Elavon, Inc. v. Wachovia Bank, National Ass'n
841 F. Supp. 2d 1298
N.D. Ga.2011Background
- Plaintiff Elavon provided merchant processing services to Wachovia Bank customers under an Alliance Agreement, amended in 2008 to extend termination to 2012.
- Wachovia Bank and Wachovia Corporation later merged into Wells Fargo entities during 2008-2009, with Wells Fargo ultimately surviving the merger.
- Wells Fargo acquired Wachovia amid broader 2008 banking crisis; Wells Fargo and Wachovia anticipated their merger during the Alliance Agreement term.
- Wachovia sent a December 29, 2008 letter stating intent to cancel the Alliance Agreement effective December 31, 2008, subject to the merger.
- Elavon asserted the Alliance Agreement remained in effect and that Wachovia/Wells Fargo breached by ceasing referrals and payments; Wells Fargo pursued its own processing arrangements.
- The court granted Elavon partial summary judgment, denying Defendants’ summary judgment motion, and held issues on breach, referrals, and damages unresolved in part.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Impossibility/impracticability defense viability | Elavon | Wachovia/Wells Fargo | Impossibility/impracticability defeated; not a basis to excuse performance |
| Force majeure applicability | Elavon | Wachovia/Wells Fargo | Force majeure not applicable to excuse performance |
| EESA §126(c) unenforceability defense | Elavon | Wachovia/Wells Fargo | EESA §126(c) defense failed; not an “other agreement” affecting merger |
| Anticipatory repudiation by Wachovia/Wells Fargo | Elavon | Wachovia/Wells Fargo | Anticipatory repudiation established; Elavon discharged from duties |
| Whether Defendants breached by failing to honor referral obligations and lost profits | Elavon | Wachovia/Wells Fargo | Issues of liability for referrals and lost profits unresolved; summary judgment denied in part |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (summary judgment standard and moving party's burden)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (materiality and genuine dispute for summary judgment)
- Ellis v. England, 432 F.3d 1321 (11th Cir. 2005) (unpleaded or unsupported factual allegations insufficient to defeat summary judgment)
- ADP-Fin. Computer Sews., Inc. v. First Nat’l Bank of Cobb Cnty., 703 F.2d 1261 (11th Cir. 1983) (liquidated damages require clear manifestation of intent)
- Molly Pitcher Canning Co. v. Cent. of Ga. Ry. Co., 149 Ga.App. 5 (Ga. Ct. App. 1979) (lost profits require reasonably accurate computation)
- Witty v. McNeal Agency, Inc., 239 Ga.App. 554 (Ga. Ct. App. 1999) (lost profits shown by past earnings with reasonable certainty)
- Textile Rubber & Chem. Co. v. Thermo-Flex Techs., Inc., 301 Ga.App. 491 (Ga. Ct. App. 2009) (anticipatory repudiation concepts under Georgia law)
- Wachovia Corp. v. Citigroup, Inc., 634 F. Supp. 2d 445 (S.D.N.Y. 2009) (interpretation of ‘other agreements’ under EESA §126(c))
- Felder v. Oldham, 199 Ga. 820 (Ga. 1945) (act of war not act of God; foreseeability in contract drafting)