HOLIDAY HOSPITALITY FRANCHISING v. Grant

865 So. 2d 257, 2004 WL 136392
CourtLouisiana Court of Appeal
DecidedJanuary 28, 2004
Docket38,103-CA
StatusPublished
Cited by1 cases

This text of 865 So. 2d 257 (HOLIDAY HOSPITALITY FRANCHISING v. Grant) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
HOLIDAY HOSPITALITY FRANCHISING v. Grant, 865 So. 2d 257, 2004 WL 136392 (La. Ct. App. 2004).

Opinion

865 So.2d 257 (2004)

HOLIDAY HOSPITALITY FRANCHISING, INC. f/k/a Holiday Inns Franchising, Inc., Plaintiffs-Appellees
v.
Joe Bailey GRANT and Gail L. Grant, Defendants-Appellants.

No. 38,103-CA.

Court of Appeal of Louisiana, Second Circuit.

January 28, 2004.

*259 Hayes, Harkey, Smith & Cascio by Thomas M. Hayes, III, Monroe, for Appellants.

H. Herbert Hobgood, Monroe, for Appellees.

Before WILLIAMS, CARAWAY and PEATROSS, JJ.

CARAWAY, J.

Following a default judgment against them rendered in the State of Georgia, the appellants challenge the enforcement of the judgment in this state asserting that the Georgia court lacked personal jurisdiction over them. The contract underlying the dispute was a license or franchise agreement which one appellant executed with a national hotel chain headquartered in Georgia. The other appellant acted as the guarantor of the agreement. The trial court found that minimum contacts were established by both appellants with the forum state. For the following reasons, we affirm the judgment against the original licensee appellant, but reverse the judgment against the guarantor.

Facts

Joe Bailey Grant and Gail Grant appeal the trial court's judgment in favor of Holiday Hospitality Franchising, Inc., f/k/a Holiday Inns Franchising, Inc. ("Holiday"), recognizing and making executory a Georgia default judgment against them under the Uniform Enforcement of Foreign Judgments Act ("UEFJA"). La. R.S. 13:4241, et seq. The Louisiana trial court found that the Grants had sufficient minimum contacts with the State of Georgia to permit its exercise of jurisdiction over them, and that the judgment was valid, thus entitled to the full faith and credit accorded judgments of sister states under the federal constitution.

The Georgia default judgment noted that the proceedings arose from several contracts between the parties, including a 1994 Holiday Inn license agreement, as amended in 1996, and defendants' personal guaranties of that contract. The judgment, for $1,092,329.02, stated that the amount consisted of unpaid monthly fees, liquidated damages, interest and attorney's fees.

The record shows that the business relationship between Holiday Inns Franchising, Inc. and Joe Bailey Grant ("Grant") was one of franchisor/licensor and franchisee/licensee, respectively, pursuant to which Grant operated the Holiday Inn in Monroe, Louisiana. On December 14, 1994, Holiday and Grant entered a "Renewal License Agreement" (the "1994 Agreement") detailing the specific terms of the franchise. Holiday licensed its "hotel management system" for a ten year term in exchange for Grant's monthly payments of a percentage of the hotel's revenue stream to Holiday. The contract provided that Grant would furnish monthly statements and remittances thereunder, as well as quarterly and annual financial statements subject to review and audit by Holiday *260 in connection with his operation of the Holiday Inn. Gail Grant's separate guaranty was appended to the 1994 Agreement.

The 1994 Agreement provided that the contract "shall be deemed made and entered into in the State of Georgia, and shall be governed and construed under and in accordance with the laws of the State of Georgia." Grant specifically acknowledged that by entering the agreement, he had "sought, voluntarily accepted and become associated with Licensor who is headquartered in Atlanta, Georgia." The Georgia choice of law designation "permits, but does not require that all suits concerning this License shall be filed in the State of Georgia."

On July 22, 1996, Holiday and Grant amended the 1994 Agreement to substitute a new licensee. The amendment recited that Grant was required to change the licensee's name because the hotel was in the process of being refinanced. Investor Inns Limited Partnership, a Louisiana limited partnership ("Investor Inns"), was substituted as the licensee. Investor Inns was comprised of a general corporate partner, Investor Inns, Inc., wholly-owned by Grant, and a limited corporate partner, Sara Gail, Inc., also wholly-owned by Grant. The 1994 Agreement contemplated that a licensee who was a natural person could transfer the license, as follows:

(2) If Licensee is a natural person, he may, without the consent of Licensor, upon 30 days' prior written notice to Licensor, transfer the license to a corporation entirely owned by him, provided that:
(a) adequate provision is made for the management of the Hotel; and
(b) the transferee executes a new license agreement for the unexpired term of this License, on the standard form then being used to license new Hotels under the System, except the fees charged then shall be the same as those contained herein including any adjustments to such fees as may have been implemented from time to time in accordance with the terms of this License; and
(c) the Licensee guarantees, in Licensor's usual form, the performance of the new licensee's obligations hereunder.

Another guaranty, signed by both Grants, was also included with the 1996 amendment. This guaranty warranted the performance of the new licensee's obligations under the 1994 Agreement. The guaranty further provided that it would be governed and construed under the laws of the State of Georgia.

Holiday filed suit in Louisiana under the UEFJA for recognition of the judgment it obtained against the Grants in Georgia. The trial court found that the Georgia judgment was entitled to full faith and credit. Thereafter, the Grants sought to nullify the judgment, alleging that the State of Georgia lacked jurisdiction over them. After the trial court initially granted Holiday's motion to strike the petition for nullity, the Grants appealed.[1] This court's opinion concluded that the Grants were entitled to the opportunity to present evidence that Georgia lacked jurisdiction over them and remanded the proceeding to the trial court with instructions to schedule a contradictory hearing to consider the Grants' arguments.

*261 Joe Bailey Grant was the only witness who testified at the hearing on remand. The substantive portion of the direct examination consisted of the following:

Q. Did you or your wife ever travel to Georgia to contact (sic) any business with Holiday Hospitality?
A. No.
Q. Did you otherwise have any minimal contact with Georgia (sic) Hospitality?
A. No, sir.
Q. I mean Holiday Hospitality.
A. No.
* * *
Q. Where was the 1994 license agreement... signed?
A. Monroe, Louisiana.

On cross-examination, Grant indicated that the Holiday Inn had been managed by his family prior to 1994. He testified that he was the president of the hotel's general partner, Investor Inns, Inc., and that was the capacity in which he communicated with and remitted funds to Holiday pursuant to the license agreement. Although he denied ever sending money to Holiday personally, he admitted communicating with them "as an operator" and that he had originally been the individual licensee. Grant also admitted to having negotiations with Holiday when the financial problems of Investor Inns developed. The only evidence presented concerning Mrs. Grant was Mr. Grant's testimony that neither he nor she had ever been domiciled in the State of Georgia.

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Bluebook (online)
865 So. 2d 257, 2004 WL 136392, Counsel Stack Legal Research, https://law.counselstack.com/opinion/holiday-hospitality-franchising-v-grant-lactapp-2004.