Textron Financial Corp. v. RV Sales of Broward, Inc. etc. ( 2010 )

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 10-11178 DEC 02, 2010
Non-Argument Calendar JOHN LEY
CLERK
________________________
D.C. Docket No. 0:08-cv-61449-PAS
TEXTRON FINANCIAL CORPORATION,
a Delaware corporation,
lllllllllllllllllllll Plaintiff - Counter-
lllllllllllllllllllll Defendant - Appellee,
versus
RV SALES OF BROWARD, INC.,
a Florida corporation,
lllllllllllllllllllll Defendant - Counter-
lllllllllllllllllllll Claimant - Appellant,
GIGI D. STETLER,
individually,
lllllllllllllllllllll Defendant - Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(December 2, 2010)
Before EDMONDSON, CARNES and MARTIN, Circuit Judges.
PER CURIAM:
A money lender, Textron Financial Corporation, entered into an inventory
financing arrangement with a recreational vehicle dealer, RV Sales of Broward,
Inc., and its president, sole director, and guarantor, Gigi Stetler.1 Textron and RV
Sales executed a Credit and Security Agreement, providing for Textron to finance
RV Sales’ inventory of recreational vehicles, to pay the manufacturers of those
vehicles, and to receive a security interest in them. The Credit Agreement
incorporated by reference individual invoices that Textron sent to RV Sales for
each vehicle financed, and that agreement also obligated RV Sales to pay Textron
the costs and the interest specified on each invoice.2
This case stems from a disagreement between Textron and RV Sales over
when it could begin charging the interest on the funds it paid to vehicle
manufacturers. Textron contends it could charge interest from the “interest start”
date printed on each invoice it sent to RV Sales; RV Sales contends that Textron
could only charge interest from the date that it actually paid the sum on the invoice
1
This opinion will refer to RV Sales and Stetler collectively as RV Sales.
2
At the top of each invoice is a title: “Statement of Financial Transaction.” The parties
refer to the invoices as “SOFTs” or “FTDs.” To avoid a confusing array of acronyms, we will
simply call them the invoices. The parties also call “the Credit and Security Agreement” the
CASA, but we will refer to it as the Credit Agreement.
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to the vehicle manufacturers, which was later than the interest start date on the
invoices. RV Sales defaulted on its payments to Textron. The sole issue on
appeal is whether the parties’ written agreements permitted Textron to charge RV
Sales interest on funds before Textron had actually paid those funds to vehicle
manufacturers.
I.
After RV Sales defaulted on its payments, Textron filed a lawsuit seeking an
injunction to prevent RV Sales from continuing to sell its inventory of recreational
vehicles. Textron claimed that RV Sales had breached the parties’ Credit
Agreement, and it made a demand on Stetler as the guarantor under that
agreement. Textron also sought immediate possession of RV Sales’ inventory and
an award of damages based on the expenses incurred in the process of
repossession and sale. The district court issued a temporary restraining order
directing RV Sales to return to Textron all of the unsold vehicles that Textron had
financed.
Later Textron filed a motion for summary judgment on its breach of contract
and breach of guaranty agreement claims. Textron sought the difference between
the amount it had financed and the smaller amount it had recovered from the sale
of the repossessed vehicles, which it described as the “deficiency.” In addition to
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the deficiency amount, it sought the principal owed, interest, attorney’s fees, and
costs. RV Sales counterclaimed, alleging beach of contract, breach of the implied
duty of good faith and fair dealing, and unjust enrichment—all based on the
amount of interest Textron had charged on the funds it had advanced to vehicle
manufacturers on RV Sales’ behalf. The parties did not dispute the amount of the
unpaid principal, but they did dispute the amounts of the deficiency, the costs, and
the interest Textron had charged.
The district court granted Textron’s motion for summary judgment, holding
that the parties’ agreements permitted Textron to begin charging interest on the
invoice date, which was submitted to RV Sales on the invoices that the Credit
Agreement incorporated by reference. The district court concluded that RV Sales
had consented to the interest start dates that were listed on the invoices because it
did not object to those dates, and under the Credit Agreement no objection meant
acceptance of the terms. Responding to RV Sales’ contention that the agreements
did not permit Textron to begin charging interest until after it had sent the money
for the recreational vehicles to the manufacturers on RV Sales’ behalf, the district
court reasoned that Textron had no duty to disclose to RV Sales the terms of its
separate payment arrangements with the manufacturers. Instead, the agreements
between RV Sales and Textron expressly set the dates for when the interest started
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running, and the dates when Textron made payments to the manufacturers were
irrelevant.
II.
We review de novo a district court’s grant of summary judgment, applying
the same legal standards as the district court. Chapman v. AI Transp., 229 F.3d
1012, 1023 (11th Cir. 2000) (en banc). “Contract interpretation is a question of
law and is subject to de novo review.” American Cas. Co. of Reading, Pa. v.
Etowah Bank, 288 F.3d 1282, 1285 (11th Cir. 2002). It is undisputed that under
the terms of the parties’ agreements Rhode Island law applies. “[U]nless the terms
of a written contract are ambiguous, it should be interpreted as a matter of law in
accordance with its plain terms.” Rhode Island Depositors Econ. Prot. Corp. v.
Coffey and Martinelli, Ltd., 821 A.2d 222, 226 (R.I. 2003).
The parties’ agreements permit Textron to charge the interest that it did.
Each invoice set forth the cost of the recreational vehicle being financed along
with a specific interest rate and interest start date. Under the Credit Agreement,
RV Sales agreed to pay those amounts as set forth in each invoice. The Credit
Agreement provides that RV Sales “promises to pay to [Textron] the original
invoice cost (“Invoice Cost”) of each item of Inventory financed or refinanced for
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[RV Sales] by [Textron] pursuant to each applicable FTD,3 together with interest
and charges on the Invoice Cost and/or fees on the account as specified in each
applicable FTD and this Agreement (collectively, the “Total Debt”).” Doc. 1, Exh.
A at ¶ 3.
The Credit Agreement also provides that unless RV Sales objected in
writing to an invoice within ten days of the date it was received, RV Sales
accepted the terms of that invoice, and those terms were incorporated into the
Credit Agreement. Id. Specifically, the Credit Agreement states:
[RV Sales’] failure to notify [Textron] in writing of any objection to a
particular FTD within ten (10) days of the date such FTD is first made
available to [RV Sales] shall constitute [RV Sales’] acceptance of all
the terms thereof; (b) agreement that [Textron] is financing such
Inventory at [RV Sales’] request; and (c) agreement that such FTD
will be incorporated herein by reference.
Id. It is undisputed that RV Sales did not object in writing to the invoices it
received from Textron. Those invoices expressly set out the date on which interest
would begin to accrue, which was the same as the invoice date. See, e.g., id. at
Exh. D, “Statement of Financial Transaction,” (“Invoice Date: 06/05/2008” and
“Interest Start: 06/05/2008”). Thus, RV Sales did not object to interest beginning
3
The Credit Agreement refers to an invoice as an “FTD.”
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to run from those specific dates, regardless of when Textron paid the vehicle
manufacturers.4
The Credit Agreement expressly provided that advances to vehicle
manufacturers would be made solely according to Textron’s discretion and that
RV Sales had no right to expect otherwise based on Textron’s agreements with
manufacturers. Id. at Exh. A, ¶ 2 (“[RV Sales] understands and agrees that each
Advance will be solely at [Textron’s] discretion, and [RV Sales] expressly
disclaims any right to expect otherwise as a result of . . . [Textron’s] arrangements
with any Manufacturer.”). In the Credit Agreement, RV Sales agreed “that its
obligations to [Textron] with respect to collateral financed by [Textron] shall be
absolute and unconditional at all times after [Textron] has advanced or committed
to advance all or any part of the invoice cost of such collateral to the seller
thereof.” Id. at Exh. A., ¶ 5 (capitalization altered and emphasis added). Thus,
according to the express terms of the Credit Agreement, RV Sales was obligated to
pay Textron the invoice cost—which included interest running from a specified
4
Under its separate agreements with vehicle manufacturers, Textron committed to pay the
manufacturers ten to fifteen days after the invoice date. Textron did not have an affirmative duty
to disclose to RV Sales the terms of its separate agreements with vehicle manufacturers. If the
parties had wanted certain disclosure requirements, they could have bargained for them and
included them in their written agreements. See Aneluca Assocs. v. Lombardi, 620 A.2d 88, 92
(R.I. 1993) (“Absent illegality, contracting parties are free to bargain as they see fit. When the
bargained-for agreement is reduced to writing, a court may not make a new contract for the
parties or rewrite the existing contract.”) (quotation marks omitted).
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date—even if Textron had not actually advanced funds to a vehicle manufacturer
but had only “committed to advance” those funds.
Because the unambiguous terms of the parties’ written agreements obligated
RV Sales to pay the interest that Textron charged, the district court did not err by
granting summary judgment in favor of Textron.
AFFFIRMED.
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