FI RST DI VI SI ON

BA RNES, P. J.

, M CM I LLI A N and R EESE, JJ.

N O T IC E : M otions for r e c ons i de r a tion m us t be ph y sic a l ly r e ce iv ed i n our c le r k ’s offic e w ithin te n da y s of the da te of de c is ion to be de e m ed tim e ly file d.

http://w w w .ga a ppe a l s .us /r ule s

October 19, 2018



# I n th e Co u r t o f

A p p eals o f

G eo r g ia

A1 8 A 1 3 0 5

. D. J

. POW E RS COM PANY, INC. v

. PEACHTREE PLAYTHINGS, INC.

B A R N E S , Pres i d i n g J ud g e.

Peach t ree Pl ay th i n g s , In c., an i m po rt er o f o rg an i c s u g ar fro m Brazi l

, ret ai n ed

D. J

. Po wers Co m

pan y , In c. t o act as i t s cu s t o m s bro k er t o fi l e en try d o cu m en t s wi th

t h e U. S. Cu s t o m s an d Bo rd er Pro t ect i o n (“ CBP”). Aft er s ev eral fi l i n g s s u b m i t t ed to

t h e CBP fai l ed t o i n cl u de req u i s i t e s u g ar cert i fi cat e in fo rm at i o n , t h u s res u l t i n g in

ad d it i o n al d u t i es b ei n g as s es s e d

, Peach tree Pl ay t h i n gs (h erei n aft er, t h e “ Su g ar

Im p o rt er”) s ued D. J

. Po w ers Co m p an y (h erei n aft er, t h e “ Cu st o m s Bro k er”) fo r g ro ss

ne gl i g en ce, p u ni t i v e dam ag es , an d at t o rn ey fees

. Th e Cu s to m s Bro ke r sought, but w a s

d en ied

, su m

m ary ju d g m en t

. Becau s e t h e reco rd rev eal s t h at t h e Cu s t om s Bro k er was

en t i t l ed t o s u m

m ary ju d gm en t o n al l cl ai m s p u rs ued , we rev ers e.Su m

m ary j u d gm en t i s p ro p e r “ i f t h e pl ead i n gs , d ep o s i ti o n s , an s wers to

i n t erro g at o ri es , an d ad m i ss io n s o n fi l e, t o g et h er wi t h t h e affi d av i t s , i f an y , sh o w t h at

t h ere i s no g en u in e i s s ue as t o an y m at eri al fact an d th at t h e m ov i n g p art y i s en t i t l ed

t o a ju d g m en t as a m at t er o f l aw.” OCGA § 9 -1 1 -5 6 (c). “ W e rev i e w t h e d en i al o f

s u m m ary ju dg m en t de n o v o, vi ewi n g th e ev i d en ce a n d al l reas o n ab l e i n feren ces

t h erefro m i n t h e l ig ht m o s t fav o rab l e t o t h e n o n m o v i n g p art y .” No r t o n v. Bu d g et R en t

A Ca r S ys t em , 3 07 Ga. Ap p

. 5 0 1

, 5 0 1 (7 0 5 SE2 d 3 0 5 ) (2 0 1 0 ). So v i ewed t h e reco rd

s h o ws t h e fo l l o wi n g

.

Th e Pr o ces s o f Imp o r t i n g

Or g a n i c S ug a r

Im p o rt i n g org an i c s u gar i n t o t h e Un i t ed St at es , as t h e Cu s to m s Bro k er’ s

Pres i d en t an d CEO d es cri b ed

, i s a t wo -s tep p ro ces s. Fi rs t, u p o n arri val at a Un i t ed

St at es p o rt

, t he s u g ar i s “ en t ered ” i n t o a b o nd ed wareh o us e; s eco nd

, t h e s u g ar i s

wi t h d rawn fro m t h e wareh o u s e an d th ereb y “ en t ered ” i n t o t h e Un i t ed St at es ’

co m m erce. At b ot h s t ep s , an i m p o rt er of s uch pro d u ct i s req u i red to fi l e an “ en t ry ”

fo rm wi th t h e CBP. An y

i m p o rt d u t i es t h at are o wed m u st b e p ai d at t h e t i m e o f t h e

wi t h d rawal en t ry

.

It i s u n d is p ut ed t h at t h e o rg an i c su g ar co n s ti t ut es a “ s p eci al t y s ug a r , ” an d as

s u ch

, is s u b

ject t o a t ari ff-rat e qu o t a. A cco rd i n g ly

, a l i m i t ed am o u n t (“ q u o t a” am o u n t )

2o f s p eci al t y s u g ar m ay b e im p o rt ed at a l o wer d u t y rat e, wh i l e al l am o u n t s ab o v e t h at

l i m i t are ch arg ed at a h i gh er rat e. Th e q u o t a am o un t i s ad m i t t e d on l y d u ri n g

d es i g n at ed i n t erv al s (“ t ran ch es ”), wh i ch are fi l l ed o n a “ fi rs t co m e, fi rs t s erv ed ” b as i s

.

To recei v e t h e l o wer du t y rat e, i m p o rt ers h o ld t hei r su g ar in b o nd ed wareh o u s es an d

wai t u n t i l a t ran ch e o p en s t o en t er t hei r p ro d u ct i nt o t h e Un i ted St at es ’ co m m erce.

W h en ap p l y i ng fo r a t ran ch e en t ry , an i m p o rt er o f s peci al t y

s u g ar i s req u i red

t o s h ow CBP t hat it s s u g ar pro du ct q u al i fi es as “ s p eci al t y su g ar.” Th e i m p o rt er d o es

t h i s b y p res en ti n g t o CBP a co p y o f i t s “ s u g ar cert i fi cat e,” 1 a let t er i s s u ed b y t h e U.S.

Dep art m en t o f Ag ri cu l t u re cert ify i n g t hat t h e s u gar h as been t es ted an d m eet s cert ai n

q u al i fi cat i o n s

. It i s un d i s p u t ed t h at t h e Su gar Im p o rt er o b t ai ned a s u gar cert i fi cat e fo r

i t s p ro du ct

. 2

Th e Cu s t o ms Br o ker ’s S er vi ces t o t h e S

ug a r Imp o r ter

1 It i s u nd i s p u t ed t hat s t art i n g i n 2 0 1 3

, CBP i s s u ed b u l l et in s (wh i ch were m ad e

av ai l ab l e t o t h e Cu s t o m s Bro ker an d o t h er p art ici p an t s o f t h e rel ev an t i nd u st ry ) o f t h e d at e u p on wh i ch cert ai n fi l i n g s wo u l d b e req u i red t o in cl u d e s u ch cert i fi cat es , el s e t h e fi li n g wo u l d b e reject ed

, an d t he i m p ort er wo u l d “ ri s k t he q u o t a b ei n g cl o s ed .”

2 T h e c e rt i fi cat e rei t erat ed t h at a co p y o f t h e cert i fi cat e m u s t b e p res en t ed to
CBP wh en t h e s p eci al t y s u g ar en t ers t h e Un i t ed St at es Cu s t o m s T e r r i t o ry an d t h at

“ en t ry o f s peci al t y s u g a r [ i s ] o n a fi rs t -co m e, fi rs t -s erv ed b as is u n t i l each s p eci al t y

s u g ar t ran ch e h as b een fu ll y s u b s cri b ed .”

3To n av i g at e t h e tas ks o f fi l i n g , am o n g o t h er t h i n g s , wi t h d rawal en t ri es fo r i t s

o rg an i c s u g ar b efo re th e l o wer d u t y t ran ch es fi ll ed

, 3 t he Su g ar Im p ort er en g ag ed t h e

Cu s t om s Bro k er. 4 To t hat e n d

, 5 i n M arch 2 0 1 4

, t h e Su gar Im p o rt er ex ecu t ed a “ US

Cu s t om s Po wer o f At t o rn ey ” (“ POA”) ap p o in t i n g th e Cu s t o m s Bro k er to “ act fo r an d

o n b e h a l f as a t ru e an d l awfu l ag en t an d at t o rn ey ” o f t h e Su g ar Im p o rt er t o , am o n g

o t h er t h in g s , “ m ak e, en d ors e, s i g n , d ecl are or s wear t o an y Cu s t o m s en t ry ,

wi t h d rawal

, d ecl arat i o n , cert i fi cat e, b i l l o f l ad i n g , carn et

, s ecu ri t y fi l i n g o r an y o t h er

d o cu m en t s req u i red b y law o r reg u l at i o n i n co n nect i o n wi t h t he i m p o rt at i o n,

ex p ort at i o n , o r t ran s p o rt at i o n [ ] o f an y m erch an d is e.

. . . ” T h e POA ex p res s l y

i n co rp o rat ed “ Term s an d Co n d i t i o n s o f Serv i ce,” a s ep arat e d ocu m en t s et t i n g fo rt h

cl au s es t h at pert ai n ed t o m at t ers s u ch as i n s u ran ce, g o vern i n g l aw, reco rd -k eep i n g,

an d t h e Cu s t o m s Bro k er’ s li m it ed l iab i l i t y

. Su b s eq u en t l y , t h e Su g ar Im p ort er al s o

3 As t h e Su g ar Im

po rt er’ s co un s el ack no wl ed g ed at t h e su m m ary ju d g m en t
h eari n g , “ Th e reas o n [t h e Su g ar Im p o rt er] en g ag ed t h e ex p ert

, [t h e Cu st om s Bro k er]

,

. . . i s s o th at th ey wo u l d fal l wi th i n t h e t ran ch e an d s av e [m o n ey ] b y h av i n g t h e l o wer d u t y .”

4 Th e Cu s t o m s Bro k er ci tes Un i t ed S t a tes v. Y i p , 9 3 0 F2 d 1 4 2

, 1 4 3 -1 4 4 (2 d Ci r. 1 9 9 1 ), as p ro v id i n g a b ri ef ex p l an at io n o f cu s to m s b ro kerag e s erv i ces

.

5 Befo re a cu s t om s bro ker i s al l o wed t o t ran s act cu s t o m s b u s i n es s i n th e n am e

o f i t s pri nci p al

, th e b ro k er “ i s req u i red t o o b tai n a v al i d p o wer o f at t o rn ey t o d o s o.”

1 9 CFR 1 4 1 .4 6

.

4p ro v id ed t o th e Cu s t om s Bro k er a co p y o f i ts s u g ar cert i fi cat e, wh ich s t at ed t h at t h e

Su g ar Im p o rt er was p erm i t t ed t o en t er i t s p ro d u ct at t h e l o wer t ari ff rat e o n s p eci fi ed

d at es , t h e l as t o f wh i ch was t he t ran ch e d at e at i s s u e h ere, J u l y 1 0 , 2 0 1 5

.

Th ereaft er, as a Cu s t o m s Bro ker’ s em p l o y ee as s i gn ed t o wo rk o n t he Su g ar

Im p o rt e r ’s a cco u n t recal l ed

, t h e Su g ar Im p o rt er’ s su g ar was “ wareh o u s ed an d

wi t h d rawn as po s s i b l e, as al l o wed b y t h e q u o t a o p en i n g s .” E lab o rat i n g o n t he l at t er,

t h e em p l oy ee ex p l ai ned t hat t o q u al i fy fo r s u ch an o p e n i n g , an y wi th drawal en t ry

n eed ed t o h av e b een fi l ed wi t h CBP wi t h i n a n arro w t i m e wi n d o w.

Up o n recei v i n g i n st ru ct i o n s fro m t h e Su g ar Im p o rt er, t h e Cu s t o m s Bro k er

s u cces s fu l ly fi led w i th CBP en t ri es , i n cl u d i n g q uo t a wi t h drawal en t ri es

. Bu t o n J u l y

1 0

, 2 0 15

, al l fi v e q u o t a w i th d rawal en t ri es s u b m i t ted b y t h e Cu s t o m s Bro k er were

reject ed b ecau s e, as CBP n ot at ed b ack t o t h e Cu s t o m s Bro k er, th e “ s u g ar cert i fi cat e

i n f o r m a t i o n w as n ot p ro p erl y t ran s m i tt ed

. ” Sp eci fi cal l y , th e Cu s t o m s Bro k er h ad

n ei t h er pro vi d ed a co p y o f t h e Su g ar Im p o rt er’ s s u g ar cert i fi cat e to CBP, n o r i n cl u d ed

t h e s u gar cert i fi cat e n u m

b er o n t h e wi t h d rawal en t ri es s u b m i t t ed t o CBP. By t h e t i m e

t h e Cu s t o m s Bro ker

– wh i ch

, acco r d i ng t o i t s p res i d en t an d CEO, was ex p eri en ced

wi t h raw s u g ar, b ut n o t wi t h s p eci al i t y s u gar pri o r t o i t s en g ag em en t w i t h t h e Su g ar

Im p o rt er

– as cert ai n ed t h e cru x o f t h e p ro bl em an d su b m i t t ed co rrect ed fo rm s wi th

5t h e req u is i t e s u gar cert i fi cat e (i n fo rm at i on ), 6 t h e t ran ch e h ad cl o s ed

. T h e Su g ar

Im p o rt er’ s p ro d u ct co u l d b e wi t h d rawn i m m ed i at el y o nl y at t h e h i g h e r d u t y r a t e.

Gi v en t h e Su g ar Im

p o rt er’ s fo recas t o f t he n eed s o f i t s o w n cu s t o m er, Co s t co , t h e

Su g ar Im p ort er el ect ed t o p ay

t h e ad d i t io n al d u t i es o f $ 1 0 8 ,8 9 1 .3 4.

Un d er l yi ng Li t i g a t i o n

To reco v er t h e ad d it i o n a l d u t i es p ai d

, t h e Su g ar Im p o rt er s u ed t h e Cu s t o m s

Bro ker o n a s i n g l e s ub st an t i v e t h eo ry o f g ro s s n eg l i g en ce al l eg in g ,

[ T h e Cu s t o m s Bro k er] h ad a d u t y t o p ro v i d e reas o nab l y co m p et en t

Cu s t o m s b ro kerag e s erv i ces t o [t h e Su g ar Im p o rt er]

, an d t o reas o n ab l y

en s u re t h at [t h e Cu s t o m s B r o k er’ s ] act i on s were i n co m p l i an ce w i t h

Cu s t o m s ru l e s , d irect i v es , an d p ract i ces

. . . . [Th e Cu s t o m s Bro k er]

b reach ed i t s d u ty t o [t h e Su g ar Im po rt er] by fai l i n g t o e x e r c i se ev en

s l ig h t d i li gen ce i n fi l i n g t h e W i t h d rawal s

. . . . As a di rect an d p ro x i m at e

res u lt o f [t h e Cu s t om s Bro k er’ s ] gro s s neg l i g en ce, [t h e Su g ar Im p o rt er]

i n cu rred ad d i t io n al d u t y

l i ab i l i t y .[ 7 ]

Th e Su gar Im

p ort er al l eg ed ad d i t i o n al cl ai m s fo r pu n i t i v e d am ag es an d at to rn ey fees

.

6 T h e reco rd s h o w s th at t h e Cu s to m s Bro k er h ad p rev i o u sl y fi l ed s p eci al t y

s u g ar en t ri es o n b eh al f o f t h e Su g ar Im po rt er wi t h o u t i n cl u d in g t h e s u gar cert i fi cat e, b u t CBP p ers o nn el

, wh o ap p aren t l y had t h e s ug ar c e r t i f i c a t e n u m

b er, ch o s e to
h an dwri t e t h e m i s si n g i n fo rm at i o n o n t he s u b m i tt ed fo rm s

.

7 Fo r p urp o ses o f it s co m

p l ai n t

, t h e Su gar Im

p o rt er d es i g n at ed “ U. S. Cu s t o m s

an d Bo rd er Pro t ect i o n ” as “ Cu st o m s .”

6Aft er d i s co v ery , th e Cu s t o m s Bro k er fi l ed a su m m a r y ju d g m en t m o t i o n

. It

reci ted t h e Su g ar Im

p o rt er’ s al l eg at i on t h at “ [ t h e Cu s t o m s Bro k er] had a d u t y to

p ro v id e reas o n ab l y co m

pet en t Cu s t o m s b ro k erag e s erv i ces t o [t he Su g ar Im p o rt er] .”

Th e Cu s t o m s Bro k er p o s i t ed t h at t h e d u t y t o p ro v i d e cu s t o m s b ro k erag e serv i ces h ad

b een b arg ai n ed fo r b et ween th e p art i es an d m em ori al i zed p u rs u an t t o t h e P O A. 8 It

t h erefo re as s ert ed t hat t h e d u ty t h at it al leg ed l y b reach ed aro s e d i rect l y fro m , an d n ot

i n d ep en den t o f, t h e p art i es ’ co nt ract

.

Gi v en t he prem i s e t h at a co n t ract u n d erl ay each o f t h e fi v e CBP fi l i ng s

co m p l ai n ed o f in t h is cas e, th e Cu s t o m s Bro k er wen t o n t o a r g u e t h a t t h e Su g ar

Im p o rt er co u ld n o t reco v er u n d er a t o rt cl ai m wi t h o u t a s h o w i n g th at an i n d ep en d en t

d u t y h ad al s o b een b reach ed

. T h e C u s t o m s Bro k er fu rt h er arg u ed t h at

, becau s e t h e

cl ai m ed l o s s es were pu rel y eco n o m i c, t h e Su g ar Im p o rt er’ s t o rt cl ai m was b arred by

t h e eco no m i c l o s s ru l e. Th e Cu s t o m s Bro k er at t ack ed t h e p u n i t i v e d am ag es cl ai m as

8 See 1 9 CFR 1 1 1 .1 (d efi n i n g “ cu s t o m s b ro k er” as “ a p ers o n wh o is l i cen s ed

. . . t o t ran s act cu s t o m s b u si n es s o n b eh al f o f o t h ers ”; d efi n i n g “ p ers o n ” as

“ i n cl u d [i n g ] i n d i v id u al s , p art n ers h i p s , as s o ci at i o n s , an d co rp o rat i o n s ”; an d d efi n i n g

“ cu s t o m s b u s i n es s ” as “ i n cl u d[i n g] t h e p rep arat i o n , an d act i v i t i es rel at i n g t o t h e

p rep arat i o n , o f d o cu m en ts i n an y fo rm at an d t he e le c t ro ni c t ran s m i s si on o f d o cu m en t s

an d p art s o f d ocu m en ts i nt en d ed t o b e fi led wi t h CBP i n fu rt h e ran ce o f an y o t h er

cu s t o m s b u s i n es s act i v i t y ”). T h ere i s no d i s p u t e t h at

, at al l t i m es rel ev an t

, t h e Cu s t om s Bro ker was a l icen sed cu s t o m s b ro k er fo r p u rp o s es o f 1 9 CFR 1 1 1 .1

.

7i m

p ro p er o n g ro u n ds t hat t h ere was n o en t i t l em en t to co m pen s at o ry d am ag es , 9 an d

t h at t h ere was n o al l eg at i o n of m al i ce, frau d

, o r wi l l fu l m i s co n d uct

. 1 0 T h e Cu s t o m s

Bro ker at t ack ed t h e at t o rn e y f e es cl ai m as i m

p ro p er o n g ro un d s t h at s u ch an ci ll ary

cl ai m t hu s h ad n o s u p p o rt i ng s u b st an t i v e cl ai m an d t h at

, at an y r a t e , t h e Su g ar

Im p o rt er h ad fai l ed t o i d en t i fy a s t at u t o ry

b as i s fo r s u ch an award

.

Al t ern at i v el y , t h e Cu s to m s Bro k er arg u ed t h at t o t h e ex t en t it co ul d b e h el d

l i ab l e, i ts l i ab i l i t y was cap p ed at $ 2 5 0 b y li m i t at i o n o f l i ab i l i t y cl au s es s et fo rt h i n t h e

Term s an d Co n d i t i o n s o f Serv ice d o cu m en t

. 1 1

9 “ A cl ai m fo r p u n i t i v e d am ag es h as effi cacy o nl y i f t h ere i s a v al i d cl ai m fo r

act u al dam ag es t o wh i ch i t co u l d at t ach

. Pu n it i v e d am ag es m ay n ot b e reco v ered

wh ere t h ere i s n o en t i t l em en t t o co m p en s at o ry d am ag es .” (Ci t at io n an d pu n ct u at i o n

o m it t ed .) S

o u t h er n G en

. In s

. Co

. v. Ho l t

, 2 6 2 Ga. 2 6 7

, 2 7 0 (2 ) (4 1 6 SE2 d 2 7 4 ) (1 9 9 2).

1 0 “ Neg l i g en ce al o n e, ev en g ro s s n eg li g en ce, i s i n s u ffi ci en t t o s u p p o rt p u n i t i v e d am ag es .” MDC B l a cks hea r

, LLC v. Li tt el l

, 2 7 3 Ga. 1 6 9

, 1 7 3 (4 ) (5 3 7 SE2 d 3 5 6 ) (2 0 0 0); s ee al s o Y

o u n g v. T u rn er Her i t a g e H

o mes , 2 4 1 Ga. Ap p

. 4 0 0

, 4 0 1 (2 ) (5 2 6

SE2 d 8 2 ) (1 9 9 9 ) (s am e).

1 1 Th e C u s t o m s Bro k er p o i nt ed t o t h e Term s an d Co n d it i on s o f Serv i ce d o cu m en t

, wh ich p ro v i d ed t h at i t s “ l iab i l i t y s h al l b e l i m i t ed t o th e fo l l o wi n g :

. . . [W ] h ere t h e cl ai m ari ses fro m act i v i t i es rel at i n g to ‘ Cu s t o m s b u s i n es s,’ $ 5 0 per en t ry

o r t h e am o un t o f b ro k erag e fees p ai d t o [t h e Cu s t o m s Bro k er] fo r t h e en t ry wh i ch ev er i s l es s .” Th e Cu s t om s Bro ker p o i n t ed al s o t o l an g u ag e t h erei n t h at “ i n no ev en t s h al l [t he Cu s t o m s Bro k er] be l i ab le o r res p o n s i b l e fo r co n s eq u en t i al

, i n d i rect

, i n ci d en t al

,

s t at u to ry , o r p u n i t i v e d am ag es , ev en i f i t h as b een p u t o n n ot i ce o f t h e p o s s ib i l i t y o f

s u ch dam ag es .”

8Op p os i ng t h e s u m m ary j u d g m en t m o ti o n , t h e Su g ar Im p o rt er p o s i ted t h at t h e

POA an d Term s an d Co n d i t i on s o f Serv i ce do cu m en t “ co u ld n ot fo rm t h e b as i s o f a

b reach o f co n t ract cl ai m ” fo r reas o n t h at t hey au t h o ri zed

, b u t d id no t o b l i g at e, t h e

Cu s t om s Bro ker t o do an y act o n i t s b eh al f. In p art i cu lar, t h e Su g ar Im p o rt er as s ert ed

t h at n ei t h er d o cu m en t sp eci fi ed wh at t o fi le, wh en t o fi l e, wh ere t o fi l e, o r h o w t o fi l e.

M o reo v er, t h e Su gar Im

p ort er cl ai m ed t h at t h e Cu st o m s Bro k er o wed i t d u t i es as i t s

ag en t. 1 2 Hen ce, t h e Su g ar Im p o rt er cl ai m ed th at it s gro s s n eg l i g en ce cl ai m was

p erm i s s i b l e a n d n o t b arred b y t h e eco n o m i c lo s s ru l e. Th e Su g ar Im p o rt er fu rt h er

c o n t e n ded t h at a fi n di n g o f g ro s s n eg li g en ce wo u l d ren d er t h e ci t ed li m i t at i o n o f

l i ab i l i t y cl au s es vo i d as vi ol at i v e o f Geo rg i a’ s p ub l i c p o l i cy t h at “ ex cu l p at o ry cl au s es

d o n o t rel i ev e a part y fro m l i ab i l i t y fo r act s o f g ro ss n eg l ig en ce o r wi l fu l o r wan t o n

co n d uc t. ” ( F ootnote s o m itte d

. ) Co l on i a l Pr o p er t i es R ea l t

y v. Lo wd er Co n s t r

. , 2 5 6 Ga.

Ap p

. 1 0 6

, 1 1 2 (5 ) (5 6 7 SE2 d 3 8 9 ) (2 0 0 2 ). Th e Su g ar Im p o rt er t h u s as s ert ed t h at i t s

Th e Cu s t o m s Bro k er ci t ed i t s ch arg e o f $ 1 3 5 p er en t ry , an d t h at t h ere were fi v e

en t ri es co m

p l ai n ed of. Hen ce, as t h e Cu s t o m s Bro k er cal cu l at ed

, it s l i ab i l i t y , i f an y ,

was cap p ed at $ 25 0

.

1 2 Th e Su gar Im

p o rt er al s o as s ert ed t hat

, b ecau s e t h e Cu st o m s Bro k er p ro v i d ed

i t s “ s k il l ed s erv ices ” rel at in g t o t h e i m p o rt bu s in es s , t h e (s ep arat e) d u t y un d erl y i n g

p ro fes s i on al n eg l i g en ce act i o n s ap pl i ed

.

9an ci l lary cl ai m s fo r p u n i t iv e d am ag es an d at t o rn ey fees were p ro p er, an d i d en t i fi ed

OCGA § § 1 3-6 -1 1 an d 5 1 -1 2 -7 as t h e s t at u t o ry b as es fo r t h e l at t er.

Th e t ri al co u rt co n v en ed a h eari n g

. Co u n s el fo r t h e Cu s t o m s Bro k er recap p ed

t h at t h e Su g ar Im

po rt er h ad al l eg ed a s i n g l e s u bs t an t i v e th eo ry o f g ro ss n eg l i g en ce,

ad d in g t h at s u ch t h eo ry w as l i k el y s el ect ed t o av o id t h e l iab i l i t y -l i m i t at i o n cl au s es ;

t h at n ev ert h el es s , t hi s i s “ p u rel y a cas e o f a co nt ract u al di s p u t e b et ween part i es t h at

ag reed on a s erv i ce”; t h at th erefo re, t o prev ai l o n a t o rt t h eo ry , a du t y

– i n d ep en d en t

o f t h e co n t ract u al d u t y – m u st b e s h o wn ; an d t h at t he Su g ar Im p o rt er had fai l ed to

m ak e t h at s h o w i n g

. Th e Cu s t o m s Bro k er’ s co u n s el s um m ari zed

, “ [ Th i s i s ] a

co n tract ual cas e, an d it s h o u l d b e l i t i g at ed as s uch

. Ho wev er, [t h e Su g ar Im p o rt er] h as

n o t fi l ed an y cau s e o f act i o n fo r b reach o f co n tract

. T he r e f o r e , we wo u l d as k t h e

[c] o urt fo r s u m

m ary ju dg m en t [.] ”

Th e t ri al co u rt s u m

m ari l y d en i ed t h e su m

m ary ju dg m en t m o t i on

. An d t h e

Cu s t om s Bro ker p ro cu red i n t erl o cu t ory rev iew o f t h at ru l i n g.

1

. Th e Cu s t o m s Bro k er co n t en d s t hat t h e t ri a l co u rt erred i n reject i n g i t s

d efen s e th at t h e eco n om ic lo ss ru l e b arred t h e to rt cl ai m p u rs u ed b y t h e Su g ar

Im p o rt er; t h e Cu st o m s Bro k er m ai n t ai n s th at t h e d u ty wh i ch t h e Su g a r I m p o rt er

al l eg es t hat i t b reach ed aro s e d i rec t l y f ro m , an d n o t i n d ep en d en t o f, t h e co n t ract

10en t ered i n t o b et ween t h e p art i es , an d t h at t he co nt ract was fo r i t t o p r o v i d e CBP

b ro k erag e s erv i ces

. 1 3 W e ag ree.

“ Th e p u rp o s e o f t he eco n o m i c l o s s ru l e i s t o di s t i n g u i s h b et ween t h o s e act i on s

co g n i z a bl e i n t o rt an d t h o s e t hat m ay be bro u gh t o n l y i n co n t ract

. ” (Ci t at i o n an d

p u n ct u at i o n o m i t t ed .) AS C Co n s t r

. Eq u i p

. US A v. Ci t y Co mmer ci a l R ea l E

s t a t e , 3 0 3

Ga. A p p. 3 0 9

, 3 1 6 (3 ) (6 9 3 SE2 d 5 5 9 ) (2 0 1 0 ). “ Th e ‘ eco n o m i c l o ss ru l e’ g en eral l y

p ro v id es t h at a co n t ract i n g p art y wh o s u ffers p u rel y eco n o m i c lo s s es m u st s eek h i s

rem ed y in co n t ract an d n o t i n t ort .” Gen

. El ec. Co

. v. Lo we’s Ho m e Cen t er s

, 2 7 9 Ga.

7 7

, 7 8 (1 ) (6 0 8 SE2 d 6 3 6 ) (2 0 0 5 ). “ Eco no m i c l o s s ” i n cl u d es “ d am ag es fo r

. . . t h e

co n seq u en t l o s s o f p ro fi t s , u n acco m p an i ed b y an y cl ai m o f p ers o n al i nju ry o r d am ag e

t o o t h er p ro p ert y .”[ 1 4 ] Ho me Dep o t U. S

. A. v. W a ba s h Na t l. Co r

p

. , 3 14 Ga. Ap p

. 3 6 0,

1 3 Th e Cu s t o m s B ro k er fu rt h er ci t es as rel at ed p ri nci p l es : “ [M ] ere fai l u re to

p erfo rm a co n t ract d o es n ot co n s t i t u t e a t o rt

. A p l ai n t i ff i n a b reach o f co n t ract cas e h as a t o rt cl ai m o n l y wh ere, i n ad d i t i o n t o breach i n g t h e co n t ract

, t h e d efen d an t al s o b reach es an i n dep en d en t d u ty i m p o s ed b y law.” (Fo o tn ot es o m i t t ed

. ) S er vi ceMa s t er Co

. v. Ma rt i n , 2 52 Ga. A p p. 7 5 1

, 7 5 4 (2 ) (5 5 6 SE2 d 5 1 7 ) (2 0 01 ); s ee Or ki n Ext er mi n a t i n g Co

. v. S t even s , 13 0 Ga. Ap p

. 3 6 3

, 3 6 5 (2 0 3 SE2 d 5 8 7) (1 9 7 3 ) (“ [A] n

act i on i n t o rt m ay no t be m ai n t ai n ed fo r wh at i s a m ere b reach t h ro u g h n o n-act i o n o r

t h ro u g h i n effect i v e p erfo rm an ce (wh ich i s th e s am e th i n g) o f a co n t ract d u t y

– t h e d u t y m us t ari s e i n d ep en d en t o f co n t ract t o co ns t i t u t e a t o rt .”).

1 4 See fo o t n o t e 3

, su p ra. Ad d i t i o n al l y , t h e Su gar Im p o rt er h as m ad e no cl ai m

o f p ers o n al i n

ju ry an d n o cl ai m

o f d am ag e t o p ro p ert y

.

113 6 6 (2 ) (7 2 4 SE2 d 5 3 ) (2 0 1 2 ). “ Co u rt s h av e rel eg at ed t h o s e w h o s u ffer s u ch

eco n om i c l o s s t o th e rem ed ies o f co n t ract law.” (Ci t at i o n an d pu n ct u at i o n o m i t t ed .)

Id

.

As an i n i t i al m at t er, we n o t e t h at t h e Su g ar Im p ort er arg u ed b el o w t h at i t h ad

n o co n t ract wi t h t he Cu s t om s Bro k er. An d o n ap p eal , t h e Su g ar Im p ort er m ai n t ai n s

t h at no co n t ract ex i s t ed fo r reas o n s t h at th e POA, t o g et h er wi t h t h e in co rp o rat ed

Term s an d Co nd i t i o n s o f Serv i ce d o cu m en t

, n ei th er d is cu s s ed t h e s p eci fi c s erv i ces

t o b e ren d ered

, t h e s co p e of t h o s e s erv ices

, o r t h e s t an d ard b y wh ich t h ey

wo u l d b e

p erfo rm ed ; n o r d i d t h e d o cu m en t s s p eci fy wh at t o fi le, w h en t o fi l e, wh ere t o fi l e, o r

h o w t o fi l e. Th e Su g ar Im p o rt er’ s arg u m en t , h o wev er, i s u n av ai l i ng

.

OCGA § 1 3 -3 -1 p ro v i d es , “ T o co ns t i t u te a v al i d co n t ract

, t h ere m u s t be p art i es

ab l e to co n t ract

, a co n s i d erat i on m o v i n g t o t h e co n t ract

, t h e as s en t of t he p art ies t o t h e

t erm s o f t h e co n tract

, an d a s u b ject m at t er u p o n w h i ch t h e co nt ract can o p erat e.” An d

OCGA § 1 3 -3 -2 p ro v i d es i n rel ev an t p art

, “ Th e co n s en t o f t h e p art i es b ei n g es s en t i al

t o a co n t ract

, u n t i l each h as as s en t ed t o al l t h e term s , t here i s n o b i n d i n g co n t ract .”

12Th e q ues ti o n p res en t ed h ere i s wh et h er t h e ev i d en ce s h owed t h at t h e part i es as s en t ed

t o t he es s en t i al t erm s [.] 1 5

Th e Su g ar Im

p o rt er’ s co rp o rat e rep res en tat i v e reco u nt ed d u ri n g h i s d ep o s i t i o n

t h at t h e Cu s t o m s Bro k er h ad ad v ert is ed i ts el f as a l i cen s ed cu s t o m s b ro k er an d t h at

,

aft er n eg o t i at i o n s , t h e Su g ar Im p o rt er accep t ed th e Cu s t o m s Bro k er’ s o ffer t o p ro v i d e

i t s s erv i ces fo r i m

p o rt i ng t h e o rg an ic s u g ar fro m Brazi l

. T o faci l i t at e t h ei r ag reem en t

,

t h e Su gar Im

p o rt er ex ecu t ed t h e POA ap p o i n t i n g t h e Cu s to m s Bro k er t o “ act fo r an d

o n b e h a l f a s a t ru e an d l awfu l ag en t an d at t o rn ey ” o f th e Su g ar Im p ort er t o , am o n g

o t h er th i ng s , m ak e “ an y Cu s t om s en t ry , w i t hd rawal

, . . . or an y o t h er d o cu m en t s ” in

co m p l ian ce wi t h CBP’ s req u i rem en t s

. Th ereaft e r , u p o n d em an d b y t he Su g ar

Im p o rt er, t he Cu s t o m s Bro k er m ad e req u is i t e fi l i n g s fo r t h e im p o rt at i o n of t h e s u g ar

i n ex ch an g e fo r a fee. 1 6 W e ag ree wi t h t h e Cu s t o m s Bro k er t hat , u n derl y i n g each o f

t h e fi v e wi t hd rawal en t ri es at i s s u e h ere, was an en fo rceab le co n t ract t h at was

1 5 W e d i scern n o qu es t io n p res en t e d a s t o wh et h er t h e p art i es were b o t h ab l e

t o co n t ract

, wh et h er co n si d erat io n s u p p o rt ed t h e p art i es ’ t ran s act i o n s , o r wh et h er t h e

p ro v is i o n o f cu s t o m s bro kerag e s erv i ces i s a s u b ject m at t er u po n wh i ch a co n t ract can

o p erat e.

1 6 Th e Cu st o m s Bro k er’ s Pres i d en t an d CEO d ep o s e d

, “ W e co m p l y wi t h t h e

ru l es u n d er w h i ch we are l i cen s ed

. A nd o u r l i cen s i n g req u i res u s t o o p e r at e i n a

cert ai n m an n er, an d w e co m p l y wi t h t h o s e r e q u irem en ts u n der [CBP] reg u l at i on s

reg ard i n g o p erat i on s o f i m p o rt s b y a b ro k er.”

13faci li t at ed an d g o v ern ed b y th e POA an d t he refere n c e d Term s an d Co n d i t i o n s o f

Serv i ce d o cu m en t

. W e fi n d n o m eri t i n t he Su gar Im p o rt er’ s bro ad cl a i m t h a t t h e

p art i es h ad n ot as s en t ed t o es s en t i al t erm s

. 1 7

Becau s e t h e Su g ar Im

po rt er was t h u s i n a co n t ract u al rel at i o n s h i p w i t h t h e

Cu s t om s Bro k er, b eca u s e t h e Su g ar Im po rt er’ s s ol e s u bs t an ti v e cl ai m al l eg ed t h e

b reach o f co n t ract ual d u t i es (t o p ro p erl y fi le t he q u o t a wi th dra wa l e n t ri es ), an d

b ecau s e t h e d am ag es b ei n g s ou g h t w ere fo r p u rel y eco n o m i c l o s s es , th e eco n o m i c

l o s s ru l e rel eg at ed t h e Su g ar Im p o rt er t o rem ed i es o f co n t ract l aw. See Gen

. El ec. Co

.,

2 7 9 Ga. 7 7 (ap p l y i n g eco no m i c l o s s ru l e t o p recl u d e s u i t fo r l o st p ro fi t s , wh ere l an d

d ev el o p m en t co n t ract fo r bu s i n es s ex p an s i o n w a s c an cel l ed d u e t o al l eg ed

co n tam i n at i o n b y d efen d an t o f ad jacen t n o n -o wn ed p ro p ert y n eed ed fo r ex p an s i o n );

J. Ki n s o n Co o k of G a

. v. Heer y/ Mi t ch el l

, 2 8 4 G a. Ap p

. 55 2

, 5 5 5 -5 5 6 (a) (6 4 4 SE2 d

4 4 0 ) (2 00 7 ) (ap p l y i n g eco n o m i c l o s s ru l e t o p recl u d e t o rt cl ai m t o reco v er in creas ed

1 7 See g en eral l y D o rs e

y v

. H a r r i s o n , 1 7 1 G a. Ap p. 7 7 4

, 7 79 (3 2 0 SE2 d 8 8 1 ) (1 9 8 4) (“ Part i es m ay b e as fu l l y b o u n d b y an im p l i ed as b y an ex p res s co n t ract wh ere

t h e i n t en t i o n s o f t h e part i e s a r e n o t ex p res s ed

, b ut an ag reem en t i n fact creat i n g an

o b l i g at i o n i s i m

p l ied o r p res u m ed fro m t h e ir act .”) (ci t at i o n s an d pu n ct u at i o n

o m it t ed ).

14co s t s , w h i ch cl ai m was b as ed u po n ag en t ’ s al l eg ed n eg l i g en t s up erv i s i o n ). 1 8

Co n s eq u en t l y , t h e Su gar Im p o rt er’ s t o rt cl ai m of g ro s s n eg l ig en ce was no t v iab l e, an d

t h e Cu s t o m s Bro k er was en t i t l ed t o s u m m ary ju d g m en t o n t h at cau s e o f act i o n

.

2 . Becau s e t h e s o l e s u bs t an t i v e cl ai m o f g ro s s neg l i g en ce was n o t v i ab l e, t h e

Cu s t om s Bro k er was en t it l ed t o s u m m ary ju d g m en t a l s o o n t h e Su gar Im p o rt er’ s

an ci l lary cl ai m s fo r p u ni t i v e d am ag es an d at t o rn ey fees

. See J. Ki ns o n Co o k o f Ga

. ,

2 8 4 Ga. Ap p . at (g ).

3

. In l i g h t o f Di v i s i o n s 1 an d 2

, s u p ra, t h e Cu s t o m s Bro k er’ s arg um en ts t h at i t s

l i ab i l i t y , i f an y , i s l i m it ed b y cl au s es wi t h i n t h e Term s an d Co n d i t i o n s o f Serv i ce

d o cu m en t are t h u s ren dered m o o t

.

Ju d g men t r ever sed . McMi l l i a n a n d

Rees e, JJ., co ncu r

.

1 8 Fu rt h erm o re, t h e Su gar Im p o rt er h as m is p l aced rel ian ce u p o n t h e d u t y

ap p li cab l e i n p ro fes s i o n al n eg l i g en ce act i o n s : “ Th e law i m p o s es u p o n p ers on s

p erfo rm i n g p r of

es s i o n al s erv i ces t h e d u t y to ex erci se a reas o nab l e d eg ree o f s k i l l an d

care, as d et erm i n e d b y t h e d eg ree o f s k i l l an d care o rd i n ari l y em p l o y ed b y t h ei r

res p ect i ve p ro fes s i o n s u n d er si m i l ar co n d it i o n s an d l ik e s urro u n di n g ci rcu m st an ces .” (Ci t at i o n s an d p u n ct u at i o n o m it t ed ; em ph as i s i n o ri g in al .) Hewi tt v. W al ker

, 2 2 6 Ga. Ap p

. 76 4

, 7 6 4 ( 4 8 7 SE2 d 6 0 3 ) (1 9 9 7 ). Th e Su g ar Im p o rt er h as m ad e n o arg u m en t

t h at an y Cu st o m s Bro ker p ers o n n el fel l wi t h i n t h e l i m i t ed sco p e o f “ p ers o n s

p erfo rm i n g p r o

f es s io n a l s erv i ces ”; an d wi th o u t t h at req u i si t e s ho wi n g , t he Cu s t o m s Bro ker i s n o t ch arg eab l e wi t h t h e (s ep arat e ) d u t y a p pl i cab l e i n p ro fes s i o n al

n eg li g en ce act io n s . See i d . at 7 6 5

.

15