318 Ga. App. 655
Ga. Ct. App.2012Background
- EZ Green and Georgia-Pacific had a 2003 contract, revised 2004, granting EZ Green a license to its grass seed system for five years.
- Koch Cellulose purchased Georgia-Pacific’s pulp division in May 2004, acquiring the EZ Green agreement assets.
- EZ Green alleged breach for failure to act with commercially reasonable efforts to develop, manufacture, market, sell, and distribute the product.
- EZ Green sought damages, statutory penalties, and attorney fees; Georgia-Pacific moved for summary judgment on multiple grounds.
- The trial court granted partial summary judgment to Georgia-Pacific, finding no material fact on commercially reasonable efforts and on the right to cease production; the court also denied EZ Green’s motion for partial summary judgment.
- On appeal, the Georgia Court of Appeals reversed the summary judgment for Georgia-Pacific, affirmed denial of EZ Green’s partial summary judgment, and upheld the privilege-log ruling.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Georgia-Pacific breached by not using commercially reasonable efforts | EZ Green argues lack of commercially reasonable efforts | Georgia-Pacific asserts it met the standard or that facts are disputed | Fact questions preclude summary judgment; issues for trial |
| Whether Georgia-Pacific could unilaterally cease production without breaching | Cessation violated the contract’s terms and EZ Green’s termination rights | Ceasing production was within rights given by contract if conditions occurred | Material facts conflict;, trial needed; not entitled to summary judgment |
| Whether the trial court erred in denying EZ Green’s partial summary judgment | EZ Green seeks adjudication of Georgia-Pacific’s liability | Disputed evidence precludes ruling in EZ Green’s favor | Reasonable factual disputes require reversal of grant of summary judgment |
| Whether the discovery/privilege-log ruling was an abuse of discretion | Georgia-Pacific should be compelled to provide a privilege log | No obligation to supplement or log due to record-keeping | EZ Green failed to provide record citations; issue not considered |
| Whether applicable standards of ‘commercially reasonable’ are controlled by Georgia law | Georgia law provides a reasonable commercial standard; misapplied foreign law | Foreign-law approaches were appropriate but disputed | Georgia law governs; summary judgment improper given conflicts |
Key Cases Cited
- Kansas Penn Gaming v. HV Properties, 727 F. Supp. 2d 1100 (D. Kan. 2010) (commercially reasonable efforts require overall reasonableness)
- Hansford v. Burns, 241 Ga. App. 407 (Ga. App. 1999) (good faith and reasonable commercial standards of fair dealing)
- Tifton Bank & Trust Co. v. Knight’s Furniture Co., 215 Ga. App. 471 (Ga. App. 1994) (reasonable commercial standards; issue of fact for jury)
- Pakwood Indus. v. John Galt Assoc., 219 Ga. App. 527 (Ga. App. 1995) (guaranty requirements commercially reasonable given financial context)
- Winterchase Townhomes v. Koether, 193 Ga. App. 161 (Ga. App. 1989) (cannot cancel a contract when the asserting party’s rights are not the grantor’s)
- Swift Textiles, Inc. v. Lawson, 135 Ga. App. 799 (Ga. App. 1975) (difficulty or hardship does not excuse performance)
- Crooks v. Chapman Co., 124 Ga. App. 718 (Ga. App. 1971) (good faith implied obligation in contract actions)
- Roberts v. Connell, 312 Ga. App. 515 (Ga. App. 2011) (summary-judgment standard and de novo review)