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Polyloom Corp. of America v. Varsity Carpet Services, Inc.
Citations: 175 Ga. App. 806; 334 S.E.2d 386; 1985 Ga. App. LEXIS 2195Docket: 70378
Court: Court of Appeals of Georgia; September 5, 1985; Georgia; State Appellate Court
Appellant Polyloom Corporation of America, a yarn manufacturer, and appellees, the Varsity Group, both held creditor status against V. L. Manufacturing Company, which produced artificial turf carpet. In January 1984, Polyloom secured V. L.'s debt through a promissory note and a security agreement that granted Polyloom a security interest in all yarn and products made from it in V. L.’s inventory. A month later, Polyloom filed a financing statement for this security interest. The Varsity Group also sought to protect its interests through an oral agreement with V. L. allowing them to retain certain inventory as security for their debts, though no financing statement was filed. After V. L. defaulted, the Varsity Group repossessed the inventory, which led Polyloom to contest their right to the collateral, arguing that its security interest was superior. At trial, the Varsity Group's evidence, including testimony from V. L.’s president, defined "finished goods" and "greige goods," concluding that the goods in question were not finished and therefore not subject to Polyloom's security interest. Polyloom's subsequent motion for reconsideration, asserting there was a stipulation regarding the interchangeability of "finished goods" and "backed greige goods," was denied by the trial court. The court affirmed its decision, stating that Polyloom failed to provide sufficient evidence to support its claims regarding the definitions of the disputed terms and that it had no grounds to contest the acceptance of the Varsity Group’s evidence. The trial court found no stipulation existed regarding the terms in question, and Polyloom, as the plaintiff, bore the burden of proof, which it did not meet. The trial court's ruling was not based on incorrect evidence regarding the dyeing of the carpet, as claimed by the appellant; instead, it relied solely on the deposition of Avery, which indicated that finished goods required wrapping, sealing, and billing. The appellant's assertion that Avery's testimony violated the parol evidence rule is refuted, as the testimony clarified the ambiguous term "finished goods inventory" without altering the agreement's terms, making it admissible under the precedent set in Baker v. Jellibeans, Inc. The court also rejected the appellant's claim of an abuse of discretion for not vacating the judgment to allow additional evidence, affirming that only admissible evidence was considered and that any evidence not presented at trial due to the appellant's oversight was not grounds for a retrial, referencing McCullough v. Molyneaux and Maloy v. Dixon. The issue of the appellant's security interest being perfected by filing and its priority over the appellees’ interest was deemed moot after the court found that the subject matter of the alleged security interest did not exist. Lastly, the appellees' motion for a $500 penalty against the appellant under Rule 26 (b) was noted, but although the appellant's errors were deemed meritless, they were not considered frivolous. The judgment was affirmed, with concurrence from the Chief Judge and Presiding Judge.