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All Star, Inc. v. Ga. Atlanta Amusements, LLC

Court of Appeals of Georgia, Third Division

March 26, 2015

ALL STAR, INC. et al.
v.
GEORGIA ATLANTA AMUSEMENTS, LLC

Editorial Note:

This opinion is uncorrected and subject to revision by the court.

BRANCH, Judge. Barnes, P. J., and Boggs, J., concur.

OPINION

Branch, Judge.

All Star, Inc., Elite Amusement, Inc., Ideal Amusements, Inc., Midtown Vending, LLC, and Ultra Group of Companies, Inc. (collectively " appellants" ), appeal from an order of the Gwinnett County Superior Court granting summary judgment against them and in favor of Georgia Atlanta Amusements, LLC (" GAA" ), on the appellants' claims for tortious interference with contractual relations. At issue in this case is OCGA § 50-27-70 et seq., which is the most recent statutory scheme regulating the bona fide coin-operated amusement machine business in this State.[1] The trial court found that this law, which became effective on April 10, 2013, voided certain written contracts and/or oral agreements that four of the appellants had with their customers for the placement of coin-operated amusement machines. The trial court reached this conclusion even though the contracts at issue predate the law's enactment. Based on this holding, the trial court granted summary judgment against the appellants on their claims for tortious interference with contractual relations. On appeal from the summary judgment order, the appellants contend that OCGA § 50-27-70 et seq. should not be interpreted so as to void preexisting contracts. For reasons explained more fully below, we agree. We therefore reverse the trial court's order granting partial summary judgment against the appellants.

The relevant facts are largely undisputed but where any doubt existed, we have construed the record in favor of the appellants, as the non-movants. See Thompson v. Lovett, 328 Ga.App. 573 (760 S.E.2d 246) (2014) (on a motion for summary judgment, we " construe the evidence in the light most favorable to the nonmovant" ) (citation omitted). The record shows that each of the appellants is a company that owns coin-operated amusement machines and is in the business of leasing those machines to third parties. At issue in this case are " Class B" coin-operated amusement machines (" Class B machines" ).[2] Prior to April 2013, all of the appellants other than Ideal Amusements had written rental contracts and/or oral rental agreements with specific business owners (" location owners" ) for the placement of one or more Class B machines within that business.[3] Each of the written contracts contained a clause that set forth how the revenue generated by the leased machines would be divided between the company that owned the machines (the " machine owner" ) and the location owner. Similarly, under each of the oral agreements in place, the location owner had agreed to pay the machine owner a certain percentage of the revenue generated by the machine as rent for the machine. The specific agreements at issue are as follows:

All Star

On November 1, 2000, All Star entered into a written rental agreement with Fast Freddy's, a gas station and convenience store located in Lilburn. Under the terms of the this agreement, Fast Freddy's agreed to pay All Star 40 percent " of the total gross revenue" [4] generated by the machines as rent for the machines, with Fast Freddy's retaining 60% of the revenue. The contract was for a term of seven years and it contained an automatic renewal clause. That clause provided that the contract would automatically renew for additional terms of seven years unless one party notified the other, at least 90 days in advance of the renewal date, that it was electing not to renew. There is no evidence in the record that either party exercised its right of non-renewal; thus, the contract renewed on November 1, 2007, for an additional seven-year term.

On March 28, 2011, All Star entered a written rental agreement with USA Food Mart, a gas station and convenience store located in Carrollton. Under the terms of this agreement, USA Food Mart agreed to pay All Star 70 percent of the total gross revenue generated by the machines, with USA Food Mart retaining the remaining 30 percent. The contract was for a term of three years.

As of April 2013, All Star had an oral agreement with Tienda Veracruz, a Carrollton grocery, and the agreement had been in place for approximately one year. There is no evidence in the record as to how the parties had agreed to split the revenue from the machine or machines placed at this location.

Elite Amusement

As of April 2013, Elite had in place oral agreements for the placement of its machines at five different locations: Discount Foodmart in Atlanta; the BP gas station in Stockbridge; East Side Tobacco in Conyers; Old National Hookah in Riverdale; and Tobacco More in Atlanta. Elite's agreement with Discount Foodmart had been in place seven years; its agreement with the Stockbridge BP had been in place six years; its agreement with Old National Hookah had been in place six months; and its agreements with East Side Tobacco and Tobacco More had each been in place for three months. There is no evidence in the record as to how the parties had agreed to split the revenue from the machine or machines placed at these locations.

Midtown Vending

On August 2, 2010, Midtown Vending entered into two separate written rental agreements with Kahlid Amin for the placement of coin-operated amusement machines at two businesses owned by Amin in Fayetteville: Paw Paw's Shell and Coleman Grocery. Both of the agreements provided that the business in question would pay Midtown Vending 30 percent " of the total gross revenue" [5] generated by the machines as rent for the machines, ...


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