Joy R. Webster, Trustee v. Evans Fitness Club Express, LLC
16-01034
Bankr. S.D. Ga.Sep 28, 2017Background
- Chapter 7 trustee Joy Webster sold substantially all of Science Fitness, LLC's business assets to Evans Fitness Club Express, LLC (Express) by an asset purchase agreement (APA) that incorporated an Exhibit A equipment list.
- The APA defined "Acquired Assets" to include "furniture, furnishings, equipment, inventory, ... goods held for sale, supplies and other materials used or consumed in the Debtor's business," and stated an equipment list was attached and incorporated.
- After closing, Express removed certain items ("Disputed Items" — e.g., lockers, mirrors, TV mounts, sauna equipment, mats) that the landlord claimed were fixtures or landlord property; the Trustee asserted those items were not sold.
- Trustee moved for summary judgment seeking a declaration that the Disputed Items were excluded because they were not listed on Exhibit A; Express asserted the purchase included those items as furniture/furnishings/materials and that their bid reflected their value.
- The key unresolved factual question at summary judgment was whether the Debtor actually had a property interest in the Disputed Items and whether the APA language unambiguously excluded them.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the APA unambiguously excluded the Disputed Items because they are not listed on Exhibit A | Trustee: Acquired Assets are exclusively those items listed; items not on Exhibit A are excluded | Express: APA separately lists "furniture," "furnishings," and "materials used or consumed," so Disputed Items can be included even if not on Exhibit A | Denied — court found the language susceptible to more than one reasonable interpretation and not unambiguous in Trustee's favor |
| Whether Debtor had an ownership interest in the Disputed Items at closing | Trustee: Presupposes Debtor owned the items and thus could not sell what was not listed | Express: Contends some items were part of the sale and were treated as such at closing; affidavits show non-listed items were removed without objection | Court held a genuine factual dispute exists whether Debtor had title/interest in the Disputed Items; summary judgment inappropriate |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burden framework)
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment standard and resolving inferences)
- Marvel Enters., Inc. v. World Wrestling Fed'n Entm't, Inc., 610 S.E.2d 583 (Ga. Ct. App. 2005) (Georgia contract-construction framework)
- Amey, Inc. v. Gulf Abstract & Title, Inc., 758 F.2d 1486 (11th Cir. 1985) (resolving inferences against movant on summary judgment)
- Envision Printing, LLC v. Evans, 786 S.E.2d 250 (Ga. Ct. App. 2016) (ambiguity construed against drafter)
- DJ Mortg., LLC v. Synovus Bank, 750 S.E.2d 797 (Ga. Ct. App. 2013) (contract ambiguities and construction)
- Hertz Equip. Rental Corp. v. Evans, 397 S.E.2d 692 (Ga. 1990) (ambiguity construed against preparer)
