Court Opinion

ID: 5639329
Source: CourtListenerOpinion
Date Created: 2022-01-11 06:08:25.324707+00
Date Added: 2024-06-11T08:38:07.834287
License: Public Domain

Pope, Judge,
concurring specially.
Boss contracted to design furniture for Barwick Industries, Inc. in exchange for its agreement to pay him royalties upon the sale of that furniture. The contract provided that the design documents and the manufacturing dies made from them were to be the property of Barwick but that Boss would have a right of first refusal in the event Barwick chose to sell them. Subsequently, Barwick transferred its furniture plant in Dublin, Georgia to Bassett Furniture Industries of North Carolina, Inc. The manufacturing dies and design documents of the furniture design created by Boss were included in the sale. Barwick allegedly did not offer Boss his contractual right of first refusal. Boss initiated suit against both Barwick and Bassett. By this suit Boss is attempting to protect his contractual right to royalties by seeking damages against Bassett, which has allegedly sold furniture manufactured from the design without paying any royalties. This appeal is from a grant of summary judgment in favor of Bassett. The case against Barwick remains pending below.
Boss’s complaint alleges in pertinent part (1) that Bassett assumed Barwick’s contractual obligation to pay royalties on furniture lines using Boss’s designs, (2) that Bassett had acquired the dies, inventory, and design documents subject to an equitable interest in favor of Boss, (3) that Bassett had been unjustly enriched through its acquisition and use of the dies, inventory and design documents without making payments to Boss, (4) that Bassett had intentionally and maliciously interfered with Boss’s contractual right of first refusal regarding the dies and design documents, and (5) that Bassett had conspired with Barwick to breach the contract and defraud Boss of his rights thereunder.
Boss contends that Bassett accepted the benefits of the royalty contract when it used the design documents and dies created by Boss to produce and sell furniture. Therefore, Boss urges that a promise to pay the royalties should be implied from the conduct of Bassett in this situation. The codification of this implied-in-fact contract *251theory is in Code Ann. § 3-107 which provides: “Ordinarily, when one renders services or transfers property valuable to another, which the latter accepts, a promise is implied to pay the reasonable value thereof. . . .” However, no contract will be implied if the facts and circumstances of the case indicate the person accepting the services or property had no knowledge of the benefits being conferred upon him. Compare Lawson v. O’Kelly, 81 Ga. App. 883(2) (60 SE2d 380) (1950).
In the present case Bassett submitted affidavits from its president, vice-president, internal auditor, and general counsel to support its contention that it had no actual knowledge of either the designs created by Boss or Barwick’s duty to make royalty payments. Each of the four Bassett officers asserted that “At no time during the negotiations . . . was any mention ever made” of a contractual relationship between Boss and Barwick, that “at no time during the negotiations” was he “made aware” of Boss’s claims, that he had no knowledge of the “written contract” during the negotiations, and that he did not learn that Boss “was claiming rights under his contract with Barwick” until three years after the sale took place. Three of the officers admitted that at the time of the negotiations they knew that the plaintiff had been employed to design furniture for Barwick, and at least one of them indicated in his deposition that it was not an unusual practice in the industry for furniture designers to be compensated on the basis of royalties. While these affidavits support the fact that these particular agents had no personal knowledge of the royalty contract, Bassett may not avail itself of the defense that it was a bona fide purchaser without any notice of Boss’s claim in order to avoid a finding of a contract implied in fact.
In the business sales contract Bassett and Barwick expressly agreed not to comply with the requirements of the Uniform Commercial Code provision dealing with bulk transfers which was applicable to the sale in the present case, Code Ann. § 109A-6 — 101 et seq. Compliance with this statute would have provided Bassett with notice of creditors and all persons holding or asserting claims against Barwick. Code Ann. § 109A-6 — 104. “As stated in Kock, Georgia Commercial Practice, § 6-4, p. 149, ‘the effect of this bulk sales legislation is to require the transferee [here Bassett] to help in creditor protection, principally a matter of giving notice, if he wants to ensure that they cannot reach the goods in his hands after he has paid for them____’” (Emphasis supplied.) McClain v. Laurens Glass Co., 127 Ga. App. 316, 317 (193 SE2d 194) (1972).
Bassett’s action in affirmatively waiving compliance with the statute, thereby avoiding receiving notice of the royalty claims of *252Boss, in my opinion, constituted a wilful or reckless avoidance of knowledge of what might have been uncovered by compliance with the bulk sales provisions of the Uniform Commercial Code. This avoidance is tantamount to actual knowledge; i.e., not a substitute for actual knowledge, but a recognition that a wilful or reckless avoidance of knowledge should be and is the equivalent of actual knowledge. In the present case proof of Bassett’s wilful or reckless avoidance of notice of the royalty contract would, in my opinion, be sufficient to show the element of knowledge necessary to support Boss’s restitutionary claims against Bassett, for compliance with those provisions of the Uniform Commercial Code would have disclosed Boss’s claim for royalties.
Accordingly, I concur with the majority that summary judgment in favor of Bassett must be reversed.