Julian A. Rigby, Terry Altman, Elton Carter, Byron Carter, David H. Lee, and Bryan Aldridge (collectively, “the Plaintiffs”) are tobacco farmers who were members of and sold their tobacco to Flue-Cured Tobacco Cooperative Stabilization Corporation, now known as the United States Tobacco Cooperative, Inc. (the “Tobacco Cooperative”).
Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. A de novo standard of review applies to an appeal from a [grant or] denial of summary judgment, and we view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant.
(Citations and footnote omitted.) GEICO Gen. Ins. Co. v. Wright,
So viewed, the evidence shows that the Tobacco Cooperative, a nonprofit agricultural cooperative association, was organized in 1946 under North Carolina law for the purpose of engaging in business activities related to the marketing, selling, and distribution of flue-cured tobacco. Article VI of the Tobacco Cooperative’s Articles of Incorporation (“Article VI”) provides that common stock in the Tobacco Cooperative “may be purchased, owned or held by producers who shall patronize the corporation in accordance with uniform terms and conditions prescribed thereby and only such persons shall be regarded as eligible members of the corporation.” Article VI also provides that no dividends shall be paid upon the common stock.
Among the Tobacco Cooperative’s activities, it administered the federal minimum price support program offered to flue-cured tobacco farmers within portions of the Southeastern United States, including Georgia. The Tobacco Cooperative worked through the Commodity Credit Corporation (“CCC”) and the United States Department of Agriculture
In brief, the USDA annually set the minimum price for flue-cured tobacco, and the payment for tobacco was funded through loans that the Tobacco Cooperative received from the CCC. The Tobacco Cooperative used the loans to purchase eligible tobacco that served as collateral for the CCC loans. The Tobacco Cooperative then processed and stored the tobacco, and later attempted to resell it at a price sufficient to repay or reduce the CCC loans. When the Tobacco Cooperative realized more from the sale of a particular tobacco crop than necessary to repay the CCC loans and recover its costs, the tobacco growers who produced that particular crop received a portion of the surplus, or net gain. When the proceeds from the sale of a particular crop were insufficient to repay the CCC loans, however, the losses were absorbed by the federal government.
The Plaintiffs, all flue-cured tobacco farmers, applied for and received the Tobacco Cooperative stock in exchange for a $5 capital contribution. In particular, the Tobacco Cooperative records show that Rigby applied for and received a share of common stock in 1982; Altman in 1979; Elton Carter in 1955; Byron Carter in 1993; Lee in 1970; and Aldridge in 1993. Rigby and Byron Carter testified, however, that they did not actually receive their certificates reflecting the purchase of common stock.
The Plaintiffs sold tobacco to the Tobacco Cooperative from time to time as part of the minimum federal price support program. Specifically, between 1967 and 1973, Rigby, Lee, and Elton Carter sold tobacco to the Tobacco Cooperative as a part of the federal minimum price support program. During these years, and for only these years, the Tobacco Cooperative realized a net gain from the tobacco it sold. The Tobacco Cooperative distributed a portion of the net gain to farmers, including $291.15 to Elton Carter and $6.40 to Lee, and issued certificates of interest to the farmers for the undistributed portion of the net gain, which was valued at approximately $26.8 million. In 1975, the Tobacco Cooperative’s board of directors set aside the undistributed net gain into its capital reserve, and it notified members of the decision through a newsletter. As provided by Article XI of the Tobacco Cooperative’s Articles of Incorporation, as amended, (“Article XI”) the certificates of interest “carry no rights of dividend, interest or other income or appreciation,” and the certificates are redeemable “only upon such terms and at such times as may be determined from time to time by the Board of Directors.” Furthermore, Article XI provided that the “death, withdrawal or expulsion of a member shall not give rise to any right to receive any payment from the capital reserve [.]”
The evidence shows that most of the Plaintiffs stopped patronizing the Tobacco Cooperative by 2001. Altman deposed that he stopped selling tobacco to the Tobacco Cooperative sometime in 2003 or 2004.
In 2004, the federal government ended the minimum price support program with passage of the Fair and Equitable Tobacco Reform Act of 2004 (“FETRA”). Around the same time, the Tobacco Cooperative bought a processing and manufacturing facility and entered into an agreement to supply a third party who would distribute cigarettes under a brand to be developed by the Tobacco Cooperative. In December 2004, the Tobacco Cooperative sent a letter to flue-cured tobacco farmers informing them that it would be manufacturing cigarettes and offering farmers the opportunity to enter into an exclusive marketing agreement with the Tobacco Cooperative. The letter instructed farmers that only persons or entities that signed the exclusive marketing agreement
if you elect not to retain your membership for 2005, you would not be precluded from becoming a member in a subsequent year. As long as this proposed program continues, [the Tobacco Cooperative] membership will be open to all former tobacco farmers who are willing to sign an exclusive agreement with [the Tobacco Cooperative] and abide by the uniform terms and conditions set forth in the marketing agreement.
In 2007, the Plaintiffs filed their initial complaint against the Tobacco Cooperative, alleging that they were entitled to: an accounting of the Tobacco Cooperative’s capital account and contributions made by the Plaintiffs (Count 1); a distribution of reserved capital (Count 2); and specific performance to reinstate them as members of the cooperative by issuing their respective stock certificates (Count 3). The Plaintiffs also raised claims of breach of contract for denying the Plaintiffs the opportunity to enter into exclusive marketing agreements with the Tobacco Cooperative (Count 4); breach of fiduciary duty against the Tobacco Cooperative’s director (Count 5); and for attorney fees (Count 6).
Count 5 was subsequently dismissed pursuant to the parties’ joint stipulation. Thereafter, in an order dated June 15,2012, the trial court granted summary judgment to the Tobacco Cooperative on Counts 2, 4, 5, and 6.
In an order dated October 18, 2012, the trial court dismissed Count 1 to the extent it sought a declaration that the Tobacco Cooperative’s corporate reserves belonged to the Plaintiffs or that such reserves should be paid to the Plaintiffs. The trial court also dismissed Count 9 on the grounds that the Tobacco Cooperative did not owe a fiduciary duty to its shareholders or members. The trial court subsequently granted summary judgment to the Tobacco Cooperative on the remaining claims and denied the Plaintiffs’ motion for partial summary judgment. In granting summary judgment to the Tobacco Cooperative, the trial court found that: the court was not the proper forum to assert an accounting claim (Count 1); the Tobacco Cooperative was entitled to summary judgment on the Plaintiffs’ prayer for declaratory judgment (Count 1) because the Plaintiffs were no longer members of the Tobacco Cooperative due to their own decision not to patronize the cooperative; the Plaintiffs were issued a share of stock and, therefore, the Tobacco Cooperative was entitled to summary judgment on the claim for specific performance (Count 3); and the Plaintiffs’ claims for breach of contract, conversion, and money had and received for failing to pay profits for the years 1967 through 1973 (Count 7) were time-barred.
1. The Plaintiffs contend that the trial court erred in granting summary judgment
There is no dispute that in 2003, the Tobacco Cooperative purged inactive members from its membership rolls, and that it did so without a hearing. In support of their argument that they were entitled to a hearing before being purged from the membership roll, the Plaintiffs rely upon Article X of the Tobacco Cooperative’s bylaws, which is virtually identical to Article VI of the cooperative’s Articles of Incorporation. Those provisions provided that common stock
may be purchased, owned or held by producers who shall patronize the corporation in accordance with uniform terms and conditions prescribed thereby and only such persons shall be regarded as eligible members of the corporation. In the event the board of directors of the corporation shall find following a hearing that any of the common stock has come into the hands of any person who is not an eligible member, or that the holder thereof has ceased to be an eligible member, such person shall have no rights or privileges on account of such stock or vote or voice in the management or affairs of the corporation . . . and the corporation shall have the right (a) to purchase such stock at its book or par value, whichever is less, as determined by the board of directors..., and on the failure of the holder to deliver the certificate or certificates evidencing such stock, the corporation may cancel the same on its books, or (b) to require the transfer of any stock at such book or par value to any person eligible to hold the same and on the failure of the holder to deliver the certificate or certificates evidencing such stock, the corporation may cancel the same on its books and issue a new certificate or certificates in lieu thereof to any such person.
(Emphasis supplied.)
Contrary to the Plaintiffs’ reading of these provisions, the plain language provides that the Tobacco Cooperative is only required to hold a hearing for the purposes of determining whether common stock is held by an eligible member so that, in the event the stock is not, the board of directors has the right to purchase or transfer the stock held by an ineligible member. By the unambiguous terms of Article VI of the Articles of Incorporation and Article X of the Bylaws, the Plaintiffs were not to be regarded as eligible members of the Tobacco Cooperative because they did not patronize the corporation. There is no evidence that the Tobacco Cooperative has attempted to purchase or transfer any stock belonging to these inactive members. Therefore, the Tobacco Cooperative was not required to hold a hearing, and the Plaintiffs’ claim on this ground fails.
2. The Plaintiffs also contend that the trial court erred in granting summary judgment on their claim for specific performance because the Tobacco Cooperative’s bylaws require that each member be issued a stock certificate, they presented evidence that they did not receive the common stock certificate for which they paid, and the issuance of a stock certificate would reflect their membership status. We disagree.
As a preliminary matter, the Plaintiffs do not challenge the Tobacco Cooperative’s records showing that they applied and paid $5 for a share of common stock. Instead, Rigby, Byron Carter, Elton Carter, and Lee claim that they did not actually receive the stock. Upon examining their testimony, however, Rigby and Byron Carter testified only that they did not receive the stock certificates. Elton Carter, through his wife Donna Carter, testified that he received the stock certificates. Lee similarly testified that stock certificates were issued, although he did not know where his were located.
Although Rigby and Byron Carter presented evidence that they did not receive a stock certificate, they presented no evidence to refute the Tobacco Cooperative’s evidence that they were actually issued common
Even if the issuance of stock certificates was a question of fact, we may nevertheless affirm the trial court’s grant of summary judgment if it is right for any reason, whether stated or unstated, so long as the legal basis was fairly presented in the court below. See Ga.-Pacific v. Fields,
The Tobacco Cooperative argued before the trial court that the Plaintiffs’ specific performance claim was time barred under the statute of limitation. While the statute of limitation for simple contracts is six years, see OCGA § 9-3-24, the statute of limitation for equity suits, such as a claim for specific performance, is seven years.
3. The Plaintiffs also contend that the trial court erred in concluding that it was not the proper forum for a claim for accounting. Specifically, the Plaintiffs argue that the Tobacco Cooperative’s bylaws authorize members to inspect the corporation’s records. The Plaintiff’s claims are without merit.
Under OCGA § 14-3-1604 (a),
[i]f a corporation does not allow a member who complies with subsection (b) of Code Section 14-3-1602[6 ] to inspect and copy any records required by that subsection to be available for inspection, the superior court may summarily order inspection and copying of the records demanded at the corporation’s expense upon application of the member.
A “corporation” is defined as “a [nonprofit] corporation, other than a foreign corporation, incorporated under or subject to the provisions of this chapter.” OCGA § 14-3-140 (6); see also OCGA § 14-2-140 (4) (similarly providing that a for-profit corporation does not include a foreign corporation). It is undisputed that the Tobacco Cooperative is a foreign corporation organized under North Carolina
Moreover, an equitable claim for accounting will not lie where an adequate remedy is available at law. See Faircloth v. A.L. Williams & Assoc., Inc.,
4. Plaintiffs Rigby and Aldridge contend that the trial court erred in granting summary judgment on their breach of contract claim based upon the allegation that the Tobacco Cooperative denied them the opportunity to sell tobacco despite their election to enter into an exclusive agreement. We disagree.
As noted by the trial court, there is no evidence that Rigby and Aldridge entered into an exclusive agreement with the Tobacco Cooperative. Notably, Rigby testified that he responded to the Tobacco Cooperative’s December 2004 letter regarding the ability to enter into an exclusive marketing agreement by completing a form letter expressing his interest in entering into such an agreement. Rigby did not actually sign the exclusive agreement, however, but claims that the Tobacco Cooperative refused to enter into a contract with him because he had a receiving station for a major tobacco company. Aldridge testified that when the federal price support program ended in 2004, he did not consider selling to the Tobacco Cooperative because he thought it was a “thing of the past.” Aldridge further stated that it was not until 2008 or 2009 that he completed an application to enter into an exclusive agreement with the Tobacco Cooperative, but nothing ever materialized.
While Rigby and Aldridge argue that the Tobacco Cooperative’s December 2004 letter constituted an offer and that they accepted the offer, the letter provides that farmers are required to sign the exclusive agreement. An “offer must be accepted in the manner specified by it; and if it calls for a promise, then a promise must be made; or if it calls for an act, it can be accepted only by the doing of the act.” (Citation and punctuation omitted.) Moreno v. Strickland,
5. The Plaintiffs also contend that the trial court erred in concluding that the applicable statutes of limitation barred their claims for breach of contract, conversion, and money had and received arising from the Tobacco Cooperative’s failure to pay all amounts owed to them for the sale of tobacco from 1967 to 1973 (Count 7). We disagree.
Since Rigby, Elton Carter, and Lee were the only plaintiffs who sold tobacco to the Tobacco Cooperative from 1967 to 1973, these claims apply only to these plaintiffs.
(a) Breach of Contract
Plaintiffs Rigby, Elton Carter, and Lee argue that the Tobacco Cooperative was required to pay them a pro-rata share of the
in addition to the amount paid to the grower upon delivery of tobacco, [the Tobacco Cooperative] will distribute to him his pro-rata share of any net gains remaining after payment of operating and maintenance costs and expenses and a reasonable deduction for reserves as determined by the Board of Directors.
(Emphasis supplied.)
In this case, it is undisputed that the Tobacco Cooperative only realized net gains for crop years 1967 through 1973. It is further undisputed that the Tobacco Cooperative paid farmers a portion of the net gains for those years and, in 1975, set aside the remainder into a capital reserve. Contrary to the Plaintiffs’ arguments, “the statute of limitation runs from the time the contract is broken rather than from the time the actual damage results or is ascertained.” (Footnote omitted.) Hamburger v. PFM Capital Mgmt.,
Based upon the unambiguous language in the agreement as set forth above, there were no remaining net gains after the Tobacco Cooperative placed the undistributed net gains from 1967 to 1973 into a capital reserve. The farmers’ claims that they were entitled to an additional pro-rata share of the undistributed net gains accrued in 1975 when the Tobacco Cooperative placed any remaining money belonging to the farmers into a capital reserve and issued certificates of interest that created a separate agreement for the distribution of funds. As a result, the six-year statute of limitation has long since expired, and the plaintiffs’ breach of contract claim is time-barred.
(b) Conversion
OCGA § 9-3-32 provides that “[a]ctions for the recovery of personal property, or for damages for the conversion or destruction of the same, shall be brought within four years after the right of action accrues.” A right of action for wrongful conversion accrues on the date of the conversion. See Logan v. Tucker,
(c) Claim for “Money Had and Received”
Rigby, Elton Carter, and Lee also argue that their claim was essentially one for “money had and received.”
A cause of action for money had and received is appropriate “where one wrongfully receives and retains the money of another.” J.C. Penney Co. v. West,
6. The Plaintiffs next contend that the trial court erred in dismissing their claim for breach of fiduciary duty (Count 9) on the grounds that a corporation owes no fiduciary duty to its members. We agree.
To properly analyze the Plaintiffs’ claim, we must apply the lex loci delicti rule, which provides that “a tort action is governed by the substantive law of the state where the tort was committed.” Dowis v. Mud Slingers,
“For a breach of fiduciary duty to exist, there must first be a fiduciary relationship between the parties.” (Citations omitted.) Dalton v. Camp,
“Under North Carolina law, directors of a corporation generally owe a fiduciary duty to the corporation, and where it is alleged that directors have breached this duty, the action is properly maintained by the corporation rather than any individual creditor or stockholder.” Keener Lumber Co. v. Perry,
The Tobacco Cooperative cites this Court’s decision in ULQ, LLC v. Meder,
The Tobacco Cooperative nevertheless submits that we should affirm the trial court’s judgment because “many, if not all,”
7. The Plaintiffs also contend that the trial court erred in granting summary judgment on its claim for attorney fees and expenses of litigation because the Tobacco Cooperative acted in bad faith, was stubbornly litigious, and caused them unnecessary trouble and expense. We disagree.
OCGA § 13-6-llauthorizesajurytoawardplaintiffstheexpenses of litigation “where the defendant has acted in bad faith, has been stubbornly litigious, or has caused the plaintiff [s] unnecessary trouble and expense.” Generally, it is for the jury to resolve these questions. See Steel Magnolias Realty v. Bleakley,
In this case, the Plaintiffs asked for attorney fees in Count 6 for having to file suit to enforce their contractual rights of membership and to enforce other rights as set out by the Tobacco Cooperative’s bylaws and purchase agreements. The Plaintiffs also asked for attorney fees as a part of their claim for breach of fiduciary duties as specified in Count 9.
With respect to Count 6, which sought attorney fees for enforcing contract rights, we have upheld the grant of summary judgment in favor of the Tobacco Cooperative on these contractual claims. Consequently, the Plaintiffs’ claim for attorney fees in Count 6 fails as a matter of law. See United Companies Lending Corp. v. Peacock,
In sum, we affirm the trial court’s ruling on all of the Plaintiffs’ claims, with the exception of its ruling on the breach of fiduciary claim and any attendant attorney fees as set out in Count 9.
Judgment affirmed in part and reversed in part.
Notes
Wayne Lott was originally among the plaintiffs who brought suit, but the trial court dismissed his claims without prejudice pursuant to his motion.
In 1982, Congress significantly amended the price support program to relieve taxpayers of the cost of the price support program by limiting federal tobacco expenditures and requiring any net gains realized by tobacco cooperatives to be retained by the CCC in order to offset any losses incurred on tobacco loans. See Leaf Tobacco Exporters Assn. v. Block, 749 F2d 1106, 1108-1110 (I)-(II) (4th Cir. 1984) (describing the price support program); Strickland v. Flue-Cured Tobacco Cooperative Stabilization Corp., 643 FSupp. 310, 313 (D.S.C. 1986) (same).
The trial court also dismissed Rigby’s amended Counts 1 and 2, but he does not challenge the dismissal of these amended counts on appeal.
The trial court also granted summary judgment to the Tobacco Cooperative on Count 8 — breach of loan warranty — and the Plaintiffs do not challenge the grant of summary judgment as to this count.
Although the Tobacco Cooperative was incorporated in North Carolina, “the general rule in Georgia is that statutes of limitation are procedural in nature and are therefore governed by the law of the forum state.... The Supreme Court of Georgia has held that a foreign state’s law cannot extend the Georgia limitation period.” (Citations and punctuation omitted.) Butts v. Thomas,
OCGA § 14-2-1602 (b) provides that the member is entitled to inspect the corporation’s records if the member gives a written notice or written demand at least five business days before the date on which the member wishes to inspect the records.
It would appear that the Plaintiffs’ claims are moot given that the trial court did order the Tobacco Cooperative to allow the Plaintiffs to inspect the corporate records, and the Plaintiffs have received voluminous corporate records regarding their accounts during discovery in this case.
Without legal or factual support, Rigby, Elton Carter, and Lee argue that the statute of limitation period did not commence until the end of the federal price support program in 2004. As discussed above, in 1982, the federal government amended the price support program to no longer allow tobacco cooperatives to retain net gains and, instead, those net gains were to be retained by the CCC. If there were any net gains remaining as of 1982, which there were none as discussed above, then the Plaintiffs’ right to these net gains would have been in jeopardy no later than 1982. Consequently, to the extent the Plaintiffs rely upon any changes to the price support program, the statute of limitation on their claims has long since passed.
Although the Tobacco Cooperative argues that the Plaintiffs cannot raise this claim for the first time on appeal, the record shows that the Plaintiffs raised this claim below.
We note that at oral argument, the Tobacco Cooperative confirmed that, in the future, the farmers holding certificates of interest might receive a pro-rata share of the undistributed portion of the net gains from 1967 to 1973. Such farmers cannot compel the Tobacco Cooperative to issue a distribution, however, because Article XI provides that the certificates of interest are redeemable “only upon such terms and at such times as may be determined from time to time by the Board of Directors.”