Opinion ID: 60708
Heading Depth: 2
Heading Rank: 2

Heading: Emme’s Breach of Contract Liability

Text: GBA cross-appeals the district court’s holding that Emme was not liable under the contract between GBA and Impression as a matter of law. We review the district court’s grant of summary judgment de novo. Gibson v. Resolution Trust Corp., 51 F.3d 1016, 1020 (11th Cir. 1995). While it is undisputed that Emme did not come into existence until five years after GBA and Impression entered into the contract, GBA relies on the contractual language providing that the agreement shall be binding upon the parties’ “heirs, successors, assigns and successors-in-interest.” GBA contends that Emme was either a successor-in-interest, an assignee, or a ratifier. 10
Under Florida law,3 the liabilities of a selling predecessor corporation will not be imposed upon the buying successor corporation unless “(1) the successor impliedly assumes the obligations of the predecessor, (2) the transaction is a de facto merger, (3) the successor corporation is a mere continuation of the predecessor, or (4) the transaction is a fraudulent effort to avoid the liabilities of the predecessor.” Orlando Light Bulb Serv. Inc. v. Laser Lighting & Elec. Supply, Inc., 523 So. 2d 740, 742 (Fla. Dist. Ct. App. 1988). In this case, GBA’s theory of successorship fails from the outset as GBA does not establish a successor-predecessor relationship between Impression and Emme. There was no transfer or merger of assets from Impression to Emme. As we have said elsewhere, “[g]enerally, one of the fundamental requirements for consideration of the imposition of successor liability is a merger or transfer of assets between the predecessor and successor companies.” Coffman v. Chugach Support Servs., Inc., 411 F.3d 1231, 1237 (11th Cir. 2005). Here, where Emme was formed as a separate company, where Emme purchased none of its assets from Impression, where neither Impression nor Nick 3 The district court applied Florida law to the question of Emme’s contractual liability and no party raises the choice of law issue on appeal. 11 Yeh had any ownership interest in Emme and received no royalties from Emme, where Impression continued its business and did not dissolve subsequent to Emme’s formation, and where there has been no assertion of fraud, we cannot hold that GBA established an issue of material fact as to successor-in-interest liability. See, e.g., Bernard v. Kee Mfg. Co., Inc., 409 So. 2d 1047, 1048 (Fla. 1982) (holding that successor-in-interest relationship did not exist where the old company sold its manufacturing business to a new company operating under different ownership and management); Orlando Light Bulb Servs., Inc., 523 So. 2d at 742-43 (holding that successor-in-interest relationship did not exist where alleged successor was separately owned and acquired only a limited amount of assets from alleged predecessor); cf. Amjad Munim v. Azar, 648 So. 2d 145, 15455 (Fla. Dist. Ct. App. 1994) (holding that successor-in-interest existed where ownership between the old and new companies was the same, the new company began when the old company ceased, and the new company provided the same services to the same clients while using the same staff).
GBA asserts that Impression assigned the contract to Emme. An assignment is “a transfer or setting over of property or of some right or interest therein, from 12 one person to another.” State Farm Fire & Cas. Co. v. Ray, 556 So. 2d 811, 812 (Fla. Dist. Ct. App. 1990) (internal quotation marks omitted). An “assignment transfers to the assignee all the interest of the assignor under the assigned contract, [leaving] the assignor [with] no right to make any claim on the contract once the assignment is complete, unless authorized to do so by the assignee.” Id. at 813. As Appellants point out, it is undisputed that Impression maintained its interest in the employment contract from 1992 through GBA’s termination in 2003. Since there was never a time when Impression relinquished its interest in the contract to Emme or to anyone else, it follows that Emme was not assigned the contract.
GBA argues that Emme ratified the agreement. “Ratification of an agreement occurs where a person expressly or impliedly adopts an act or contract entered into in his or her behalf by another without authority.” Deutsche Credit Corp. v. Peninger, 603 So. 2d 57, 58 (Fla. Dist. Ct. App. 1992) (emphasis added); Port Largo Club, Inc. v. Warren, 476 So. 2d 1330, 1333 (Fla. Dist. Ct. App. 1985) (same). As stated previously, Impression and GBA entered into the contract in 1992—five years before Emme was formed. The contract, therefore, was not entered into on Emme’s behalf or without Emme’s authorization as Emme did not exist at the time. 13 Because Emme was not a successor-in-interest, assignee, or ratifier, we affirm the district court’s grant of summary judgment precluding GBA from recovering under the contract against Emme.