Brilliant Alternatives, Inc. et al v. Feed Management Systems, Inc. et al

Filing 160

ORDER granting Defendants' 127 Motion for Summary Judgment. Accordingly, this suit is now limited to Defendants' counterclaims. The parties are DIRECTED to file a joint, proposed pre-trial order within 30 days of this Order. Signed by Judge Richard W. Story on 8/6/12. (cem)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
BRILLIANT ALTERNATIVES,
INC., et al.,
Plaintiffs,
v.
FEED MANAGEMENT
SYSTEMS, INC., et al.,

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CIVIL ACTION NO.
1:09-CV-2348-RWS

Defendants.
ORDER
This case comes before the Court on Defendants’ Motion for Summary
Judgment [127]. On May 7, 2012, this Court granted Defendants’ Motion [127]
in part, but reserved ruling on Plaintiffs’ fraud and derivative accounting,
punitive damages, and attorney’s fees claims in light of the Court’s decision to
compel additional discovery from Defendants. In doing so, the Court rejected
most of Plaintiffs’ fraud allegations and found that it would only reserve ruling
as to whether Defendant Reynertson’s statement that “Plaintiffs would receive
commissions from the sale of FMS products as well as the Brilliant Products”

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was a material misrepresentation. See Dkt. No. [154] at 18.1 The Court
instructed the parties that, following the Defendants’ supplemental production,
the parties could each file supplemental briefs which solely addressed “whether
the new discovery creates a genuine issue of material fact regarding whether
Plaintiffs were paid the percentage owed them under the Brilliant-Comco
Agreement for FMS Product Sales.” Dkt. No. [154] at 20-21.
To prove fraud in Georgia, Plaintiffs are required to prove: “(1) a
misrepresentation by defendant of a material existing fact, (2) with knowledge
that it was false or with reckless disregard as to whether it was true, (3) with
intent to deceive plaintiff, and (4) [that] plaintiff acted upon the
misrepresentation in reasonable reliance upon its veracity in a manner which
caused proximate injury.” Management Assistance, Inc. v. Computer
Dimensions, Inc., 546 F. Supp. 666, 671 (N.D. Ga. 1982) (citing Brown v.
Techdata Corp., Inc., 234 S.E.2d 787, 790 (Ga. 1977)).
Plaintiffs argue that “two things are clear from the Supplemented
Documents: Defendants failed to pay any commissions to Plaintiffs, or for that

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The Court also rejected Plaintiffs’ “redefinition” argument, which the
Plaintiffs attempt to reargue here. Dkt. No. [154] at 19-20 (rejecting the argument);
Dkt. No. [157] at 7 (restating the argument). As that argument has previously been
rejected, the Court adopts its previous rejection of that argument here.
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matter, remuneration to Comco, despite the fact that Defendants received
significant revenue from sales by the Distribution Network of FMS Products.”
Dkt. No. [157] at 5-6. Thus, Plaintiffs argue, Reynertson’s statements that Brill
would continue to receive commissions and would not need a new agreement
were false. See Dkt. No. [157] at 5-6.
However, after reviewing the supplemental briefing, the Court finds that
Plaintiffs’ additional evidence does not support a fraud claim against the
Defendants. The record evidence reveals that Defendants paid Comco pursuant
to their duties under the Management Agreement. See, e.g. Dkt. No. [159-3]
(outlining the “wire transfers that Comco received after Aug[.] 1, 2008" from
FMS). And, under the Agreement, that was all FMS was obligated to do for
Brill’s payment purposes. See Agreement, Dkt. No. [127-28] at 3 (stating that
Comco, “not FMS, shall be solely responsible for . . . any and all payments to
Brill for consulting services, royalties and any other amounts due Bill from
[Comco] as contemplated in the [Brilliant-Comco Agreement].”).
As well, because Comco retained the obligation to pay Brill, once FMS
paid Comco for Distribution Network sales, Comco had the funds to pay Brill;
thus, any payment obligation FMS owed was discharged. Whether Brill was
ultimately paid, however, was not within the Defendants’ control and that
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liability lay with Comco. Therefore, there is no evidence that Reynertson made
a misrepresentation when he stated Brill’s rights were unaffected by the
Management Agreement as FMS satisfied all of its obligations to facilitate
Brill’s payment. Before or after the Management Agreement, if Brill was not
paid and Comco had received the sales payments, Comco was liable for the
non-payment.. Accordingly, Defendants’ motion is GRANTED.
As well, because all of Plaintiffs’ claims have been dismissed, Plaintiffs’
derivative accounting, injunction, punitive damages, and attorney’s fees claims
are also DISMISSED.
Conclusion
Defendants’ Motion for Summary Judgment [127] is GRANTED.
Accordingly, this suit is now limited to Defendants’ counterclaims. The parties
are DIRECTED to file a joint, proposed pre-trial order within 30 days of this
Order.
SO ORDERED, this 6th day of August, 2012.

_______________________________
RICHARD W. STORY
UNITED STATES DISTRICT JUDGE

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