James B. Tafel, Jr. v. Lion Antique Investments & Consulting Services

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
No. 11-14401 ELEVENTH CIRCUIT
MARCH 1, 2012
Non-Argument Calendar
JOHN LEY
________________________
CLERK
D.C. Docket No. 1:10-cv-03260-TWT
JAMES B. TAFEL, JR.,
Plaintiff-Counter Defendant-
Appellee,
versus
LION ANTIQUE INVESTMENTS & CONSULTING SERVICES,
Defendant-Counter Claimant-
Appellant.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
________________________
(March 1, 2012)
Before TJOFLAT, EDMONDSON, and COX, Circuit Judges.
PER CURIAM:
Lion Antique Investments and Consulting Services (“Lion”) appeals the
summary judgment granted in favor of James B. Tafel, Jr. (“Tafel”) on Tafel’s claim
seeking a declaration that a promissory note is invalid and unenforceable. We affirm.
Tafel is the former CEO of Tafel Racing. In January of 2008, Tafel Racing and
East Coast Jewelry (“East Coast”) entered a purchase agreement for a Ferrari race car.
Under the agreement, East Coast would pay Tafel Racing $700,000 in ten
installments in exchange for the race car and some advertising services. No one
disputes that Tafel Racing received most of this $700,000 but never delivered a car
to East Coast.
On February 13, 2009, Tafel gave a non-negotiable1 note (the “Note”) to non-
party Vladislav Yampolsky (“Yampolsky”), a partial owner of East Coast.
Yampolsky later assigned his interest in the Note to Lion. In the Note, Tafel
promised to pay Yampolsky the principal amount of $600,000 plus accrued interest
of $22,454.14 “in consideration of advances by Yampolsky to Tafel, net of certain
credits.” (R. 1, Ex. A at 1.) According to the Note, a lien on Tafel’s personal
residence secured this debt. Nevertheless, Tafel has never made payment on the
Note.
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The parties agree that the Note is not a negotiable instrument. (R. 37 at 3; R. 22-1 at 7.)
Thus, Georgia contract law governs this appeal.
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Tafel filed a complaint against Lion seeking a declaratory judgment that the
Note was unenforceable due to a lack of consideration. Lion counterclaimed for
breach of contract. Both parties filed motions for summary judgment. When ruling
on the motions, the district court agreed with Tafel that the Note lacked consideration
and granted Tafel’s motion for summary judgment. Lion appeals. Lion challenges
this ruling and raises the following issues2: first, whether adequate consideration
supports the Note; and second, whether judicial estoppel prevents Tafel from
challenging the validity of the Note.
“We review a grant of summary judgment by a district court de novo.” Gish
v. Thomas, 516 F.3d 952, 954 (11th Cir. 2008) (citing Cruz v. Publix Super Mkts.,
Inc., 428 F.3d 1379, 1382 (11th Cir. 2005)). “We apply the same legal standards as
the district court and view all facts and reasonable inferences in the light most
favorable to the nonmoving party.” Id. (citing Strickland v. Water Works & Sewer
Bd., 239 F.3d 1199, 1203 (11th Cir. 2001)). “[W]e review the district court’s
application of judicial estoppel for abuse of discretion.” Robinson v. Tyson Foods,
Inc., 595 F.3d 1269, 1273 (11th Cir. 2010) (citing Talavera v. Sch. Bd. of Palm Beach
Cnty., 129 F.3d 1214, 1216 (11th Cir. 1997).
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Lion also argues that the district court erred by denying its motion for summary judgment
seeking to enforce the Note. Because we hold the Note lacked adequate consideration, we conclude
the district court did not err in denying Lion’s motion for summary judgment.
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Lion argues that the Note’s recitals contain evidence of consideration. It also
asserts that the Note resulted from a bargained for exchange. As evidence of this
bargain, Lion suggests Yampolsky agreed to delay collection activities on a debt
Tafel Racing owed East Coast, agreed to accept less than the statutorily allowed rate
of interest on this debt, and reduced the amount owed on the debt. In exchange, Tafel
secured the Note by placing a lien on his residence. We agree with the district court
that neither the recited consideration nor this suggested bargain provide adequate
consideration.
As the district court explained in its well-reasoned opinion, the recited
consideration was past consideration and cannot support the contract. (R. 39 at 5);
see also Whitmire v. Watkins, 267 S.E.2d 6, 7 (Ga. 1980) (“The general rule is that
a past consideration will not support a subsequent promise.” (quoting Bankers’ Trust
& Audit Co. v. Farmers’ & Merchants’ Bank, 136 S.E. 143, 143 (Ga. 1926))). The
district court also correctly disposed of Lion’s argument that a bargained for
exchange establishes consideration for the Note. The court reasoned that there was
no evidence East Coast assigned any claim it might have against Tafel or Tafel
Racing to Yampolsky. (R. 39 at 7-8.) Nor does the evidence show Yampolsky
agreed to forfeit any rights East Coast might have against Tafel Racing for Tafel
Racing’s failure to deliver a race car. (Id. at 6-7.) Thus, having considered the briefs
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and relevant parts of the record, we hold the Note was unenforceable for the reasons
stated in the district court’s opinion.
We also hold that the district court did not abuse its discretion by failing to
apply judicial estoppel. As Tafel highlights in his brief, Lion raised its judicial
estoppel argument in its reply brief in support of its motion for summary judgment.
(Appellee Br. at 32-33.) The district court had no obligation to consider an argument
raised for the first time in the reply brief. United States v. Ga. Dep’t of Natural Res.,
897 F. Supp. 1464, 1471 (N.D. Ga. 1995). Therefore, it did not abuse its discretion
by failing to address this argument.
AFFIRMED.
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