Court Opinion

ID: 770926
Source: CourtListenerOpinion
Date Created: 2012-04-18 10:41:42+00
Date Added: 2024-06-11T17:55:53.965377
License: Public Domain

230 F.3d 1004 (7th Cir. 2000)
Fulcrum Financial Partners, Plaintiff-Appellant/Cross-Appellee,v.Meridian Leasing Corporation, Defendant-Appellee/Cross-Appellant.
Nos. 99-2417, 99-2459
In the  United States Court of Appeals  For the Seventh Circuit
Argued April 17, 2000Decided October 26,  2000

Appeals from the United States District Court for the Northern District of Illinois, Eastern  Division.  No. 97 C 6074--John A. Nordberg, Judge.[Copyrighted Material Omitted]
Before Fairchild, Posner, and Diane P. Wood,  Circuit Judges.
Diane P. Wood, Circuit Judge.

1
Fulcrum  Financial Partners (Fulcrum) and Meridian  Leasing Corporation (Meridian) worked as  partners in the computer leasing  business. When the parties' relationship  began to break down over a series of  disputes, they entered into a  comprehensive Settlement Agreement. The  question now before us is how much that  Agreement really resolved. Fulcrum took  the position that it did not cover all  disputes between the parties and  accordingly brought an action alleging  that Meridian owed it money arising from  a few discrete business transactions.  Meridian and Fulcrum filed cross motions  for summary judgment, which the district  court granted in part and denied in part.  The parties have filed cross-appeals.

2
* Underlying this dispute is a tangled web  of business relationships. Fulcrum is a  general partnership in the business of  leasing computer equipment. Until January  25, 1995, Meridian was a general partner  of Fulcrum. Article 7 of the partnership  agreement appointed Meridian as the  remarketing agent in charge of re-leasing  or selling Fulcrum's equipment when  equipment leases terminated. Meridian was  also a general partner in another  partnership, FFP Acquisition Partners  (FFPA). The other partner in the FFPA  partnership was T.I.C. Leasing  Corporation (T.I.C.). FFPA, in turn,  owned 98 percent of Fulcrum. (T.I.C.,  which was owned by Turner Broadcasting  System, Inc. (TBS), was eventually sold  to Computer Systems of America (CSA).)

3
A series of disputes erupted among the  various partnerships, quickly followed by  two lawsuits, one in Georgia and the  other in Illinois. On January 25, 1995,  Meridian, Fulcrum, FFPA, T.I.C., TBS, and  CSA entered into a written Settlement  Agreement that contained the following  language with respect to its coverage

4
WHEREAS the parties to this Agreement now  desire to fully and finally settle all  existing disputes and claims among  themselves, including, without  limitation, the matters raised in the  Georgia lawsuit and the Illinois lawsuit and certain other matters resolved under  this Agreement;

5
* * * * *

6
In consideration of the promises made  herein, CSA, TBS and T.I.C., on its own  behalf and on behalf of FFPA, and for  their administrators, executors,  attorneys, successors, assigns, personal  representatives, agents, servants,  employees, affiliated entities, parents,  officers, directors, shareholders, and  all other persons claiming by, through  and under them, do hereby fully, finally  and forever release, remise, discharge  and forever acquit Meridian and its  administrators, executors, attorneys,  successors, assigns, personal  representatives, agents, servants,  employees, affiliated entities, officers,  directors, shareholders, and all other  persons claiming by, through and under  them, of and from any and all claims or  causes of action for damages or  injunctive relief, expenses, lost  profits, attorneys' fees, liens, punitive  damages, penalties and/or other potential  legal or equitable relief of every kind  and nature including but not limited to  any claim which was or could reasonably  have been raised in the Georgia lawsuit,  except that this release is not intended  to, and shall not, act as a release of  any claims based in whole or in part on  facts or occurrences which were actively  concealed by Meridian or which arise, in  whole or in part, on or after the date of  this Agreement or under this Agreement or  the exhibits hereto.

7
In addition to settling claims, the  Settlement Agreement provided that  Meridian would withdraw from its partner  ships with both FFPA and Fulcrum and  transfer its interests in those  partnerships to CSA. But the separation  was not an unqualified one. Instead,  according to the Settlement Agreement,  "Meridian [would] remain remarketing and  lease administration agent to Fulcrum at  no cost to Fulcrum on such terms as set  forth in Exhibit D." Exhibit D, in turn,  said that "these terms shall govern the  remarketing arrangements between Fulcrum  and Meridian."

8
Regrettably, the Settlement Agreement  did not provide the global peace that  parties usually hope for. Instead, new  problems arose over Meridian's  remarketing responsibilities, which led  to Fulcrum's decision to file the present  action on August 29, 1997. Its complaint  alleged three separate claims. The first  two involved the proper distribution of  sales proceeds from one of Meridian's  remarketing transactions. The third  alleged that Meridian improperly usurped  a business opportunity from its former  partner. The parties filed cross-motions  for summary judgment. Fulcrum prevailed  on Count I and Meridian on Counts II and  III. We review a grant of summary  judgment de novo, Silk v. City of  Chicago, 194 F.3d 788, 798 (7th Cir.  1999); the same standard of review also  applies to contract interpretation, as it  too is a question of law. River v.  Commercial Life Ins. Co., 160 F.3d 1164,  1169 (7th Cir. 1998). For the reasons  given below, we affirm in part and  reverse in part.

II

9
A. Allocation of Proceeds of September  1996 Remarketing Transaction

10
Under the Settlement Agreement, Meridian  was to serve as a remarketing agent for  Fulcrum's equipment. Some of this  equipment was subject to subordinated  debt owed to Meridian; some was not. In  September 1996, Meridian remarketed four  groups of equipment, referred to in this  case as Schedule #4, Schedule #4A,  Schedule #4A-UP, and Schedule #4D (or  "the Escon channels"). The parties agree  that Schedule #4 was "Equipment" as  Exhibit D to the agreement defined the  term, and that Schedules #4A and #4A-UP  were "Upgrades," also as defined in  Exhibit D. The parties therefore agreed  that Meridian should receive the proceeds  of the sale of the Schedule #4 Equipment  and Fulcrum should receive the proceeds  of the sale of the Schedules #4A and #4A-  UP Upgrades. (We discuss in part C who  should receive the proceeds for the Escon  channels.) The total sale price for all four groups  was $770,000. The parties agreed that the  fair market value of the Escon channels  was $80,000. They could not, however,  agree on a valuation of the remaining  Schedules (#4, #4A, and #4A-UP), which  meant that it was impossible at that  point to allocate the proceeds of the  sale between them. Meridian initially  proposed a valuation of Schedule #4 of  $345,000, leaving the value of Schedules  #4A and #4A-UP at $345,000. Fulcrum  disagreed and valued Schedule #4 at  $230,000. Meridian went ahead with its  valuation and sent Fulcrum a check for  $340,000, representing its valuation of  Schedules #4A and #4A-UP minus a $5,000  remarketing fee. Fulcrum disputed both  the allocation amount and the payment of  the fee; it therefore refused to cash the  check.

11
At an impasse, the parties invoked  Section IX of Exhibit D, which was  designed to deal with remarketing  transactions taking place after the  Settlement Agreement in which both  Equipment Subject to Subordinated Debt  and regular Equipment and/or Upgrades are  at issue

12
Allocations.  In connection with any  Remarketing involving both Equipment  Subject to Subordinated Debt and  Upgrades, any Remarketing proceeds (both  sales price and lease rentals) shall be  allocated between the Equipment Subject  to Subordinated Debt and Upgrades on the  basis of fair market value of the  respective components as of the effective  date of such Remarketing. If Fulcrum and  Meridian are unable to agree upon the  respective fair market values, the  allocation shall be settled by submission  of the dispute to four (4) nationally  recognized computer dealers . . . .  Appraisal reports shall be submitted by  each appraiser within seven (7) days  after his appointment and the respective  fair market values of the Equipment and  Upgrade at issue shall be the arithmetic  mean of all appraisals; provided,  however, if any appraisal deviates from  the arithmetic mean by more than twenty  percent (20%), said appraisal shall be  disregarded. . . .

13
Unfortunately for all involved, hindsight  reveals that this provision left a good  deal to be desired. Indeed, it is not  even clear how it should be  characterized. The parties refer to it as  the "arbitration" provision, but this  does not seem quite right. Rather than  provide for binding arbitration of the  allocation issue as a whole, the  provision merely lays out a means of  appraising the value of individual items  in those cases where the parties disagree  about fair market value. Moreover, the  four "arbitrators" do not come to a  decision; instead, each of them merely  appraises the value of the Equipment  and/or Upgrades and a mathematical  formula takes care of the rest. In the  end, however, it is not the terminology  that matters for this case; because the  parties have referred to this as the  "arbitration" provision, we will do so as  well.

14
The contract contemplates that the  respective fair market value of each item  of sold Equipment and Upgrades will be  determined independently. Although it  would have made logical sense for it also  to stipulate that the fair market value  of the individual items should add up to  the total sale price, nothing in the  Agreement so states. Naturally, as  believers in Murphy's Law would say, that  omission proved to be exactly the problem  here.

15
As required by Section IX of the  Agreement, the four arbitrators appraised  the separate fair market values of  Schedule #4, Schedule #4A, and Schedule  #4A-UP. (The parties did not request a  fair market valuation for the Escon  Channels (Schedule D), because they had  already agreed that their fair market  value was $80,000.) The parties did not  instruct the arbitrators to adjust their  appraisals of the individual schedules  such that the total would equal $690,000  (the amount of the sale minus the value  of the Escon channels). The arithmetic  means of the four arbitrators' valuations  for each Schedule were Schedule #4: $337,500; Schedule #4A: $161,667;  Schedule #4A-UP: $221,667. The total of  the means of the three fair market  valuations is $720,834. Taking into  account the $80,000 for the Escon  Channels, the total fair market valuation  for the sale is $800,834. This valuation  presents an obvious problem: it exceeds  the actual total sale amount of $770,000  by $30,834, or about 4%.

16
The district court read Exhibit D to  provide that any proceeds from the sale  of Equipment Subject to Subordinated Debt  would be paid to Meridian up to the  amount of the debt. The balance, if any,  would go to Fulcrum and any proceeds from  the sale of Equipment not subject to  subordinated debt would be paid to  Fulcrum. To figure out the amount of sale  proceeds from Equipment Subject to  Subordinated Debt, the district court  focused on the language in Section IX  that provides that sale proceeds from  mixed sales are to be "allocated between"  Equipment and Upgrades "on the basis of"  the fair market value of each. The  district court interpreted this language  to require that proceeds from the 1996  sale be allocated on a pro-rata basis. To  determine the pro-rata shares, the  district court took the mean fair market  valuation of each Schedule (including the  Escon channels) and divided the  individual Schedule value by the total of  the fair market valuation means (i.e.,  $800,834). The district court then took  these percentages and multiplied them by  the $770,000 actual sale price in order  to determine how much of the actual sale  price should be allocated to each  Schedule. Under this approach, the  district court arrived at the following  adjusted allocations: Schedule #4: $324,506; Schedule #4A: $155,442;  Schedule #4A-UP: $213,132; Escon Channels  (Schedule D): $76,920.

17
Meridian raises three objections to the  district court's procedure. First,  Meridian interprets the contract to  provide that it should receive the fair  market valuation of the Schedule #4  Equipment and that Fulcrum should receive  whatever is left over. In support of its  interpretation, Meridian argues that the  arbitrators were supposed to allocate the  purchase price "between" Equipment  Subject to Subordinated Debt and Upgrades  and that the district court erroneously  allocated the proceeds "among" Equipment  Subject to Subordinated Debt and each  particular Upgrade. We are not persuaded.  In fact, this argument clashes with the  plain language of the "arbitration"  provision, Section IX. According to  Section IX, the allocation shall be made  "on the basis of" the fair market  valuations; importantly, it does not say  that the fair market valuation must be  the actual amount either party would  receive. Why providing fair market  valuations of each particular Upgrade  makes any difference is mystifying;  whether the Upgrades are valued as a  group or whether they are valued  individually and then totaled makes no  difference.

18
The definitions of "between" and "among"  are not different enough to carry the day  for Meridian. "Between" can mean "shared  by," such as "by giving a portion of the  total to each." Webster's Third New  International Dictionary (1993). "Among"  can mean "for distribution to" and "to be  shared by." Id. The part of the agreement  we are considering is titled  "Allocation," and it refers to an  "allocation between" Equipment and  Upgrades. "Allocation" is defined as "the  act of apportioning," id., and  "apportion" is defined in turn as "to  divide and assign in proportion" or "to  divide and distribute proportionately."  Id. Thus both the title of the provision  and its plain language imply that there  is a fixed pie that needs to be divided  proportionately--and that is precisely  what the district court did by using the  appraisers' fair market valuations as the  basis for its determination of the pro-  rata shares of the sale proceeds. (We  imagine that were the circumstances  different--if, for example, the total  sales proceeds exceeded the total of the  means of the fair market valuations--  Meridian would not be urging such a  construction, for in that case, any  excess, under Meridian's theory, would go  to Fulcrum.)

19
Second, Meridian argues that Fulcrum is  bound by the arbitration and that this  issue is not properly before the court.  But we are not sure what that means,  given the fact that the appraisals were  neither intended to nor did they resolve  the allocation question. There is thus no  "award" that can be enforced on the only  critical point. If Meridian believed that  the appraisers had not completed their  work, it should have sent the job back to  them.

20
Third, Meridian argues that even if the  district court was correct to make the  allocation on a pro-rata basis, the court  erred in including the $80,000 for the  Escon channels in determining the pro-  rata shares. But this argument runs  counter to a pro-rata methodology. The  $770,000 sales price represented the  value received for all four schedules;  the $80,000 figure was nothing more or  less than a private agreement on the  appraisal of one of them. In determining  what the pro-rata shares should be, it is  necessary to include every item.  Excluding some and including others would  distort the percentages.

21
The district court gave this part of the  contract the only logical reading that  was available. It allocated the sales  price on the basis of the fair market  values of each component, whether that  value was ascertained by agreement of the  parties or through the appraisal  procedure in the contract. We therefore  affirm the district court's ruling on  Count I that Meridian is entitled to  $324,506 for Schedule #4 and Fulcrum is  entitled to $368,574 for Schedules #4A  and #4A-UP. As Meridian has already paid  Fulcrum $340,000, at this point Meridian  need only pay Fulcrum the balance: $28,574.

B. Sprint Lease Upgrade

22
In Count II, Fulcrum claims that  Meridian overcharged it in the sale of an  upgrade for a lease to Sprint. Meridian  counters that Count II is barred by the  release of claims in the January 25,  1995, Settlement Agreement.

23
The history of this dispute is as  follows. On July 12, 1994, Meridian  offered Fulcrum the opportunity to  acquire an upgrade to the Sprint lease.  Section 9.9 of the FFPA partnership  agreement provided that before Meridian  could sell any upgrades to equipment  leased by Fulcrum's customers, Meridian  had to offer Fulcrum the opportunity to  purchase and lease the upgrade. T.I.C.  accepted the offer by letter on July 14,  1994, indicating that it wanted Fulcrum  to acquire the upgrade as proposed by  Meridian. The gist of the complaint is  that Meridian erroneously estimated the  amount of the equity contribution Fulcrum  would have to make, resulting in an  overpayment of $52,278. Although the par  ties agreed (in writing) to the deal in  July 1994, the sale was not consummated  until January 27, 1995--two days after  the settlement agreement was signed.

24
The district court saw this as a  misrepresentation claim; Fulcrum argues  that it is an unjust enrichment claim. We  agree with the district court that the  better way to frame the claim is one for  misrepresentation or fraud, particularly  as under Georgia law, "[t]he theory of  unjust enrichment applies when as a  matter of fact there is no legal  contract." Brown v. Cooper, 514 S.E.2d  857, 860 (Ga. App. 1999); see also  Stowers v. Hall, 283 S.E.2d 714, 716 (Ga.  App. 1981). As there was a contract,  Georgia law rules out unjust enrichment  as a theory. In any event, the  distinction between misrepresentation and  unjust enrichment is one without a  difference in this context. As we explain  below, the claim turns on when it  accrued, and under Georgia law either  type of claim would not accrue until  there are damages, which in this case  would be Fulcrum's payment to Meridian.

25
Meridian argues that the Settlement  Agreement released Fulcrum's claim,  because the claim arose "in whole or in  part, on or after the date of this  [Settlement] Agreement." Fulcrum first  argues it is not bound by the Settlement  Agreement because it is not listed as one  of the parties in the release provision.  The district court found that this  argument made little sense, because (1)  it would be illogical for the critical  provision of the Settlement Agreement--  the release--not to apply to one of the  key parties; (2) Fulcrum is listed as one  of the parties entering into the  Settlement Agreement more generally; and  (3) the final "whereas" clause states  that "the parties" to the Agreement want  to "finally settle all existing disputes  among themselves."

26
So far so good. But we still need to  decide whether Fulcrum is bound by the  release term of the agreement. The  parties have devoted considerable energy  to arguments over the question whether  the language of the release provision  itself demonstrates that Fulcrum is (or  is not) so bound. We find it unnecessary  to resolve this somewhat messy question,  because there is an independent reason  for concluding that Fulcrum is not bound  for purposes of the claims at issue here.

27
Fulcrum argues that even if it is  covered by the release provision, the  provision does not apply to its claim  against Meridian, because the cause of  action accrued after the date of the  release. Citing no case law, the district  court disagreed and found that the  Settlement Agreement released Fulcrum's  claim, because "the elements of any of  Fulcrum's claims were present before the  date of the Settlement Agreement." The  district court also found that the  exception for claims "which arise, in  whole or in part, on or after the date of  this Agreement" did not apply.

28
We do not agree with the district  court's reading of the release provision.  The Settlement Agreement's exception  provides "this release is not intended  to, and shall not, act as a release of  any claims based in whole or in part on  facts or occurrences which were actively  concealed by Meridian or which arise, in  whole or in part, on or after the date of  this Agreement." (Emphasis added.)

29
Under Klaxon Co. v. Stentor Elec. Mfg.  Co., 313 U.S. 487, 496 (1941), we look to  the forum state's (here, Illinois's)  choice-of-law rules to determine the  applicable substantive law. In contract  disputes such as this one, Illinois  respects the contract's choice-of-law  clause as long as the contract is valid  and the law chosen is not contrary to  Illinois's fundamental public policy.  Vencor, Inc. v. Webb, 33 F.3d 840, 844  (7th Cir. 1994); Keller v. Brunswick  Corp., 369 N.E.2d 327, 329 (Ill. Ct. App.  1977). Therefore, we look to Georgia law,  which is the law expressly chosen in the  Settlement Agreement, Hugel v.  Corporation of Lloyd's, 999 F.2d 206, 211  (7th Cir. 1993), to determine when  Fulcrum's claim accrued.

30
Under Georgia law, Fulcrum's claim--  whether characterized as one for fraud  (or misrepresentation) or  unjustenrichment--did not accrue until  January 27, 1995, after the date of the  Settlement Agreement. One element of a  fraud claim is damages. A fraud claim  does not accrue until suit on the claim  can be successfully maintained, see  Limoli v. First Georgia Bank, 250 S.E.2d  155, 156 (Ga. App. 1978), and damages are  required before a plaintiff can maintain  a fraud action. See Garcia v. Unique  Realty & Property Mgmt. Co., 424 S.E.2d  14, 16 (Ga. App. 1992); Pickelsimer v.  Traditional Builders, Inc., 359 S.E.2d  719, 721 (Ga. App. 1987). Similarly, "a  claim for unjust enrichment does not  arise until the party accepts the benefit  giving rise to the implied promise to  pay." Akin v. PAFEC Ltd., 991 F.2d 1550,  1558 (11th Cir. 1993), citing Ga. Code  Ann. sec. 9-2-7. Fulcrum experienced no  damages until the sale was consummated  and Meridian cashed Fulcrum's check. We  therefore reverse the district court's  finding that this claim was released by  the Settlement Agreement and remand the  claim to the district court for  calculation of the damages.

31
C.  Schedule 4D Equipment ("the Escon  Channels")

32
Count III of Fulcrum's complaint alleged  that Meridian breached its duty to  Fulcrum by acquiring and leasing the  Escon Channels (an Upgrade) to one of  Fulcrum'scustomers without first giving  Fulcrum the opportunity to provide the  Upgrade. The complaint alleges that  Meridian breached its duty as Fulcrum's  agent. Fulcrum seeks to recover the  profits Meridian made on this  transaction: $36,000. (The complaint also  made claims to profits Meridian made on  leases of Schedule #4B and #4C equipment.  The district court ruled against Fulcrum  on this aspect of its claim, but Fulcrum  has elected not to challenge this part of  the district court's ruling on appeal. We  therefore disregard it as well.) As the  Escon Channels were acquired and leased  in February 1995, this transaction is not  covered by the Settlement Agreement's  release provision. Other terms of the  Settlement Agreement do apply, including  the terms of Exhibit D, because this  remarketing transaction post-dates the  Settlement Agreement.

33
At issue here is what sort of a duty, if  any, Meridian owed Fulcrum in its  capacity as remarketing agent after the  Settlement Agreement. Fulcrum argues that  under the FFPA Agreement Meridian owed  Fulcrum a duty of noncompetition.  Meridian responds that because it had  withdrawn from the FFPA partnership at  the time of this transaction, that duty  was no longer applicable. Fulcrum  counters that Meridian's duty of  noncompetition was carried forward in  both the Settlement and the Remarketing  Agreements. Meridian parries that the  parties impliedly consented to eliminate  that duty because although the FFPA  partnership agreement expressly included  a noncompetition clause, that clause was  not repeated in the Settlement and  Remarketing Agreements. Fulcrum then  falls back on the argument that Meridian  owed Fulcrum the common law duty of  loyalty found in any agent/principal  relationship, and that Meridian breached  its duty as an agent by seizing for  itself an opportunity belonging to its  principal. Fulcrum also points to Ga.  Code Ann. sec. 23-2-59 (prohibiting an  agent from acquiring rights in a property  which are antagonistic to the rights of  the principal) in support of its  contention that Meridian also had a  statutory duty of loyalty. Although  Fulcrum does not mention it, Ga. Code  Ann. sec. 10-6-25 also supports its  argument: "The agent shall not make a  personal profit from his principal's  property; for all such he is bound to  account."

34
The district court ruled in Meridian's  favor. The district court first found  that Exhibit D did not provide for a duty  of noncompetition, because it did not  include an express provision stating as  much. It found the Settlement Agreement's  reference to the FFPA agreement to be too  indirect to incorporate the FFPA  agreement's duty of noncompetition. The  district court also found the Georgia  statute inapplicable because it could  ascertain no relationship between the  parties and the State of Georgia. (The  district court did not find the choice of  law provision in the Settlement Agreement  to be relevant.)

35
This is a close call. On the one hand,  it would be simple to decide the matter  based on the Georgia law of agency (both  statute and common law) and general  agency principles, such as those famously  expounded by Judge Cardozo in Meinhard v.  Salmon, 164 N.E. 545 (N.Y. 1928). Both  provide that when an agent is serving a  principal, the agent cannot usurp  opportunities it comes across in that  relationship for itself. See, e.g.,  Franco v. Stein Steel & Supply Co., 179  S.E.2d 88, 91 (Ga. 1970); Meinhard v.  Salmon, 164 N.E. at 547; Restatement  (Second) of Agency sec. 393 (1958).  Applying these general principles to this  case would lead to the conclusion that  Meridian, as remarketing agent, had an  agent/principal relationship with  Fulcrum; thus, Meridian should not have  taken a business opportunity without  first offering it to Fulcrum.

36
But we cannot work from sweeping  generalizations about agency law when the  parties have created a more limited  relationship. Meridian did have an agency  relationship with Fulcrum by virtue of  Exhibit D, but it was a limited rather  than a general one. We must therefore  look to the language of Exhibit D to  determine the scope of Meridian's agency  relationship with Fulcrum, and hence the  nature of the obligations Meridian was  under. See Peachtree Purchasing Co. v.  Carver, 374 S.E.2d 834, 836 (Ga. App.  1988) ("[T]he right of an agent to engage  in competitive business is dependent to a  certain extent upon the character of the  agency, the circumstances surrounding it,  and the agreement, express or implied, of  the parties . . . ."); see also Cutliffe  v. Chesnut, 176 S.E.2d 607, 611 (Ga. App.  1970) ("the existence and extent of the  duties of the agent to the principal are  determined by the terms of the agreement  between the parties") (citing Restatement  (Second) of Agency sec. 376).

37
To understand Exhibit D, it is helpful  to consider both the language of that  agreement and the way it fits into the  broader context of the other agreements  entered into by the parties.

Section X of Exhibit D provides

38
For its services as remarketing and lease  administration agent, Meridian shall not  be entitled to any fee or compensation,  it being understood and agreed that its  services shall be rendered as part of the  consideration of the Settlement  Agreement, and in order to continue its  obligations under the Fulcrum Partnership  Agreement notwithstanding Meridian's  withdrawal therefrom as a partner;  provided, however, Fulcrum shall  reimburse Meridian for its reasonable  out-of-pocket costs and expenses paid by  Meridian to a third party in furtherance  of its duties and responsibilities as  remarketing and lease administration  agent . . . (emphasis added).

39
The effect of this provision is to  require Meridian, despite its withdrawal,  to continue its duties as remarketing  agent, as spelled out in the Fulcrum  Agreement.

40
Turning to the Fulcrum Agreement, we see  that its Article 7 appointed Meridian to  be "Remarketing Partner." This provision  said that "[t]he Remarketing Partner  shall not be entitled to any compensation  for performing any of its services  hereunder, except for such reasonable  out-of-pocket expenses as are set forth  [elsewhere in the agreement]." The  Fulcrum agreement also contained the  following clause addressing competition  among the partners

41
1.9 Competition.  The Partners hereby  acknowledge and agree that each Partner  may engage in any activity whatsoever,  whether or not such activity competes  with or is enhanced by the Partnership's  business and affairs, and no Partner  shall be liable or accountable to the  Partnership or any other Partner for any  income, compensation, or profit that such  Partner may derive from any such  activity. Further, no Partner shall be  liable or accountable to the Partnership  or any other Partner for failure to  disclose or make available to the  Partnership any business opportunity that  such Partner becomes aware of in such  Partner's capacity as a Partner or  otherwise. Notwithstanding the foregoing,  nothing contained herein shall in any way  relieve any Partner of liability for any  breach of its fiduciary duties to the  Partnership. (Emphasis added.)

42
Until one reaches the last sentence,  this paragraph seems straightforward  enough, but at that point it becomes a  bit hard to understand. On the one hand,  it seems to derogate from the common law  duty of noncompetition between agents and  principals (and hence between partners).  On the other hand, it holds as intact the  partners' fiduciary duty to one another,  which ordinarily might include their duty  not to usurp opportunities that properly  belong to the partnership. But "fiduciary  duty" must mean something narrower than a  competitive behavior, because the  provision seems to anticipate and provide  for competition between the partners.  Furthermore, it is hard to reconcile a  norm of unfettered competition among the  partners with the right of first refusal  that Fulcrum alleges it had.

43
If, however, Fulcrum had no right of  first refusal, then it is possible to  make sense of the entire paragraph. On  the one hand, it allows the parties to  compete among themselves, but on the  other hand, to the extent that fiduciary  duties unrelated to business  opportunities might be triggered, those  duties remain enforceable. This is just a  way of allowing the specific language of  the paragraph to limit the general  reservation of rights at the end, which  is the approach we believe a Georgia  court would take. See Schwartz v. Harris  Waste Management Group, Inc., 516 S.E.2d  371, 375 (Ga. App. 1999) ("Under general  rules of contract construction, a limited  or specific provision will prevail over  one that is more broadly inclusive.").

44
Although Fulcrum urges that it had a  right of first refusal, we find that this  position is not consistent with the  governing agreements. A right of first  refusal was created in Section 9.9,  "Conflicts of Interests, Upgrades," of  the FFPA agreement. That section reads,  in pertinent part

45
(b) In the case of an upgrade by the  General Partner [Meridian] or any  affiliate thereto to any equipment of the  Acquired Partnership [Fulcrum], the  Acquired Partnership [Fulcrum] shall have  a right of first refusal from Meridian in  regard to owning such upgrade and the  Limited Partner shall determine whether  to cause the Acquired Partnership  [Fulcrum] to exercise such right of first  refusal with respect to such upgrade. . .  .

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Section 9.9 of the FFPA agreement is not  incorporated or even mentioned in Exhibit  D. And while it is mentioned in the  Settlement Agreement, it is a mere  passing reference that does not  incorporate the terms of that provision  in any substantive way.

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By agreement of the parties, the terms  of Exhibit D governed Meridian's duties  to Fulcrum with regard to this  remarketing transaction. Because Exhibit  D creates no right of first refusal,  Meridian did not breach any contractual  duty when it did not provide Fulcrum with  a right of first refusal in this  transaction.

III

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For the reasons described above, we  Affirm in part and Reverse in part.  Specifically, we Affirm the district  court's decision on Count I; we Reverse  the district court's decision on Count II  and Remand to the district court for a  determination of Fulcrum's damages; and  we Affirm the district court's decision on  Count III. Each party shall bear its own  costs on appeal.