GJ&L, Inc. v. CNH Industrial America, LLC

Filing 50

ORDER denying 17 Motion for Partial Summary Judgment. Signed by Judge Dudley H. Bowen on 7/9/2018. (pts)

f^led
AcGL'o'A .
IN THE UNITED STATES DISTRICT COURT FOR THE

COUR

SOUTHERN DISTRICT OF GEORGl2J18 JUL-9 PH k; 28
AUGUSTA DIVISION

GJ&L, INC.,

SO. D;/r li
Plaintiff,
CV 117-179

V.

CNH INDUSTRIAL AMERICA, LLC,
Defendant.

ORDER

Before

Summary

the

Court

Judgment.

Defendant

notice

is

(Doc.
of

Plaintiff's

No.

the

17.)

Motion

The

for

Clerk

Partial

has

summary judgment motion

given

and

the

summary judgment rules, of the right to file affidavits or
other

materials

default.

in

opposition,

(Doc. No. 18.)

and

the

consequences

of

Therefore, the notice requirements

of Griffith v. Wainwriaht, 772 F.2d 822, 825 (11th Cir. 1985)

(per curiam), have been satisfied.

The motion has been fully

briefed and is ripe for decision.

I.

BACKGROUND

This case arises out of Plaintiff GJ&L, Inc.'s dealership

agreement

with

Defendant

CNH

Industrial

America,

LLC.

Defendant is the manufacturer of four heavy equipment brands:

Case

IH

Agriculture;

Case

Construction;

New

Holland

Agriculture; and New Holland Construction. (BansenAff., Doc.
No. 19-1, H 4,)

On December 31, 2008, Plaintiff entered into

an agreement with Defendant
Plaintiff

agreed

dealership.

to

open

Dealership Agreement") whereby
a

Case

Construction

Equipment

(Doc. No. 5-1, at 13.)

Under the terms of the Dealership Agreement, Plaintiff

was authorized to operate two dealerships: one in Augusta,

Georgia, and one in Pooler, Georgia.^
Bansen Aff. SI 27.)

(Doc. No. 5-1, at 14;

Plaintiff needs Defendant's permission

before opening a new dealership or moving to a different
location.

(Bansen Aff. SI 4.)

Plaintiff must also provide

warranty services on any of Defendant's products, regardless
of where that product was sold.

(Id. SI 6(g).)

Defendant,

however, reimburses Plaintiff for such services. (Id. SI 11.)

In January 2017, Defendant received notification that
Plaintiff wanted to move its Pooler dealership to Savannah,

Georgia.

(Arrowood Supp. Aff., Doc. No. 17-2, SI 7.)

Yet

Defendant refused to agree until Plaintiff signed an updated
dealership agreement.

(Id. SI 18)

Plaintiff alleges that the

new dealership agreement included terms that gave Defendant
greater control over Plaintiff's dealerships.

(Id. SI 19.)

Consequently, Plaintiff refused to sign. (Id.) Nevertheless,
Plaintiff

opened

dealership.

and

continues

(Bansen Aff. SI 35.)

to

operate

its

Savannah

In November 2017, after

^ Although the Dealership Agreement contemplated that Plaintiff's second
dealership would be located in Savannah, Georgia, Defendant subsequently
allowed Plaintiff to open its dealership in Pooler. (Doc. No. 5-1, at 14;
Bansen Aff. 1 27.)

learning that

Plaintiff opened

its

Savannah

dealership,

Defendant informed Plaintiff that its actions violated the

terms of the Dealership Agreement.
Defendant's

notice,

Savannah dealership.

Plaintiff

(Id.)

continued

(Id. SI 36.)

Undeterred by
to

operate

the

Defendant responded by

refusing to reimburse Plaintiff for warranty services provided
on equipment sold at the Savannah dealership. (Arrowood Supp.
Aff. SI 25.)

Plaintiff initiated this action on November 16, 2017, in

the Superior Court of Richmond County, Georgia. (Compl., Doc.
No. 1-1, at 7-8.)

Plaintiff alleges that Defendant's refusal

to approve the Savannah dealership violates Georgia law. (Am.
Compl., Doc. No. 11, SI 73.)

Defendant removed the case to

this Court on December 27, 2017.

moves for

(Doc. No. 1.)

Plaintiff now

partial summary judgment finding that (1) the

Dealership Agreement is subject to Georgia's Regulation of
Agricultural

Equipment

Manufacturers,

Distributors,

and

Dealers (the ^'Agriculture Act"), O.C.G.A. § 13-8-11, at sag.
and that (2) Defendant has violated the Agriculture Act by

refusing to approve Plaintiff's Savannah dealership.

II.

LEGAL STANDARD

A motion for summary judgment will be granted if there is

no disputed material fact and the movant is entitled to
judgment as a matter of law.

Fed. R. Civ. P. 56(a).

Facts are

material if they could affect the results of the case.
Anderson v. Libertv Lobbv. Inc., 477 U.S. 242, 248 (1986).

The court must view facts in the light most favorable to the

non-moving party and draw all inferences in its favor.
Matsushita Elec. Indus. Co.. Ltd. v. Zenith Radio Corp., 475

U.S. 574, 587 (1986).

The movant initially bears the burden

of proof and must demonstrate the absence of a disputed
material fact.

(1986).

Celotex Corp. v. Catrett, 477 U.S. 317, 323

The movant must also show that no reasonable jury

could find for the non-moving party on any of the essential
elements.

Fitzoatrick v. City of Atlanta, 2 F.3d 1112, 1115

(11th Cir. 1993).

If the movant carries its burden, the non-moving party

must come forward with significant, probative evidence showing
there is a material fact in dispute.

Id. at 1116.

The non-

movant must respond with affidavits or other forms of evidence

provided by Federal Rule of Civil Procedure 56.
n.3.

The

non-movant

cannot

survive

summary

Id. at 1116
judgment

relying on its pleadings or conclusory statements.
Ross. 663 F.2d 1032, 1033-34 (11th Cir. 1981).

by

Morris v.

After the non-

movant has met this burden, summary judgment is granted only

if ^^the combined body of evidence is still such that the
movant would be entitled to a directed verdict at trial - that

is, such that no reasonable jury could find for the nonmovant."

Fitzoatrick, 2 F.3d at 1116.

III.

The

Agriculture

manufacturers

and

Act

dealers

DISCUSSION

was
of

designed

to

agricultural

regulate

equipment

to

prevent, inter alia, unfair business practices and methods of
competition. O.C.G.A. § 13-8-11. To advance those goals, the

Agriculture
unreasonable

Act

forbids

restrictions

manufacturers
on

dealers

from
and

dealership agreements without due cause.

imposing

terminating

O.C.G.A. § 13-8-

15(c)(3)(A)-(8.2). It applies to manufacturers and dealers of

^^equipment," which in turn is defined as ^^tractors, farm

equipment, or equipment primarily designed for or used in
agriculture,

horticulture,

irrigation

for

agriculture

or

horticulture, and other such equipment which is considered tax
exempt and sold by the franchised equipment dealer." O.C.G.A.
§ 13-8-12(6).

The central dispute in this motion is whether

Plaintiff sells ^^equipment" as defined by the Agriculture Act.

A. Equipmexi't Primarily Designed for or Used in Agriculture

Plaintiff argues that the products it sells qualify as

^^equipment" under the Agriculture Act because the products are

^^primarily designed for or used in agriculture."

Before the

Court can decide this issue, it must determine the proper

statutory construction of O.C.G.A. § 13-8-12(6).

The adverb

^^primarily" in "primarily designed for or used in agriculture"
modifies both "designed for" and "used in."
Plaintiff's

assertion,

traditional

rules

statute.

of

such

grammar

a

construction

and

does

not

Contrary to
follows

the

re-write

the

See. e.g.. The Chicago Manual of Style § 5.242 (17th

ed. 2017) (describing parallel construction).

Indeed, other

courts that were confronted with similar language have come to
the same conclusion.

See, e.g.. State v. Pacelli. 2015 WL

3869744, at *4 (Kan. Ct. App. June 12, 2015) ("Because the

adverb was placed before two verbs used in the disjunctive
(or), common sense tells us that this adverb necessarily
modifies the two verbs following it."); In re Estate of Luoma.

2013 WL 221446, at *4 (Ohio Ct. App. Jan. 22, 2013) (same).
Therefore, to be within this clause. Plaintiff must show that

the products it sells are equipment primarily designed for or
primarily used in agriculture, horticulture, irrigation for

agriculture or horticulture, and other such equipment.^
Defendant has raised a genuine factual issue about the

^ Plaintiff concedes that the products it sells are not primarily designed
for agriculture.

(Doc. No. 23, at 2 n.l.)

primary use of the products Plaintiff sells.
opposition

to

Plaintiff's

Motion

for

To support its

Summary

Judgment,

Defendant filed records from its Electronic Settlement System

(the ^"System").
1.)

(Bansen Aff.

SISl 14-16; Doc. No. 19-1, Ex.

The System allows Defendant to track how customers use

its products.

(Bansen Aff. SI 15.) After each sale. Plaintiff

must designate how the customer intended to use Defendant's
product by selecting and entering the appropriate code. (Id.)

Records from the System show that only 1.3% of Plaintiff's
sales were designated for use in agriculture. (Doc. No. 19-1,
Ex. 1, at 1, 11, 14-16, 18, 27, 29-31.)

Plaintiff responds

that the System was poorly designed and that Plaintiff entered
the code ^^other construction" for every sale as a way to shirk

its reporting duty. (Arrowood Supp. Aff.

6-10.) Plaintiff

submits records showing that all of its entries in the System
were ^^other construction" and accuses Defendant of forging any

sale that was designated for use in agriculture.

Plaintiff's

records and allegations of forgery are of little consequence

for the purposes of summary judgment.

Accepting Plaintiff's

explanation and disregarding Defendant's evidence would amount
to a credibility determination, which is inappropriate at this
stage.

See Liberty Lobby, 477 U.S. at 249-50.

Accordingly,

Plaintiff has failed to demonstrate the absence of a disputed

material

fact

as

to

whether

the

equipment

it

sold

was

primarily used in agriculture, horticulture, irrigation for
agriculture or horticulture, and other such equipment.

B.

Other Such Equipment which is Considered Tax Exempt

Plaintiff also claims that the products it sells are tax

exempt and therefore qualify as equipment under the clause

^'other such equipment which is considered tax exempt."
O.C.G.A. § 13-8-12(6).

See

Plaintiff asserts that this clause

creates a category of equipment independent from ^^equipment

primarily designed for or used in agriculture."

Plaintiff's

strained reading isolates the clause from its context in the
statute. The definition of equipment in O.C.G.A. § 13-8-12(6)

creates three categories: (1) tractors, (2) farm equipment, or

(3) equipment primarily designed for or used in agriculture,
horticulture, irrigation for agriculture or horticulture, and
other such equipment which is considered tax exempt and sold

by the franchised equipment dealer.

Treating ^^other such

equipment which is considered tax exempt" as an independent
category

ignores

the

conjunction

"or"

separating

"farm

equipment" and "equipment primarily designed for or used in."
It also ignores

the

word "such," which

ties the

phrase

"equipment which is considered tax exempt" to "equipment
primarily designed for or used in agriculture, horticulture,
irrigation for agriculture or horticulture."

8

A more convincing reading is that ^'other such equipment
which is considered tax exempt" refers to equipment used in

practices

similar

to

"agriculture,

horticulture,

irrigation for agriculture or horticulture."

[or]

To fall under

this clause. Plaintiff must demonstrate that the products it

sells are primarily used for such purposes.

As previously

mentioned, the primary use of the products Plaintiff sells is
a

genuine

factual issue

that

cannot

be

answered

through

summary judgment.

IV.

CONCLUSION

According to the plain language of O.C.G.A. § 13-8-12(6),
there are only three kinds of equipment that fall under the

Agriculture Act.

Because Plaintiff is unable to establish as

a matter of law that it sells such equipment, summary judgment
is not appropriate.

Upon due consideration, Plaintiff s Motion for Partial
Summary Judgment (doc. no. 17) is DENIED.
ORDER ENTERED at Augusta, Georgia, this

day of

2018.

UNITED STATES DISTRICT JUDG