Alabama Boating Centers, Inc. v. Textron, Inc.

67 So. 3d 61, 2011 Ala. LEXIS 10, 2011 WL 118255
CourtSupreme Court of Alabama
DecidedJanuary 14, 2011
Docket1100032
StatusPublished
Cited by9 cases

This text of 67 So. 3d 61 (Alabama Boating Centers, Inc. v. Textron, Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Alabama Boating Centers, Inc. v. Textron, Inc., 67 So. 3d 61, 2011 Ala. LEXIS 10, 2011 WL 118255 (Ala. 2011).

Opinions

LYONS, Justice.

Textron, Inc., Textron Financial Corporation, and James M. Regan petition this Court for a writ of mandamus directing the St. Clair Circuit Court to dismiss, based on forum-selection clauses, claims asserted against them by Alabama Boating Centers, Inc.; Ryan Creek Acquisitions, Inc.; Logan Martin Boating Center, Inc.; Ryan Creek Boating Center, Inc.; Billy M. Cosper, Jr.; Andrew J. Kaufmann, Jr.; ABM Acquisition and Development, LLC; and Donald F. Seibert. We deny the petition in part, grant it in part, and issue the writ.

Factual Background, and Procedural History

Ryan Creek Acquisitions, Inc. (“Ryan Creek Acquisitions”), was an Alabama corporation that sold recreational boats to consumers. In 2007, Ryan Creek Acquisitions changed its name to Alabama Boating Centers, Inc. (“Alabama Boating”); it has continued to sell recreational boats under that name. Logan Martin Boating Center, Inc. (“Logan Martin”), is also an Alabama corporation that sells recreational boats to consumers. It appears from the documents presented to us that Alabama Boating and Logan Martin are independent entities that share some of the same owners and officers.

Textron Financial Corporation (“Tex-tron Financial”) is a Delaware corporation with headquarters in Rhode Island and offices in several states. Textron Financial is a subsidiary of Textron, Inc. (“the Textron parent”), also a Delaware corporation with headquarters in Rhode Island.

On December 5, 2006, Ryan Creek Acquisitions entered into a credit and security agreement with Textron Financial (“the 2006 agreement”). The 2006 agreement provided that Textron Financial would finance Ryan Creek Acquisitions’ purchase of inventory and that Textron Financial would receive a security interest in that inventory and in other of Ryan Creek Acquisitions’ assets to secure the resulting debt. Paragraph 11 of the 2006 agreement granted Textron Financial the right, upon default by Ryan Creek Acquisitions, to repossess the collateral made the subject of the security interest. That paragraph stated, in part:

“If an event of default occurs, Secured Party shall have all of the rights and [63]*63remedies of a secured party under the Uniform Commercial Code and any other applicable laws. Debtor agrees that Secured Party may, by itself or through an agent, without notice to any person and without judicial process of any kind, enter in any premises or upon any land owned, leased, or otherwise under the apparent control of Debtor, where secured party believes the collateral may be, and disassemble, render unusable and/or repossess all or any items of the collateral. Debtor expressly waives all rights to possession of the collateral after default and all claims for injuries suffered through or loss caused by such injury or repossession by Secured Party. Debtor shall, upon demand by Secured Party, assemble the collateral and return it to Secured Party at a place designated by Secured Party.”

Paragraph 16 of the 2006 agreement contained the following forum-selection clause:

“This Agreement shall be governed, construed and enforced in accordance with the laws of the State of Rhode Island without reference to conflict of laws principles. Debtor consents to the exclusive jurisdiction of the Courts of the State of Rhode Island, sitting in Providence, Rhode Island and the United States District Court for the District of Rhode Island for all purposes in connection with this Agreement. Debtor hereby waives and agrees not to assert any objection to the jurisdiction of any such Courts, including the objection of inconvenient forum.”

Billy M. Cosper, Jr., Andrew J. Kauf-mann, Jr., and Donald F. Seibert personally guaranteed Ryan Creek Acquisitions’ obligations under the 2006 agreement. Each of their guaranty agreements included the following choice-of-law and forum-selection clauses: “This Guaranty shall be governed by, and construed in accordance with, the laws of the State of Rhode Island, without reference to applicable conflict of law principles. Guarantor consents to the jurisdiction and venue of Rhode Island courts in connection with Textron [Financial] ⅛ enforcement of any of Guarantor’s obligations under this guaranty.”

On March 5, 2007, Logan Martin entered into a credit and security agreement with Textron Financial (“the 2007 agreement”). The 2007 agreement provided that Textron Financial would finance Logan Martin’s inventory and would receive a security interest in the inventory and in other of Logan Martin’s assets to secure the resulting debt. The 2007 agreement contained repossession and forum-selection provisions identical to those in paragraphs 11 and 16 of the 2006 agreement. Cosper, Kaufmann, Seibert, and ABM Acquisition and Development, LLC (“ABM”), guaranteed Logan Martin’s obligations under the 2007 agreement. Each of their guaranty agreements included choice-of-law and forum-selection provisions identical to those in the guaranty agreements executed with the 2006 agreement.

On May 8, 2008, Logan Martin and Ryan Creek Acquisitions, under its new name, Alabama Boating, jointly entered into another credit and security agreement with Textron Financial (“the 2008 agreement”). Under the 2008 agreement, Tex-tron Financial would finance the acquisition of inventory for both companies and would receive security interests in their inventory and other assets to secure the resulting debt. The 2008 agreement contained repossession and forum-selection provisions identical to those in paragraphs 11 and 16 of the 2006 agreement. Cosper and Kaufmann guaranteed Alabama Boating’s and Logan Martin’s obligations under the 2008 agreement. Their guaranty agreements contained choice-of-law and forum-selection clauses identical to those [64]*64contained in their earlier guaranty agreements.

Under the 2006 agreement and the 2008 agreement, Textron Financial ultimately provided approximately $4,200,000 in inventory financing first to Ryan Creek Acquisitions and subsequently to Alabama Boating. Under the 2007 agreement and the 2008 agreement, Textron Financial ultimately provided approximately $2,500,000 in inventory financing to Logan Martin. On October 24, 2008, Textron Financial wrote Alabama Boating and Logan Martin and advised them that, although Textron Financial “remain[ed] firmly committed to the marine industry,” due to “turbulence” in worldwide credit markets, Textron Financial would be changing pricing structures and increasing the interest rates Alabama Boating and Logan Martin paid under the 2006 agreement, the 2007 agreement, and the 2008 agreement (collectively, “the financing agreements”). Kaufmann signed agreements on behalf of both companies, acknowledging Textron Financial’s proposed changes. On December 31, 2008, Textron Financial wrote Alabama Boating and Logan Martin again, this time advising them that, as a result of continued “negative economic conditions,” Textron Financial would “no longer provide wholesale financing to the marine industry”; that the financing agreements would be canceled as of February 27, 2009; and that the outstanding debt under the financing agreements must be paid. Alabama Boating, Logan Martin, and the various guarantors maintain that Textron Financial knew in October 2008 that it intended to stop financing marine products but that it concealed that information from them.

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Alabama Boating Centers, Inc. v. Textron, Inc.
67 So. 3d 61 (Supreme Court of Alabama, 2011)

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Bluebook (online)
67 So. 3d 61, 2011 Ala. LEXIS 10, 2011 WL 118255, Counsel Stack Legal Research, https://law.counselstack.com/opinion/alabama-boating-centers-inc-v-textron-inc-ala-2011.