144 Ga.App. 813, 242 S.E.2d 740 (1978). In reaffirming and expanding this holding, we noted that in Attaway
we held that when an action is brought for violation of the FBPA, contractual defenses are irrelevant and inapplicable. The same principle applies here, and we hold that contractual defenses are inapplicable when an action is based not on the contract but solely on an alleged violation of the Sale of Business Opportunities Act.
Hornsby v. Phillips, 190 Ga.App. 335, 340(4), 378 S.E.2d 870 (1989). The purpose of the SBOA is, among others, “to prevent and prohibit fraudulent and deceptive practices in the sale of business opportunities.”(Punctuation omitted.) Id. at 338(2), 378 S.E.2d 870. The FBPA “creates a separate and distinct cause of action, independent of other theories of recovery an injured party might have.” Hill v. Jay Pontiac, 191 Ga.App. 258, 259(2), 381 S.E.2d 417 (1989).
We have also reversed a trial court's dismissal of a complaint alleging that a company violated Georgia's debt adjustment statutes, OCGA § 18–5–1 et seq. Moon v. CSA–Credit Solutions of America, 304 Ga.App. 555, 696 S.E.2d 486 (2010) (physical precedent only). In Moon, the trial court dismissed the complaint based on a forum selection clause in the parties' contract. Although not all of the judges on the panel agreed on the reasoning and thus the case is physical precedent only, the special concurrence in Moon reasoned that, because the complaint asserted a cause of action based upon a violation of the debt adjustment statutes, not a breach of contract claim, the contract's choice of forum provision did not apply.
The four corners of Walker's complaint reveal that her claims are not based on breach of contract but instead are based on violation of the SBOA. Thus the contractual defense of a forum selection clause does not apply, and Walker's claims are not res judicata based on the default judgment from Harris County, Texas.
2. Walker argues the trial court erred in holding that she failed to allege she sustained damages due to AmeriSciences's failure to inform her of her buy-back rights under the SBOA. AmeriSciences's contract with Walker stated that upon termination of their business relationship, she had the right to return for repurchase marketable inventory within one month from her date of purchase. The SBOA provides, however, that a participant in a...
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