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HessMorganHouse LLC v. The Kingdom Group of Companies LLC

United States District Court, M.D. Georgia, Valdosta Division

August 26, 2019

HESSMORGANHOUSE, LLC, d/b/a HMH CONSULTING, Plaintiff,
v.
THE KINGDOM GROUP OF COMPANIES, LLC, d/b/a THE KINGDOM GROUP, et al., Defendants.

          ORDER

          HUGH LAWSON, SENIOR JUDGE

         Plaintiff HessMorganHouse, LLC, d/b/a HMH Consulting (“HMH”) entered into a series of written letter agreements with Defendant The Kingdom Group of Companies, LLC, d/b/a The Kingdom Group (“The Kingdom Group”)[1] to provide consulting, organizational, and administrative services related to the development and management of a group life insurance plan. Ultimately, the plan failed. The parties now dispute what sums, if any, remain owing for services performed under the contract.

         Currently pending before the Court are the parties' cross-motions for summary judgment. After reviewing the briefs, and with the benefit of oral argument, the Court DENIES Plaintiff's Motion for Partial Summary Judgment (Doc. 21) and GRANTS Defendants' Motion for Summary Judgment (Doc. 22).

         I. FACTUAL BACKGROUND[2]

         HMH is a life insurance consulting company. In June 2013, HMH entered into the first of a series of letter agreements with The Kingdom Group to provide consulting, organizational, and administrative services relating to the development and management of a group life insurance plan for the benefit of the National Hispanic Christian Leadership Conference. The first two agreements, dated June 27, 2013 and September 17, 2013, outlined the initial services HMH agreed to perform and the associated payment schedule. The fourth letter agreement, dated January 12, 2014, modified the payment schedule contemplated by the September 17, 2013 agreement. With the exception of The Kingdom Group asserting that it overpaid HMH by $5, 000.00, the parties do not dispute that HMH performed the services contracted for under these three agreements or that The Kingdom Group paid for the services rendered in full.

         This case arises out of a dispute concerning the language contained in the third letter agreement, which the parties entered into on December 24, 2013. The December 2013 letter agreement sets out two phases for work to be performed by HMH. The first phase pertains to “pre-rollout services, ” and the second phase addresses “post-rollout services.” The contract establishes a fee schedule for the pre-rollout services and further indicates that payment for those services shall be deferred in consideration of The Kingdom Group agreeing to retain HMH's services for the ongoing administration of the group term life insurance contract.

         HMH completed the pre-rollout phase, and in late 2015, the life insurance plan was launched and policies became available through Prudential, the selected insurer for the plan. Only three policies were sold, producing total commissions for The Kingdom Group of $262.80. On January 26, 2017, Prudential terminated its participation in the plan effective March 21, 2017. No. additional policies were sold. Consequently, HMH provided no further services under the December 2013 agreement. HMH alleges that The Kingdom Group owes $113, 818.00 plus other associated damages for the pre-rollout services performed under the December 2013 contract.[3] The Kingdom Group denies owing any further sums to HMH.

         II. SUMMARY JUDGMENT STANDARD

         A court “shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). “A party asserting that a fact cannot be or is genuinely disputed must support that assertion by . . . citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials.” Fed.R.Civ.P. 56(c)(1).

         The party seeking summary judgment “always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of a material fact.” Celotex, 477 U.S. at 323 (internal quotation omitted). If the movant meets this burden, the burden shifts to the party opposing summary judgment to go beyond the pleadings and present specific evidence showing that there is a genuine issue of material fact, or that the movant is not entitled to judgment as a matter of law. Id. at 324-26. “If the record presents factual issues, the court must not decide them; it must deny the motion and proceed to trial.” Herzog v. Castle Rock Entm't, 193 F.3d 1241, 1246 (11th Cir. 1999). But, when “the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, ” summary judgment for the moving party is proper.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

         III. ANALYSIS

         HMH moves for partial summary judgment, arguing that under the plain language of the contract in dispute, The Kingdom Group owes a total of $113, 818.00 for pre-rollout services performed. In its cross-motion for summary judgment, The Kingdom Group relies on a separate contractual term that it contends unambiguously limits any payment due to HMH. Based on its assertion that there is a valid contract and that there has been no breach of the contract, The Kingdom Group also moves for summary judgment on HMH's remaining claims for breach of the covenant of good faith and fair dealing, quantum meruit, account, and attorney's fees.

         A. Breach of Contract

         The sole dispute before the Court for resolution is whether under the terms of the December 24, 2013 letter agreement The Kingdom Group owes HMH for the pre-rollout Services performed under the contract. HMH maintains that it agreed to defer any payment for pre-rollout services conditioned upon The Kingdom Group retaining HMH for post-rollout services. Once the need for post-rollout services was eliminated by the termination of the life insurance plan, the condition could no longer be satisfied, and payment became due in full. The Kingdom Group argues that the agreement to retain HMH was a specific contractual term and not a condition and that the agreement regarding post-rollout services does not otherwise eliminate a separate term which The Kingdom Group points out clearly limits payment to a percentage of the total commissions received from the sale of the life insurance policies.

         Under Georgia law, “[i]t is the function of the court to construe the contract as written and not make a new contract for the parties.” Georgia Magnetic Imaging v. Greene Cty. Hosp. Auth., 219 Ga.App. 502, 504 (1995); see also Fernandes v. Manugistics Atlanta, 261 Ga.App. 429, 433 (2003) (“Neither the trial court nor this Court is at liberty to rewrite or revise a contract under the guise of construing it.”). Contract construction requires a three-step analysis. See Mitchell v. Cambridge Property Owners Assn., 276 Ga.App. 326, 327 (2005). The court first must decide whether the contract language at issue is ambiguous. Ga.-Pac. Corp. v. Lieberam, 959 F.2d 901, 904 (11th Cir. 1992). If the court determines that there is an ambiguity, then the court must utilize the applicable rules of contract construction. Id. If, after applying those rules the ambiguity remains, then a jury must resolve the ambiguity. Id. “Whether a contract is ambiguous is a question of law for the courts to decide.” Id.

         “Ambiguity exists where the words used in the contract leave the intent of the parties in question - i.e., that intent is uncertain, unclear, or is open to various interpretations.” Capital Color Printing, Inc. v. Ahern, 291 Ga.App. 101, 106 (2008). “Conversely, no ambiguity exists where, examining the contract as a whole and affording the words used therein their plain and ordinary meaning, the contract is capable of only one reasonable interpretation.” Id. (citation and quotation marks omitted); see also Perkins v. M & M Office Holdings, LLC, 303 Ga.App. 770, 773 (2010) (“Unambiguous language must be afforded its literal meaning and plain ordinary words given their usual significance.”) (citation and quotation marks omitted). If the language of the contract is unambiguous, “the court simply enforces the contract according to the terms, and looks to the contract alone for the meaning.” Am. Empire Surplus Lines Ins. Co. v. Hathaway Dev. Co., 288 Ga. 749, 750 (2011) (citation and quotation marks omitted).

         Under the terms of the December 24, 2013 letter agreement, the parties agreed that payment for pre-rollout services would be made according to a particular schedule:

         The Kingdom Group shall pay HMH at the hourly rate of $300 for the services set ...


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