RIGBY Et Al. v. FLUE-CURED TOBACCO COOPERATIVE STABILIZATION CORPORATION
339 Ga. App. 558
Ga. Ct. App.2016Background
- The Flue-Cured Tobacco Cooperative Stabilization Corporation (now U.S. Tobacco Cooperative Inc.) is a North Carolina nonprofit cooperative formed to market flue-cured tobacco; Georgia-resident farmers (Appellants) paid $5 for membership stock and sold varying portions of their crops through the Cooperative.
- In 2004 the Cooperative began a cigarette-manufacturing/marketing venture and offered exclusive marketing agreements for 2005; farmers who declined were removed as eligible members and offered stock redemption.
- Appellants sued in 2007 asserting numerous claims (accounting, distribution of retained earnings, contract claims, and later a breach of fiduciary duty added in 2012); earlier appeal affirmed most adverse rulings but reversed dismissal of the fiduciary claim and related attorney-fees issue for further fact development.
- After additional discovery the Cooperative moved for summary judgment on the breach of fiduciary claim and related attorney-fees claim; the trial court held Georgia law applied and foreclosed the fiduciary claim, and alternatively that North Carolina law would also foreclose it; it also ruled the claim was time-barred but did not decide that issue given its other holdings.
- On this appeal the Court of Appeals reviews de novo, finds no evidence that Appellants reposed the special confidence required for a fiduciary relationship under North Carolina law, and affirms summary judgment for the Cooperative, also rejecting the related attorney-fees claim because no underlying relief was obtained.
Issues
| Issue | Rigby et al. (Plaintiffs) | Cooperative (Defendant) | Held |
|---|---|---|---|
| Choice of law for fiduciary claim | North Carolina law governs (internal affairs / corporate governance) | Georgia lex loci delicti governs because injuries occurred in Georgia | Court assumed NC law for argument but concluded summary judgment appropriate under NC law; trial court’s Georgia-law choice not challenged on outcome |
| Existence of fiduciary relationship | A fiduciary arose from farmers’ dependence on Cooperative as outlet and from Cooperative’s control of marketing/retained gains | No special confidence/superiority was reposed; ordinary membership/business relationship not a fiduciary relationship | No fiduciary relationship as a matter of fact under NC law; summary judgment affirmed |
| Timeliness/statute of limitations | Breach of fiduciary claim relates back to original complaint and is timely | Claim barred by Georgia statute of limitations | Court did not decide statute issue because summary judgment on merits was dispositive |
| Attorney fees under OCGA § 13-6-11 | Fee claim is proper if underlying fiduciary claim succeeds | Fees not recoverable absent success on substantive claim | Denied: fees require recovery on underlying claim; no recovery, so fees fail |
Key Cases Cited
- Rigby v. Flue-Cured Tobacco Coop. Stabilization Corp., 327 Ga. App. 29 (prior appellate decision addressing other claims) (remanded fiduciary claim for further discovery)
- Bullard v. MRA Holding, LLC, 292 Ga. 748 (choice-of-law / lex loci delicti rule in Georgia tort cases)
- Dalton v. Camp, 353 N.C. 647 (NC rule that a fiduciary relationship is prerequisite to breach of fiduciary-duty claim)
- Dallaire v. Bank of Am., N.A., 367 N.C. 363 (requiring special confidence reposed to establish fiduciary relationship under NC law)
- United Cos. Lending Corp. v. Peacock, 267 Ga. 145 (attorney-fees under OCGA § 13-6-11 require recovery on underlying claim)