Textile Rubber & Chemical Co. v. Thermo-Flex Technologies, Inc.
308 Ga. App. 89
| Ga. Ct. App. | 2011Background
- Thermo-Flex sued Textile for anticipatory breach after Textile refused the final $500,000 installment and threatened to adjust future net-profit payments; Textile counterclaimed for breach of warranty based on VOCs; Mullinax and Technology Works were brought in as third-party defendants with cross-claims for tortious interference, breach of warranty, fraud, negligent misrepresentation, breach of duty to principal, and indemnity; the trial court granted Thermo-Flex summary judgment for $500,000 plus interest and granted summary judgment to Mullinax/Technology Works on several cross-claims; on remand, Textile paid the $500,000 plus interest and Thermo-Flex sought attorney fees under OCGA § 13-1-11; the trial court held the demand letter substantially complied with OCGA § 13-1-11; this Court affirmed in part and reversed in part, remanding for present value calculation of the $1.5 million installment; on remand, the trial court again granted summary judgment for attorney fees and for Mullinax/Technology Works on several cross-claims; Textile appeals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the demand letter complied with OCGA § 13-1-11. | Textile argues the letter demanded $2M too soon. | Thermo-Flex contends substantial compliance by stating face value and 10-day payment window. | Demand letter substantially complied; notice valid. |
| Whether Mullinax/Technology Works are liable on Textile's fraud and negligent misrepresentation cross-claims. | Textile argues misrepresentations were made by agents/contracting parties. | Mullinax/Technology Works had no standing to rely on warranty disclaimers. | Issues of material fact preclude summary judgment on fraud and negligent misrepresentation. |
| Whether Textile can prove breach of duty to principal with proximate causation. | Entered into contract with disclaimer to shield from liability; proximate cause exists. | Disclaimers sever causal link; no proximate cause. | Jury could find proximate cause; trial court erred in granting summary judgment. |
| Whether common law indemnity applies to Mullinax/Technology Works. | Indemnity arises from negligence imputed to others; third-party defendants liable. | Indemnity not applicable absent vicarious liability or contract. | Common law indemnity does not apply; affirmed as to this point. |
| Whether cross-claims for breach of warranty and indemnity against Mullinax/Technology Works should be dismissed. | Cross-claims should survive given disputed facts. | Disclaimers and standing defeat these cross-claims as a matter of law. | Breach of warranty and indemnity affirmed; other cross-claims unresolved. |
Key Cases Cited
- Gen. Elec. Credit Corp. of Ga. v. Brooks, 242 Ga. 109 (Ga. 1978) (notice of attorney fees may be substantial but need not match final amount precisely; substantial compliance sufficient)
- Carlos v. Murphy Warehouse Co., 166 Ga.App. 406 (Ga. Ct. App. 1983) (face value in notice governs for OCGA § 13-1-11)
- Shier v. Price, 152 Ga.App. 593 (Ga. Ct. App. 1979) (notice sufficiency; jury can fix eventual due amount)
- Kauka Farms v. Scott, 256 Ga. 642 (Ga. 1987) (amount due may be uncertain at notice; notice valid if face value stated)
- Kroger Co. v. U.S. Foodservice of Atlanta, 270 Ga.App. 525 (Ga. Ct. App. 2004) (notice can set forth face value even if later adjusted by present value)
- Yee v. Barnwell, 193 Ga.App. 820 (Ga. Ct. App. 1989) (agent reliance on contract disclaimers evaluated; not controlling here but discusses reliance)
- Potts v. UAP-GA AG CHEM, 256 Ga.App. 153 (Ga. Ct. App. 2002) (reliance usually for jury; whether reliance is reasonable questions for jury)
- Nguyen v. Lumbermens Mut. Cas. Co., 261 Ga.App. 553 (Ga. Ct. App. 2003) (indemnity analysis; common-law indemnity not available here)
- Valley View Church of God in Christ v. King, 236 Ga. 337 (Ga. 1976) (anticipatory breach accelerates maturity of indebtedness)
- Gen. Elec. Credit Corp. of Ga. v. Brooks, 242 Ga. 109 (Ga. 1978) (notice requirements for attorney fees; substantial compliance)