This consolidated appeal arises from two class actions brought on behalf of former and current members of various electric-membership corporations (“EMCs”), which are private, nonprofit, electric utilities owned by the members they serve. In Case No. A17A0384, former EMC members sued Oglethorpe Power Corporation (“Oglethorpe”), Georgia Transmission Corporation (“GTC”), Walton EMC, Jackson EMC, and Sawnee EMC, raising numerous claims, all of which were based, at least in part, on their assertion that they were entitled to refunds from the defendant EMCs of “patronage capital.”
In Case No. A17A0384, former members of the Walton, Jackson, and Sawnee EMCs appeal the trial court’s dismissal of their complaint, arguing that the court erred by (1) applying the wrong legal standard applicable to a motion to dismiss; (2) finding that the plaintiffs lacked standing; (3) finding that the plaintiffs’ claims were time-barred; (4) concluding that the defendants have no obligation under any circumstances to refund patronage capital to their members; (5) finding that the plaintiffs failed to state claims for breach of contract, unjust enrichment, money had and received, conversion, and equitable relief; and (6) applying the filed-rate doctrine.
Similarly, in Case No. A17A0385, current members ofthe Walton and Jackson EMCs appeal the trial court’s dismissal of their complaint, arguing that the trial court erred by finding that (1) they lacked standing; (2) the EMC defendants have absolute discretion to never retire patronage capital, except upon dissolution; (3) the plaintiffs failed to state claims for breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, money
As conceded by the current and former EMC members, the facts necessary to resolve these consolidated appeals are essentially undisputed.
Oglethorpe, one of the wholesale EMC defendants, was formed by and is owned by the 38 distribution EMCs. And since its formation, Oglethorpe has provided and sold power to those EMCs. In 1997, Oglethorpe created GTC as a separate wholesale EMC to operate its transmission unit, and to that end, GTC now constructs and maintains underground and above-ground power transmission lines, which transmit power to the retail EMCs’ customers. But like Oglethorpe, GTC’s members and owners are the 38 distribution EMCs, not any of the individual consumers. To summarize, individual consumers purchase electricity from and pay their power bills directly to the distri
Under the EMC Act, all electric cooperatives, including each of the named defendants in these consolidated cases, must operate on a nonprofit basis, which means that they must account for each member’s patronage capital—i.e., the member’s pro rata share of the EMC’s earnings in excess of its operating costs and expenses.
Until 1992, Oglethorpe refunded the patronage capital allocated to the distribution EMCs “on a 13 year revolving cycle.” For example, if Oglethorpe still adhered to that practice, patronage capital that allocated to members of an EMC in 2001 would be refunded to those members 13 years later in 2014 and so on. Then, in 1993, however,
Following Oglethorpe’s 1997 distribution of patronage capital, it has continued to “accumulate tremendous amounts of capital credits,” but it has not refunded those credits to the distribution EMCs. As of 2011, the former and current members of Walton EMC have allegedly been allocated (but not refunded) more than $46,000,000 in Oglethorpe patronage capital. And as of 2013, Jackson EMC’s former and current members have allegedly been allocated (but not refunded) more than $78,000,000 in Oglethorpe patronage capital.
On March 13, 2014, Edgar “Ed” Walker, a former member of Walton EMC; Phillip Caltabiano, a former member of Cobb EMC; Grant Meade, a former member of Sawnee EMC; and Samer Khashan, a former member of Jackson EMC,
In the complaint, the former-member plaintiffs asserted the following claims against the wholesale and distribution EMCs: (1) declaratory, injunctive, and mandamus relief to remedy the EMCs’ violation of OCGA § 46-3-340; (2) unjust enrichment; (3) breach of fiduciary duty (only as to the distribution EMCs); (4) breach of contract; (5) conspiracy; (6) money had and received; (7) conversion; and (8) attorney fees. Approximately one year later, on July 9, 2015, the former-member plaintiffs supplemented the complaint to include a claim for abuse of discretion/breach of the duty of good faith.
Meanwhile, in a separate class action filed on August 21, 2014, Michael Shapiro, a current member of Walton EMC; and Bettye Black, a current member of Jackson EMC, sued Oglethorpe, GTC, Walton EMC, and Jackson EMC on behalf of “[cjurrent members of the 38 electric cooperatives that are members of Oglethorpe . . . and [GTC],” also seeking a refund of patronage capital. In their initial complaint, the current-member plaintiffs asserted claims for (1) unjust enrichment and constructive trust; (2) breach of fiduciary duty (against the Walton and Jackson EMCs only); and (3) breach of contract. Later, in the first and second amendments to their complaint, the current-member plaintiffs added claims for (4) abuse of discretion/breach of duty of good faith; (5) conversion as to Walton EMC and Jackson EMC; (6) conversion as to Oglethorpe and GTC; (7) conspiracy; and (8) money had and received.
In both class actions, the distribution EMCs and the wholesale EMCs filed separate motions to dismiss the complaints and amended complaints. Then, after responsive pleadings were filed, the trial court appointed Judge Stanley F. Birch, Jr., a retired federal judge from the Eleventh Circuit Court of Appeals, to serve as the special master and to issue a report and recommendation to the court in each case. In evaluating the motions to dismiss, Judge Birch reviewed extensive briefing, consisting of more than 250 pages and more than 300 citations of authority, after which he held a hearing on both cases
At the outset, we reiterate that this Court conducts “a de novo review of a trial court’s ruling on a motion to dismiss.”
Case No. A17A0384
1. The former-member appellants first argue that the special master (and therefore the trial court) applied the incorrect standard for reviewing motions to dismiss a complaint. We disagree.
The former-member appellants argue that the trial court erred in applying a “hybrid standard” drawn from both federal and state law that was “heavily influenced” by federal cases. They further contend that, although the court did not expressly adopt “the more restrictive federal standard” set forth in those cases, the standard it applied does not comport with Georgia law. Specifically, the former-member appellants appear to take issue with a portion of the special master’s report that quotes a passage regarding standing from a dissent in a Supreme Court of Georgia opinion, Charles H. Wesley Education Foundation, Inc. v. State Election Board,
Moreover, the only examples that the former-member appellants identify as “facts” that the special master rejected are actually legal conclusions, which the trial court was not required to accept as true.
(a) Breach of Con tract and, Related Tort Claims
The general rule in Georgia is that “one not in privity of contract with another lacks standing to assert any claims arising from violations of the contract.”
[N]o privity is necessary to support a tort action; but, if the tort results from the violation of a duty which is itself the consequence of a con tract, the right of action is confined to the parties and those in privity to that contract, except in cases where the party would have a right of action for the injury done independently of the contract^]19
In this case, the former-member appellants’ contract and related tort claims, albeit stated in different terms, all essentially sought to establish and enforce a duty under each of the EMCs’ bylaws to refund patronage capital to their members, either at the time when a member terminates his or her membership or after some “reasonable,” but unspecified, length of time.
In the case sub judice, the only potential contracts that were identified by the former-member appellants as having been breached are each EMC’s bylaws. But they acknowledged that each EMC’s bylaws “constitute a contract as between the cooperative and its members”
Lastly, we note that because all of the former-member appellants—as well as any other former member of a distribution EMC the appellants purport to represent—lack standing to sue Oglethorpe and GTC for breach of contract or for any tort claim based on a violation of their bylaws, DeKalb County is no longer a proper venue to bring such claims against any of the remaining EMC defendants. Indeed, the former-member appellants’complaint asserted that venue in DeKalb County is proper as to Oglethorpe and GTC because they maintain their principal places of business and their registered
(b) Violation of the EMC Act
In addition to the contract and related tort claims, the former-member plaintiffs alleged that all of the EMCs violated a requirement in OCGA § 46-3-340 that they periodically refund patronage capital prior to dissolution. But the trial court concluded that OCGA § 46-3-340 does not provide a right of action for the former-member appellants to enforce its provisions, and they do not challenge that determination on appeal. Indeed, although Count 1 of their complaint specifically requested relief for a violation of OCGA § 46-3-340 and the former-member appellants devote a significant portion of their opening brief to discussing the history, “purpose,” and alleged requirements of the EMC Act, they nevertheless maintain that they “do not
Furthermore, because the EMC Act and its alleged requirements are discussed at such length in the former-member appellants’ brief, it is worth noting that the trial court did not err in finding that there is no private right of action to enforce the provisions of OCGA § 46-3-340. It is well settled in Georgia that “violating statutes and regulations does not automatically give rise to a civil cause of action by an individual claiming to have been injured from a violation thereof.”
Nevertheless, the former-member appellants argue that they have standing to enforce a “breach of statutory duty” under OCGA § 51-1-6, which provides that “[w]hen the law requires a person to perform an act for the benefit of another or to refrain from doing an act which may injure another, although no cause of action is given in express terms, the injured party may recover for the breach of such legal duty if he suffers damage thereby” But as explained by our Supreme Court, the alleged duty “cannot rest solely upon OCGA § 51-1-6 because this statute sets forth merely general principles of tort law.”
The former-member appellants further argue they have standing to sue all of the EMCs, including Oglethorpe and GTC, because the EMCs “acted in concert and as part of a conspiracy reflected in, among other things, their joint decisions, interlocking boards, integrated business structure, and common economic interest.” And they are correct that “[ajfter [a] conspiracy is formed, members of the conspiracy are jointly and severally liable for acts of co-conspirators done in furtherance of the conspiracy.”
[a] conspiracy is a combination of two or more persons to accomplish an unlawful end or to accomplish a lawful end by unlawful means [,] [and] [t]o recover damages for a civil conspiracy claim, a plaintiff must show that two or more persons, acting in concert, engaged in conduct that constitutes a tort.41
Indeed, absent the underlying tort, “there can be no liability for civil conspiracy.”
(d) Juridical-Link Doctrine
The former-member appellants next argue that, regardless of whether they have directly interacted with all of the defendant EMCs, they can sue those EMCs under the “juridical[-]link doctrine” because they are linked through contracts or other independent relationships. In Moore v. Comfed Savings Bank,
in the event there is a juridical link, it is appropriate to join as a defendant a party with whom the named class representative did not have a direct contact, each of them presents a situation in which there was either a contractual obligation among all defendants or a state or local statute requiring common action by the defendants.47
And here, the former-member appellants have not identified any specific contract under which all of the EMC defendants share the same contractual obligation or any statute requiring a common action by all of the wholesale and retail EMCs.
The former-member appellants further assert that, notwithstanding the fact they are not parties to any contracts between the wholesale EMCs and their members, they have standing to sue the wholesale EMCs for a breach of their bylaws because the distribution EMCs, which are parties to those bylaws, are their agents. But to prove actual agency, the purported principal must have “assumed the right to control the method, manner, and time of the purported agent’s work, as distinguished from the right merely to require certain definite results in conformity to the contract.”
Finally, the former-member appellants argue they have standing to sue Oglethorpe and GTC because they are third-party beneficiaries of those EMCs’ bylaws. Although the appellants are indeed correct that a third-party beneficiary does not need to be specifically named in the contract, “the contracting parties’ intention to benefit the third party must be shown on the face of the contract.”
Even if the former-member appellants had standing to sue the individual distribution EMC of which they were previously members, the trial court correctly found that their claims are time-barred. In Georgia, “[t]he true test to determine when a cause of action accrues is to ascertain the time when the plaintiff could first have maintained his or her action to a successful result.”
Here, the former-member appellants’ complaint alleged that “[r] epayment of former members’ patronage capital is an obligation of each [defendant [that] must be done on at least an annual basis.”
With respect to their conversion claim, the former-member appellants alleged that, in 1997, Oglethorpe made a patronage capital refund of $49,000,000 to the distribution EMCs, and in 1990 through
Nevertheless, the former-member appellants argue the statute of limitation did not begin to run until the EMCs breached their duty to refund patronage capital “within a reasonable time” after they terminated their accounts. They further claim that the trial court ignored their alternative request for relief that the EMCs establish “an ongoing schedule to retire patronage capital over time.” But in addition to their allegations that they were entitled to a refund of patronage capital upon terminating their accounts or annually thereafter, the appellants also defined a “reasonable” rotating schedule for refunding patronage capital to be no longer than 13 years. And according to their complaint, the distribution EMCs (of which the appellants were former members) “have never refunded patronage capital originally allocated to them by Oglethorpe and [GTC] . . . .”
before the running of the limitation period will toll, it must be shown that the defendant concealed information by an intentional act—something more than a mere failure, with fraudulent intent, to disclose such conduct, unless there is on the party committing such wrong a duty to make a disclosure thereof by reason of facts and circumstances, or the existence between the parties of a confidential relationship.69
Here, the former-member appellants’ complaint alleged, generally, that the EMCs both concealed and breached their obligation to periodically refund patronage capital. But they also alleged that this obligation arises from the EMC Act, a statute available to the public, and the bylaws of each EMC, which the appellants have never alleged were concealed from them. And in fact, the EMC Act authorizes members of an EMC to sue an EMC in superior court to enforce their statutory right to inspect an EMC’s books and records.
4. The former-member appellants argue the trial court erred in finding that the wholesale and distribution EMCs have no obligation under any circumstances to refund patronage capital except upon dissolution. This claim is likewise without merit.
The former-member appellants argue that the EMC Act requires EMCs to refund patronage capital before dissolution at “reasonable times,”
We are mindful that, in considering the meaning of a statute, our charge as an appellate court is to “presume that the General Assembly meant what it said and said what it meant.”
Turning to the statute at hand, OCGA § 46-3-340 provides:
(a) Each electric membership corporation shall be operated without profit to its members; but the rates, fees, rents, or other charges for electric energy and any other facilities, supplies, equipment, or services furnished by the electric membership corporation shall be sufficient at all times:
(1) To cover all administrative and operating expenses and the costs of purchased capacity and energy as necessary or desirable for the prudent conduct of its business, and to cover the payments of the principal of and interest on the obligations issued or assumed by the electric membership corporation in the performance of the purposes for which it was organized; and
(2) To establish and maintain reasonable reserves.
(b) An electric membership corporation may also accumulate funds for future capital needs and for the purpose of establishing and maintaining a reasonable capital structure.
(c) The bylaws of an electric membership corporation shall contain provisions, consistent with subsection (a) ofthis Code section, for accounting for, allocating, assigning and, disposing of its revenues and assets and may establish classes of members for such purposes. 80
As evidenced above, the plain language of subsections (a) (2) and (b) expressly permits EMCs to “accumulate funds” beyond those necessary for costs and operating expenses to “maintain reasonable reserves” for future capital needs and “for the purpose of establishing and maintaining a reasonable capital structure.” The former-member appellants have not alleged, and we do not find, that those subsections are ambiguous in any respect. Instead, the appellants argue that subsection (c) contains an implicit requirement that EMCs refund patronage capital prior to dissolution either when a member terminates his or her account or on a “reasonable” schedule that requires EMCs to refund patronage capital at least 13 years after it was allocated to a member. But no such specific and detailed requirements for the retirement of patronage capital are contained in subsection (c), implicitly or otherwise.
Contrary to the former-member appellants’ contention, the plain and unambiguous language of OCGA § 46-3-340 (c) requires only that the bylaws of each EMC “contain provisions” regarding the accounting for, allocating, assigning, and disposing of revenues. And it sets forth no mandates as to the substance of those provisions. In essence, the appellants ask this Court (or a jury) to create a mandate that EMCs adopt a particular schedule for refunding patronage capital prior to dissolution based solely on the Act’s general principles regarding the cooperative and nonprofit nature of EMCs, rather than based on the statutory text itself. We are not at liberty to do so. Although the statute, as written, may seem unfair to the appellants, it is the job of the legislature, not the courts, to rewrite or revise statutes.
Moreover, notwithstanding the appellants’ repeated claims to the contrary, the Supreme Court of Georgia has held that “[capital] credits allocated to a patron on the books of a cooperative do not reflect
5. In four separate enumerations of error, the former-member appellants argue the trial court erred in finding that they failed to state a claim for breach of contract, unjust enrichment, money had and received, conversion, declaratory relief, and injunctive relief. Yet again, we disagree.
We begin by reiterating that “[w]e review de novo a trial court’s determination that a pleading fails to state a claim upon which relief can be granted, treating all material allegations set forth in the complaint as true, treating all denials set forth in the answer as false, and resolving any doubts in favor of the plaintiff.”
(a) Breach of Con tract
As an initial matter, and as explained in Division 2 (a) supra, the former-member appellants lack standing to bring a breach-of-contract claim against Oglethorpe, GTC, and any of the 38 distribution EMCs of which they were never a member. Here, the named plaintiffs are former members of Walton, Cobb, Sawnee, and Jackson EMCs.
In Georgia, the elements for a breach-of-contract claim are “the (1) breach and the (2) resultant damages (3) to the party who has the right to complain about the contract being broken.”
But the former-member appellants have never, and do not now, claim that any particular provision in the EMCs’ bylaws expressly mandates that the EMCs refund patronage capital at the time when a member terminates his or her account or after any specified length of time thereafter. Instead, they alleged that by failing to periodically refund patronage capital on a “reasonable” schedule of no more than 13 years following allocation, the EMCs breached a more general promise to “operate on a nonprofit cooperative basis for the mutual benefit of the members who are their customers.” Put another way, they claimed that “[t]he obligation to allocate and return patronage capital to the members and former members is reflected in the [EMCs’] bylaws through their embrace of cooperative principles ... .”
Notwithstanding the former-member appellants’ interpretation of what the term “cooperative principles” means or requires of EMCs, we have held that “when a provision specifically addresses the issue in question, it prevails over any conflicting general language.”
The specific provisions regarding the allocation and retirement of patronage capital unambiguously provide that the only time when Walton EMC’s board of directors is required to refund patronage capital is at the time of dissolution or liquidation,
Nevertheless, while the former-member appellants appear to concede that each EMC’s board of directors has discretion regarding when to refund patronage capital prior to dissolution, they argue that the EMC boards have breached their duty to exercise such discretion in good faith. But although every contract “implies a covenant of good faith and fair dealing in the contract’s performance and enforcement^] . . . the covenant cannot be breached apart from the contract provisions it modifies and therefore cannot provide an independent basis for liability.”
The former-member appellants next challenge the trial court’s dismissal of their claims for unjust enrichment and money had and received. Specifically, they argue that the trial court erred in finding that (1) such claims only arise in the absence of a contract; (2) the appellants were required to allege that they conferred a direct benefit on Oglethorpe and GTC; and (3) the retention of patronage capital by Oglethorpe and GTC was not unjust or inequitable because those EMCs were entitled to retain such funds under the EMC Act.
Nevertheless, as explained by the Supreme Court of Georgia, “[ujnjust enrichment applies when as a matter of fact there is no legal contract, but where the party sought to be charged has been conferred a benefit by the party contending an unjust enrichment which the benefit[t]ed party equitably ought to return or compensate for.”
As to the former-member appellants’ unjust-enrichment claim, the complaint alleged that the defendant EMCs were retaining property belonging to them—i.e., patronage capital allocated to them on the EMCs’ books. Similarly, the appellants’ money-had-and-received claim was based on an allegation that the EMCs have wrongfully retained patronage capital after they terminated their accounts that should be refunded to them. Importantly, they claimed that the EMCs were bound to refund patronage capital “by contract and state and federal law.”
But the former- member appellants paid no money (and conferred no benefit) to any EMC other than the distribution EMC from which they formerly purchased electricity. Moreover, to establish their entitlement to a refund of patronage capital, the appellants rely only
(c) Conversion
As previously explained in Division 3 supra, the former-member appellants’ conversion claim relates to specific transactions that occurred between 1990 and 1997, and, as a result, are barred by a four-year statute of limitation.
(d) Injunctive and Declaratory Relief
The former-member appellants also argue the trial court erred by dismissing their claims for declaratory and injunctive relief. But they have abandoned any challenge to the dismissal of their claim for injunctive relief by failing to cite to any legal authority to support it.
Turning to the claim at issue, the former-member appellants alleged that declaratory relief was necessary to resolve outstanding uncertaintiesregardingthe EMCs’dutiesimposedbyOCGA § 46-3-340
to satisfy their obligations and set rates at a level sufficient to redeem their patronage capital obligations, [the appellants’] ownership of that patronage capital, [the EMCs’] obligation to redeem or refund that patronage capital, and [the EMCs’] compliance with the mandate that they operate as nonprofits, at cost, and in accordance with the user-ownership principle.
But as explained in Divisions 2 (b) and 4 supra, the former-member appellants have no private right of action to enforce the requirements of OCGA § 46-3-340, and even if they did, that statute does not mandate that an EMC refund patronage capital at any particular time or on any set schedule prior to dissolution or liquidation. And it certainly does not contain specific mandates—as the appellants allege in their complaint—that an EMC “charge and collect current member rates that are sufficient to cover refunds of patronage capital to members upon termination of service (or by the next accounting period thereafter) or, at a minimum, on a 13-year revolving cycle from the date of allocation.”
Case No. A17A0385
7. In their first enumeration of error, the current-member appellants argue the trial court erred in concluding “that [the] defendants have absolute discretion to never retire patronage capital, except upon dissolution.” But similarly to the former-member appellants’ argument, this contention is entirely based on an alleged duty to periodically refund patronage capital arising from OCGA § 46-3-340 and the bylaws of each EMC. And given our holdings in Divisions 2 (b), 4, and 5 (a) supra, this argument is without merit. Moreover, while the current-member appellants set forth their proposed construction of OCGA § 46-3-340 and contend that expert testimony is needed to explain a “term of art” in the statute, they fail to address the threshold matter of whether they have a private right of action to enforce the provisions of OCGA § 46-3-340, which, as explained supra, they do not.
As to the requirements of the EMCs’ bylaws regarding patronage capital, the current-member appellants, like the former-member appellants, rely on general concepts regarding the “cooperative principles” governing EMCs, which, as previously explained, are not controlling in light of the specific provisions in each of the bylaws addressing the allocation and retirement of patronage capital.
Finally, the current-member appellants argue that the Supreme Court of Georgia’s decision in Howard
8. Next, the current-member appellants argue the trial court erred in finding that they lacked standing to sue the wholesale EMCs, Oglethorpe, and GTC. And while the current-member appellants do not dispute that they are not now, nor have they ever been, members of Oglethorpe and GTC,
Nevertheless, the current-member appellants also argue that they have standing because (1) the distribution EMCs act as their agents in purchasing electricity from the wholesale EMCs; (2) they are third-party beneficiaries of the contracts (bylaws) between the wholesale and distribution EMCs; and (3) neither unjust enrichment nor conspiracy requires any privity between them and the wholesale EMCs. But we reject these arguments for the same reasons given in Divisions 2 (c), 2 (e), 2 (f) and 5 (b) supra.
(a) Breach of Con tract
The current-member appellants first contend their complaint alleged that the EMCs have breached their bylaws by failing to distribute patronage capital and the court erred by dismissing this claim because there is a contested factual issue regarding the EMCs’ contractual duty to distribute such capital. But we have held that “[cjontract disputes are particularly well suited for adjudication by summary judgment because construction of contracts is ordinarily a matter of law for the court.”
(b) The Implied Duty of Good Faith and Fair Dealing
The current-member appellants also argue the trial court erred in finding that they failed to state a claim for a breach of the covenant of good faith and fair dealing because, even if the EMCs’ boards of directors have discretion regarding when to refund patronage capital, Georgia courts “do not deem grants of discretion absolute in the absence of clear language to that effect . . . Nevertheless, the appellants have failed to establish that any EMC had an express or implied duty under its bylaws to refund patronage capital at any
(c) Unjust Enrichment
Next, the current-member appellants contend the trial court erred in concluding that they failed to state a claim for unjust enrichment. Specifically, they argue that the trial court erroneously concluded they were precluded from pleading both a breach-of-contract claim and an unjust-enrichment claim. But the trial court did not find that the current-member appellants were generally precluded from pleading alternative theories of recovery. Instead, it found that their unjust-enrichment claim failed because they contend that the bylaws constitute an enforceable contract between the parties.
And as previously explained in Division 5 (b) supra, “[ujnjust enrichment applies when as a matter of fact there is no legal con tract, but where the party sought to be charged has been conferred a benefit by the party contending an unjust enrichment which the benefit[t]ed party equitably ought to return or compensate for.”
(d) Money Had and Received
The current-member appellants further argue the trial court erred in dismissing their money-had-and-received claim for failure to state a claim based on its conclusion that such a claim is only viable in the absence of a contract. But for the reasons given in Division 5 (b) supra, the trial court was correct that a claim for money had and received “exists only where there is no actual legal contract governing the issue.”
(e) Conversion
Next, the current-member appellants argue the trial court erred in dismissing their claim for conversion. But like the former-member appellants’ conversion claim, the instant claim arises from transactions that occurred in the 1990s. And because the current-member appellants did not bring their conversion claim until 2014, it is time-barred for the same reasons given in Division 3 supra.
(f) Conspiracy
The current-member appellants argue the trial court erred in dismissing their conspiracy claim based on a finding that such claims can only be brought based on tortious conduct but not breach of contract. In their complaint, the appellants asserted generally that the EMC defendants “conspired with one another to violate their promise to operate as cooperatives” and to “unlawfully maintain possession and control of [appellants’] patronage capital and have used this money for their own purposes.” But as the trial court found, and as explained more fully in Division 2 (c) supra, “[a]bsent [an] underlying tort, there can be no liability for civil conspiracy.”
(g) Declaratory and Injunctive Relief
The current-member appellants also argue the trial court erred in dismissing their claim for injunctive relief, which requested “an immediate distribution of long-accumulated patronage capital credits to [c]lass members[,]” as well as their claim for declaratory relief, which sought to require the EMCs to distribute patronage capital “according to a regular, reasonable revolving plan.” But although the appellants’ two amended complaints reference their original complaint as one for “declaratory [,] injunctive, and mandamus relief and damages” and listed such relief generally as one of their prayers for relief, none of the complaints alleged a separate count setting forth a specific claim for such relief. And on appeal, while they assert their entitlement to the declaratory and injunctive relief set forth above, they cite only a single case to support that contention and do not elaborate on how that legal authority supports their position.
10. Finally, the current-member appellants argue the trial court erred in finding that their claims against the distribution EMCs are derivative and must be dismissed because the appellants failed to comply with the pre-suit derivative-claim requirements of OCGA §
For all these reasons, we affirm the trial court’s dismissal order in both of the consolidated appeals.
Judgments affirmed.
Notes
Patronage capital consists of earnings in excess of each EMCs operating costs and expenses that are allocated on each EMCs books to its members. Patronage capital is also referred to as “capital credits” throughout the record, the parties’ briefs, and this opinion.
During a March 17, 2016 hearing, counsel, speaking on behalf of both plaintiff classes, confirmed to the trial court that there were “no actual facts in dispute.” Instead, counsel explained, this is “a dispute over what the law[ ] requires with respect to the capital credit.” Nevertheless, we note that, “[i]n ruling on a motion to dismiss, the trial court must accept as true all well-pled material allegations in the complaint and must resolve any doubts in favor of the plaintiff.” Wright v. Waterberg Big Game Hunting Lodge Otjahewita (PTY), Ltd.,
The Supreme Court of Georgia has described “[t] he typical cooperative system of allocating and remitting earnings to its members” as follows:
Statutes regulating the structure of cooperative associations and bylaws of such associations frequently provide for the retention by the association of all or a portion of the operating profit of the association to furnish capital for the association. In evidence of this, each member of the association is credited with his or her proportionate part of the profit on the books of the association, and is generally issued a certificate showing the credit. This plan is known as the revolving fund plan, or equity plan, and the credits are known as equity credits or patronage credits. These credits are in effect the capital of the cooperative, and raising capital in this way is the most equitable means by which a cooperative can acquire its capital from its patrons. The capital secured through such an equity plan is comparable to the earned surplus of a conventional business organization. Equity credits are not an indebtedness of a cooperative that is presently due and payable to the members, but represent an interest that will be paid to them at some unspecified later date, to be determined by the board of directors. The interest becomes vested only if the board of directors, following the bylaws, exercises its sound discretion in determining that such payments can be made without causing undue financial hardship to the association.
Cason v. Cason,
Although the appellants, former and current members of distribut ion EMCs, assert that they have been allocated millions of dollars worth of “Oglethorpe capital credits,” their complaints also allege (and it is undisputed) that they are not members of Oglethorpe and that Oglethorpe only allocates capital credits on its books to its mem bers, the distribution EMCs. As a result, the plaintiffs appear to be referring to patronage capital that they believe would be allocated to them by their individual distribution EMCs only if Oglethorpe first refunded patronage capital to those EMCs.
We note that under the EMC Act, a current member of an EMC has the right to inspect the books and records of that EMC, and if the EMC refuses to allow a member to do so, the member can then sue the EMC in superior court to enforce that right. See infra note 35; OCGA § 46-3-271 (b), (c). The Act does not, however, expressly grant that right to former members.
For ease of reference, the plaintiff class consisting of former EMC members will be referred to throughout as “former-member plaintiffs” or “former-member appellants,” and the plaintiff class consisting of current EMC members will be referred to as “current-member plaintiffs” or “current-member appellants.” And when it is clear that a division of this opinion applies only to a particular plaintiff class, the class at issue will sometimes be referred to simply as “plaintiffs” or “appellants.”
As an aside, we note that Judge Birch’s comprehensive and well-reasoned reports have greatly aided this Court in the resolution of this appeal.
Dove v. Ty Cobb Healthcare Sys., Inc.,
Dove,
Dove,
See id. at 714(1) n.7.
See supra note 10 & accompanying text.
See Jenkins v. State,
See supra notes 8-10 & accompanying text.
See Novare Grp., Inc.,
See Greene Cty. Sch. Dist., Inc.,
Dominic v. Eurocar Classics,
(Emphasis supplied.) See Wansor v. George Hantscho Co.,
The former-member appellants summarily assert—without any further elaboration and citing only a statute providing that deprivation of property is a tort—that because their claims for unjust enrichment and money had and received are equitable in nature and because a conversion claim does not require a contractual relationship, they have standing to bring those claims even though they have no contractual relationship with the wholesale EMCs. To the extent that these appellants have not abandoned that argument on appeal, their conversion claim is time-barred for the reasons discussed in Division 3 infra, and they have failed to state a claim for unjust enrichment or money had and received for the reasons given in Division 5 (b)
We note that the former-member appellants alleged that, other than the duty imposed by their bylaws, the EMCs also have a statutory duty to refund patronage capital prior to dissolution, but as explained more fully below, the statute at issue does not impose such a duty or provide them with a private right of action to enforce its provisions.
See OCGA § 51-1-11 (a); Dominic,
(Emphasis supplied.)
See supra notes 18, 19, and 22 & accompanying text.
See OCGA § 14-2-510 (providing that venue against a corporation is proper, inter alia, “in the county of this state where the corporation maintains its registered office; or if the corporation fails to maintain a registered office, it shall be deemed to reside in the county where its last named registered office or principal office . . . was maintained”); Hallmark Props., Inc. v. Slater,
See Ga. Const. Art. VI, Sec. II, Par. IV (“Suits against joint obligors, joint tort-feasors, joint promisors, copartners, or joint trespassers residing in different counties may be tried in either county.”); see also Re/Max 100 of Sandy Springs, Inc. v. Tri-Cont’l Leasing Corp.,
Chitty v. Jones,
We acknowledge that, when venue is determined to be improper, the appropriate response is to transfer the case to a proper venue. See Ga. Dep’t of Human Servs. v. Dougherty Cty.,
The former-member appellants contend in their opening brief that they do not need a private right of action to enforce OCGA § 46-3-340 because “[t]he duties imposed by the Act are binding on [the EMCs] and thus can be enforced through an action for tort or breach of contract.” But this argument is based on the assumptions that these appellants have standing to sue the EMCs of which they were never members for breach of contract and related torts and that their complaint was sufficient to state such claims. They are mistaken. Both of these assumptions are baseless for the reasons outlined in Divisions 2 (a), 2 (c)-(f) and 5 of this opinion.
See Murphy v. Freeman,
Best Jewelry Mfg. Co. v. Reed Elsevier Inc.,
Best Jewelry Mfg. Co.,
Anthony v. Am. Gen. Fin. Servs., Inc.,
Somerville,
Wenotethat,unlike OCGA § 46-3-340, another section ofthe EMC Act (OCGA § 46-3-271) expressly provides for a private right of action to enforce its requirement that an EMC allow its members to inspect its books and records. See OCGA § 46-3-271 (c) (providing that if an EMC refuses to permit inspection of its books and records authorized in subsection (b) of that statute, the member demanding inspection may apply to the superior court for relief). Thus, we must presume that if the General Assembly also wished to allow EMC members to sue an EMC to seek relief for a violation of OCGA § 46-3-340, “it would have expressly authorized them to do so.” Kemp v. Kemp,
Wells Fargo Bank, N.A. v. Jenkins,
Jenkins,
Id.; see Pulte Home Corp. v. Simerly,
See DaimlerChrysler Motors Co., LLC v. Clemente,
McIntee v. Deramus,
Hartsock v. Rich’s Emps. Credit Union,
Hartsock,
See Hutchinson v. Whaley,
See supra notes 41-42 & accompanying text; Cook,
908 F2d 834 (11th Cir. 1990).
See id. at 838 (IV) (A).
Id.
To the extent that the EMC Act requires the “common action” of EMCs to operate on a nonprofit basis, the Act does not require EMCs to perform the particular action that the former-member appellants allege it does for the reasons given in Division 4 infra.
See Moore, 908 F2d at 838-39 (IV) (A) (discussing the juridical-link doctrine, but ultimately holding that joinder of the defendants was permitted by Federal Rule of Civil Procedure 20).
Satisfaction & Serv. Hous., Inc. v. SouthTrust Bank, Inc.,
See Clark,
See supra notes 50-51 & accompanying text.
Donnalley v. Sterling,
Donnalley,
The sole case that the former-member appellants rely on for the proposition that the intent of the parties to a contract to benefit a third party is typically a fact question makes no such broad-sweeping pronouncement. Instead, in that case, this Court acknowledged that “a third party is entitled to recover from an accountant, despite the absence of privity, where the third party is in a limited class of persons known to be relying upon representations of accountants." Travelers Indem. Co. v. A. M. Pullen & Co.,
As explained in note 94 in fra, the bylaws of each of the defendant EMCs were properly considered by the trial court because they were attached and incorporated into the defendants’ pleadings.
The former-member appellants summarily contend that, despite their lack of privity to the bylaws of the wholesale and retail EMCs of which they were never members, they have standing because the EMCs assigned their interest in those bylaws to the appellants and because the appellants are the “real parties] in interest.” But the appellants acknowledge that they never obtained a ruling on these arguments in the trial court, and under such circumstances, this Court will not consider them. See CDP Event Servs.,
Scully v. First Magnolia Homes,
Wallace,
(Emphasis supplied.)
(Emphasis supplied.)
See Newell Recycling of Atlanta, Inc. v. Jordan Jones & Goulding, Inc.,
SeeOCGA § 9-3-32 (“Actions 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 . . . .”).
Stewart v. Warner,
See id. at 322-23 (holding that the four-year statute of limitation for a conversion claim began to run on the date of the alleged conversion); Logan v. Tucker,
(Emphasis supplied.)
Hamburger,
Hamburger,
Hamburger,
See OCGA § 46-3-271 (b), (c); supra note 35.
See Goldston v. Bank of Am. Corp.,
As previously mentioned, the former-member appellants alleged that, at a minimum, 13 years is a reasonable cycle for refunding patronage capital, noting that Oglethorpe refunded patronage capital on a 13-year cycle prior to 1994, when Oglethorpe’s board lengthened the cycle to 30 years before revoking the use of a fixed cycle altogether.
To support this enumeration of error, the former-member appellants also argue that EMCs are required to refund patronage capital prior to dissolution by each EMC’s bylaws. But the appellants’ arguments regarding the EMCs’ bylaws are only relevant if their complaint sufficiently stated a breach-of-contract claim. And for the reasons set forth in Division 5 (a) supra, it did not.
Deal v. Coleman,
See Deal,
See Arizona v. Inter Tribal Council of Arizona, Inc., _ U. S. _, _ (II) (B) (
Deal,
In the Interest of L. T.,
Holcomb v. Long,
(Emphasis supplied.)
See Allen v. Wright,
Howard v. Eatonton Co-operative Feed Co.,
Howard,
The former-member appellants argue that “the ruling below allows an impermissible legal fiction” that permits the EMCs to avoid paying taxes on patronage capital by never refunding such capital prior to dissolution. They further argue that, if an EMC board has absolute discretion to decide when, if ever, to retire patronage capital prior to dissolution, former members, as a practical matter, may not receive a refund of patronage capital during their lifetimes. But while such circumstances are perceived to be inequitable to the appellants as a policy matter, they have abandoned these arguments by failing to cite any legal authority to support them. See Murphy,
Campbell,
Campbell,
Campbell,
Campbell,
Although Philip Caltabiano, a former member of Cobb EMC, is named as a plaintiff in the complaint, we note that, according to the complaint, Caltabiano has already reached a settlement with Cobb EMC regarding the repayment of patronage capital in a separate class action.
UWork.com, Inc. v. Paragon Techs., Inc.,
UWork.com, Inc.,
(Emphasis supplied.)
Avion Sys., Inc. v. Thompson,
The five named EMC defendants filed an amendment to their answers and attached numerous amended versions of their bylaws, which were considered by the special master and the trial court. While considering matters outside the pleadings generally converts a motion to dismiss into a motion for summary judgment, a trial court “may properly consider exhibits attached to and incorporated in the pleadings in considering a motion to dismiss for failure to state a claim for relief.” Hendon Props., LLC v. Cinema Dev., LLC,
(Emphasis supplied.)
(Emphasis supplied.) A review of Jackson and Sawnee EMCs’ bylaws shows that they contain substantially similar provisions regarding the allocation and retirement of patronage capital, which, like Walton EMC’s bylaws, require the allocation of such capital to its members’ accounts and that it be refunded upon dissolution or liquidation, but grants the board of directors the discretion to refund patronage capital prior to dissolution. Because it appears to be undisputed that the provisions of Walton EMC’s bylaws are adequately representative of the bylaws of the other named EMCs, we need not address each of them separately.
Under a principle of contract construction, expressio unius est exclusio alterius or “the express mention of one thing implies the exclusion of another,” the fact that the EMCs’ bylaws expressly require patronage capital to be refunded in the event of dissolution or liquidation necessarily implies that there are no other times when an EMC is required to refund patronage capital, including, as the appellants suggest, when a member terminates his or her account. See Miller Cty. Bd. of Ed. v. McIntosh,
See supra note 93 & accompanying text; see also Carnett’s Props., LLC v. Jowayne, LLC,
See supra notes 82-83 & accompanying text.
McGee v. Patterson,
See Secured Realty Inv. v. Bank of N. Ga.,
Engram v. Engram,
Fernandez v. Web Singularity, Inc.,
Fernandez,
(Emphasis supplied.)
See Howard,
See Rommelman,
See OCGA § 9-3-32 (“Actions 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 . . . .”).
See supra note 57.
Mariner Healthcare, Inc. v. Foster,
Walker v. Owens,
Walker,
See OCGA § 46-3-340; Division 4 supra.
See Capitol Infrastructure, LLC v. Plaza Midtown Residential Condo. Ass’n, Inc.,
See supra note 93 & accompanying text.
See supra note 82.
Howard,
Id. at 792 (2) (emphasis supplied).
Id. (emphasis supplied).
Lamar Elec. Membership Corp. v. Carroll,
See OCGA § 46-3-340 (c); Transp. Ins. Co. v. El Chico Rests., Inc.,
See Gwinnett Cty. Sch. Dist. v. Cox,
The current-member appellants’ complaint asserted that they brought this class action “on behalf of the current members of the 38 Georgia cooperatives that are members of Oglethorpe and GTC.” Thus, the appellants represent members of distributive, not wholesale, EMCs.
See Massachusetts v. Environmental Protection Agency,
See id.
Core LaVista, LLC v. Cumming,
See supra note 94.
See supra Division 5 (a); notes 100-101 & accompanying text.
Engram,
See supra Division 5 (b), note 107.
Fernandez,
2 9
See id, at 430 (2).
See id.
See, e.g., Baghdady v. Cent. Life Ins. Co.,
Hartsock,
Sheppard v. Yara Eng’g Corp.,
Id. (punctuation omitted) (emphasis supplied).
Id. at 149; see also ServiceMaster Co., L.P. v. Mart in,
The appellants cite to Bd. of Comm ’rs of Spalding Cty. v. Stewart,
Although the current-member appellants do not appear to expressly challenge the trial court’s finding that their claims against the wholesale EMCs are derivative, they do argue that recovery from the distribution EMCs only would not adequately compensate them and that they seek a “direct refund” of patronage capital currently held by the wholesale EMCs.
See generally Divisions 2, 8, and 9 supra.
