American Equipment Services, Inc. v. Evans Trailer Leasing Co.

650 F. Supp. 1266, 1986 U.S. Dist. LEXIS 17154
CourtDistrict Court, N.D. Georgia
DecidedNovember 26, 1986
DocketCiv. A. C85-3873A
StatusPublished

This text of 650 F. Supp. 1266 (American Equipment Services, Inc. v. Evans Trailer Leasing Co.) is published on Counsel Stack Legal Research, covering District Court, N.D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
American Equipment Services, Inc. v. Evans Trailer Leasing Co., 650 F. Supp. 1266, 1986 U.S. Dist. LEXIS 17154 (N.D. Ga. 1986).

Opinion

ORDER

ROBERT H. HALL, District Judge.

Plaintiff brings this action alleging breach of contract and fraud and seeking declaratory, injunctive and monetary relief. Defendant brings a counterclaim seeking damages and expenses of litigation. This court’s jurisdiction is predicated upon diversity of citizenship, 28 U.S.C. § 1332. Currently before the court is defendant’s motion for summary judgment on plaintiff’s claims and defendant’s counterclaims. 1 For the reasons set forth herein, the court PARTIALLY GRANTS and PARTIALLY DENIES defendant’s motion.

FACTS

Plaintiff, American Equipment Services, Inc. (“AmQuip”), is in the business of renting and leasing over-the-road trailers in the metropolitan Atlanta area to private trucking companies or large corporations with truck fleets. Deposition of Bruce J. Gianetti, p. 172-173 (“Gianetti Depo.”). Am-Quip was formed in the fall of 1978 at which time its principals were James R. (Bob) Bennett and Bruce J. Gianetti. 2 Thomas E. Sullivan, who was Vice-President of Bob Bennett Trucking Company, was selected by Bennett and Gianetti to handle the acquisition of trailer equipment for AmQuip’s use in the short-term rental market. Deposition of Thomas E. Sullivan, pp. 5-6, 11-12 (“Sullivan Depo.”); Gianetti Depo., p. 115.

Sullivan investigated several trailer manufacturers including Budd, Strick, Trailmobile, Fruehauf, Dorsey and Evans Products Company. Evans Products Company, through its Monon Trailer Division (“Mo-non”) was primarily in the business of manufacturing and selling trailers with the Mo-non trade name. Gianetti Depo., p. 173. Defendant Evans Trailer Leasing Company (“Evans”) is a separate corporation which financed the trailer sold by Evans Products Company by purchasing them from Monon and leasing them on a long-term basis. *1268 Deposition of Richard E. Dessimoz, pp. 7, 90 (“Dessimoz Depo.”). Thus, Evans is also in the business of renting trailers to customers. Gianetti Depo., pp. 140-142, 184-185, 187-190.

In the fall of 1978 both Sullivan and Gianetti handled discussions and negotiations with various trailer manufacturers. Eventually, AmQuip decided to enter into a leveraged lease agreement with Evans because Evans offered the best financing package. Sullivan Depo., p. 10. Accordingly, on April 11,1979, AmQuip and Evans entered into a written equipment lease agreement which provided for the rental of 167 Monon trailers for a period of between eight and ten years. See Sullivan Depo., Exhibit “1”. On October 23, 1980, the parties entered into a second equipment lease agreement for the lease of 100 trailers for a ten year period. See Sullivan Depo., Exhibit “2”.

AmQuip contends that, prior to entering into the 1979 lease agreement, the parties reached a verbal agreement that Evans would not compete with AmQuip in short-term rentals (sometimes referred to as “casual rentals”) in the Atlanta market for the duration of the lease that AmQuip had with Evans. Sullivan Depo., pp. 19-23, 51-54. Although the parties never entered into a written covenant not to compete, AmQuip alleges that the parties reached an oral non-competition agreement which agreement formed the consideration for AmQuip’s execution of both the 1979 and 1980 long term lease. Id.; See also Gianetti Depo., pp. 121, 130-131, 155-157.

Evans admits that the parties discussed the issue of non-competition between Evans and AmQuip. Evans further admits that its ultimate purpose in the trailer rental market was to dispose of trailers manufactured by its parent either by sale or long-term lease. Evans does not dispute that in the fall of 1980 it did not believe that the short term rental market would be profitable. Dessimoz Depo., pp. 42, 85. See also Dessimoz letter dated September 16, 1980, Dessimoz Depo., Exhibit “D5”. Evans denies, however, that a non-competition agreement was ever reached. It argues that the terms of such an agreement remained vague and indefinite and that the parties never achieved a “meeting of the minds” with regard to a covenant not to compete. See Defendant’s Brief in Support of Motion for Summary Judgment; Dessimoz Depo., pp. 36-38.

Although Evans maintained a sales office in Atlanta, until 1981 Evans’ presence in Atlanta apparently was restricted to the sale and long-term lease market. Evans may have had approximately twenty trailers engaged in short-term rental activity in Atlanta, however, those were available for rental as a part of the sale and long-term lease effort. Dessimoz Depo., p. 50. In 1981, however, approximately 50% of the national trailer companies went into bankruptcy and Evans began receiving back from these companies large numbers of trailers which had been on long-term leases. Evans took back approximately 4000 trailers and put approximately 1500 trailers into the short-term rental market. Dessimoz Depo., p. 81. By February 1985, Evans’ short-term rental fleet in Atlanta had risen to an inventory of 350 trailers. Id. at 78.

Because Evans was competing with Am-Quip in the short-term rental market, Am-Quip ceased making its monthly lease payments to Evans in February 1985. In July 1985 it instituted the instant action against Evans in the Superior Court of Fulton County claiming Evans breached the alleged oral non-competition agreement and misrepresented to plaintiff that it would not compete against it with the intent of deceiving plaintiff into entering into the lease agreements. Plaintiff also seeks reimbursement from Evans of all sums paid to Evans under the leases, rescission of the leases, specific performance of the alleged non-competition agreement, and interlocutory and permanent injunctions to prevent defendant from repossessing the trailers. Defendants 3 removed the action to this *1269 court and filed their counterclaim seeking past due rentals, liquidated damages, the deficiency obtained in repossessing and re-letting the trailers, and expenses of litigation.

On April 21, 1986, Evans filed its “Verified Complaint and Petition for Writ of Possession” in the State Court of Clayton County. On June 30, 1986, the Honorable Harold G. Benefield granted Evans’ Writ of Possession with respect to certain of the trailers, requiring AmQuip to make rental payments into court with respect to the trailers retained by AmQuip. American Equipment Services, Inc. v. Evans Trailer Leasing Co., Civil Action No. 86848-2 (State Court, Clayton County, June 30, 1986). Since June 30, 1986, AmQuip has turned over and Evans has accepted 247 trailers. AmQuip has paid into the registry of the state court $33,278.98 for the trailers which it retained. 4 See Plaintiff’s Brief in Opposition to Defendant’s Motion for Summary Judgment, p. 8. Further facts will be disclosed as necessary for discussion of the motion.

DISCUSSION

Although plaintiff alleges that it reached an agreement with Evans with regard to a covenant not to compete, defendant denies that the parties entered into a binding oral agreement.

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Bluebook (online)
650 F. Supp. 1266, 1986 U.S. Dist. LEXIS 17154, Counsel Stack Legal Research, https://law.counselstack.com/opinion/american-equipment-services-inc-v-evans-trailer-leasing-co-gand-1986.