Rigby v. Flue-Cured Tobacco Cooperative Stabilization Corp.
327 Ga. App. 29
Ga. Ct. App.2014Background
- Plaintiffs are former Flue-Cured Tobacco Cooperative members who sold tobacco to the Tobacco Cooperative under the federal price support program.
- Cooperative operated as a nonprofit NC cooperative, administering CCC/USDA price-support flows and distributing net gains to participating growers.
- Plaintiffs paid $5 for stock; some claimed not to have received stock certificates despite records showing issuance.
- Undistributed net gains from 1967–1973 were placed into a capital reserve in 1975; Article XI stated certificates carried no dividend rights.
- In 2004, after FETRA ended the price-support program, the Cooperative invited exclusive marketing agreements; non-signatories could redeem stock or later rejoin under certain conditions.
- Trial court granted summary judgment on several counts and dismissed others; the appeal centers on membership status, stock issuance, accounting, marketing rights, profits from 1967–1973, fiduciary duty, and attorney fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs remain members under Count 1 | Plaintiffs claim bylaws require a hearing before purging membership. | Articles/Bylaws permit removal of ineligible stock without a hearing when stock holder is not an eligible member. | No hearing required; plaintiffs not eligible members, so no rights as members. |
| Whether specific performance for stock issuance was proper | Plaintiffs are entitled to stock certificates reflecting membership. | Evidence shows issuance of stock; no enforceable requirement to issue certificates; or claim time-barred. | No genuine issue on issuance; equitable claim barred by limitations; trial court correct. |
| Whether an accounting claim was proper in Georgia | Plaintiffs sought inspection/accounting under OCGA 14-3-1604. | Cooperative is a North Carolina foreign corporation; Georgia courts lack authority to compel accounting; NC statutes provide remedy. | Accounting claim not proper in Georgia; lack of forum; remedy available in NC. |
| Whether the exclusive marketing agreement formation satisfied contract elements | December 2004 letter constituted an offer; plaintiffs accepted by intending to sign. | Letter required signing an exclusive agreement; no binding contract without execution. | No binding contract; no acceptance by signing; failure to sign bars claim. |
| Whether 1967–1973 net gains omissions/time limits on counts 7–9 were error | Pro-rata shares of net gains owed; time not measured from damage but breach. | Undistributed gains placed in capital reserve 1975; debts/time limits expired; claims time-barred; fiduciary duty claims unresolved. | Counts 7 and 9 time-barred or unresolved; but fiduciary duty issue qualifies for remand; overall statute limitations apply. |
Key Cases Cited
- Haas v. Koskey, 138 Ga. App. 448 (Ga. App. 1976) (stock ownership rights without certificates)
- First Jewelers v. Rosen, 119 Ga. App. 355 (Ga. App. 1969) (ownership rights despite lack of stock certificates)
- Knight v. Dept. of Transp., 239 Ga. 368 (Ga. 1977) (equity limitations on specific performance)
- ULQ, LLC v. Meder, 293 Ga. App. 176 (Ga. App. 2008) (Georgia law on fiduciary duties to stockholders; Meder persuasive but not controlling)
- HAJMM Co. v. House of Raeford Farms, Inc., 328 N.C. 578 (N.C. 1991) (North Carolina case recognizing fiduciary duties to members under certain circumstances)
- City of Gainesville v. Dodd, 275 Ga. 834 (Ga. 2002) (discretion to remand for unresolved issues)