PANAPRINT, INC v. C2 MULTIMEDIA, INC. et al
Filing
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ORDER: The Court accordingly ORDERS Panaprint to amend its complaint within 14 days of this Order if it believes it can, in good faith, allege sufficient facts to state a claim for which relief may be granted for breach of contract. Ordered by US DISTRICT JUDGE MARC THOMAS TREADWELL on 11/9/2017. (tlh)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
MACON DIVISION
PANAPRINT, INC.,
Plaintiff,
v.
C2 MULTI MEDIA, INC., AND
CORDACO HOMES, INC.,
Defendants.
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CIVIL ACTION NO. 5:17-CV-140 (MTT)
ORDER
Plaintiff Panaprint, Inc. alleges that Defendants C2 Multi Media, Inc. and Cordaco
Homes, Inc. breached their contracts to use Panaprint to print magazines by unilaterally
canceling the contracts in violation of the Uniform Commercial Code or, in the
alternative, general contract law. See generally Doc. 1-1. C2 Multi Media and Cordaco
Homes, which share the same address and two owners, removed the case to this
Court, invoking diversity jurisdiction as to the claim against C2 Multi Media and diversity
or supplemental jurisdiction as to the claim against Cordaco Homes. Docs. 1 at 2-4, 810, 12-13; 1-1 at 1. C2 Multi Media and Cordaco Homes now move to dismiss
Panaprint’s complaint for failure to state a claim on which relief can be granted pursuant
to Federal Rule of Civil Procedure 12(b)(6). Doc. 2. C2 Multi Media and Cordaco
Homes argue that the signed documents that Panaprint alleges are contracts are,
instead, price quotations which did not obligate C2 Multi Media and Cordaco Homes to
purchase any magazines from Panaprint. Doc. 2 at 1-3. For the reasons discussed
below, the Court agrees that Panaprint’s complaint is deficient, but the Court gives
Panaprint an opportunity to amend. Accordingly, Panaprint is ORDERED to amend its
complaint within 14 days to allege additional facts sufficient to state a claim for which
relief may be granted, if it believes it can do so in good faith.
I. BACKGROUND
Panaprint asserts that it began supplying C2 Multi Media and Cordaco Homes
with “printed products” in 2009. Doc. 1-1 ¶ 8. Specifically, Panaprint produced a
magazine called “Resource Living Magazine” for C2 Multi Media and magazines called
“Cordaco Luxury,” “Quarterfold Magazine Options,” and “Broward Options” for Cordaco
Homes. Id. ¶¶ 9-10. Panaprint sent quotations to C2 Multi Media and Cordaco Homes,
and “[i]f the quotation was acceptable . . . then C2 Multi Media or Cordaco Homes
contracted to do business with Panaprint by having an authorized representative sign or
initial the quotation and returning it to Panaprint.” Id. ¶ 11.
C2 Multi Media returned a signed quotation to Panaprint guaranteeing the prices
quoted from August 1, 2016 to July 31, 2018. Id. ¶¶ 12-13. Cordaco Homes returned a
signed quotation to Panaprint to guarantee the prices quoted from June 4, 2015 to
December 31, 2016. Id. ¶ 18. On June 30, 2016, the owners of C2 Multi Media and
Cordaco Homes mailed Panaprint a notice that they had “decided to print our Resource
Living and Cordaco Homes Titles with another vendor.” Doc. 1-8. Panaprint argues
that the cancellation letter constituted a breach of contract under the Uniform
Commercial Code or, in the alternative, under general contract law and therefore
Panaprint is entitled to damages arising from the breach, as well as attorney’s fees and
litigation costs. Doc. 1-1 ¶¶ 20-22, 24-26, 30, 34, 36.1
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C2 Multi Media and Cordaco Homes are distinct business entities which entered into separate contracts
with Panaprint. Doc. 1-1 ¶¶ 2-3. But they share an address, the same exclusive owners, and counsel in
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C2 Multi Media and Cordaco Homes removed the case to federal court and have
moved to dismiss for failure to state a claim pursuant to Federal Rule of Civil Procedure
12(b)(6). Docs. 1; 2.2
II. DISCUSSION
A.
Motion to Dismiss Standard
The Federal Rules of Civil Procedure require that a pleading contain a “short and
plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ.
P. 8(a)(2). To avoid dismissal pursuant to Rule 12(b)(6), a complaint must contain
sufficient factual matter to “state a claim to relief that is plausible on its face.” Ashcroft
this case, and the same letter constituted the alleged breach for both. Docs. 1 at 3, 16; 1-1 ¶¶ 5-6, 15,
17. Accordingly, both parties logically treat the allegations against C2 Multi Media and Cordaco Homes
together for purposes of the motion to dismiss. See Doc. 9 at 1 n.1 (“[T]he Plaintiff’s response does not
draw any distinction between the contracts for the purpose of resolving the Defendants’ Motion to
Dismiss.”). The Court does the same.
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C2 Multi Media and Cordaco Homes invoke the Court’s diversity jurisdiction pursuant to 28 U.S.C. §
1332(a), which gives federal district courts original jurisdiction in cases between citizens of different states
“where the matter in controversy exceeds the sum or value of $75,000.” Doc. 1 at 2. “[W]here jurisdiction
is based on a claim for indeterminate damages . . . the party seeking to invoke federal jurisdiction bears
the burden of proving by a preponderance of the evidence that the claim on which it is basing jurisdiction
meets the jurisdictional minimum.” Federated Mut. Ins. Co. v. McKinnon Motors, LLC, 329 F.3d 805, 807
(11th Cir. 2003) (citations omitted). Panaprint’s complaint shows that the parties are completely diverse.
Doc. 1-1 ¶¶ 4-6. As to the amount in controversy, the Court agrees that Panaprint’s breach of contract
claim against C2 Multi Media clearly appears to exceed $75,000. See Doc. 1 at 6-8 (demonstrating that
the statutory requirement for amount in controversy is probably exceeded pursuant to multiple methods of
estimation). C2 Multi Media and Cordaco Homes argue that, while the damages arising from Cordaco
Homes’s alleged breach are smaller than those arising from C2 Multi Media’s breach, the Court has
jurisdiction over that claim as well because (1) amount in controversy “could easily approach or exceed”
$75,000 when attorney’s fees and litigation costs are included, or (2) supplemental jurisdiction exists
pursuant to 28 U.S.C. § 1367(a). Doc. 1 at 8-14. The Court is not convinced, on this record, that
attorney’s fees and litigation costs will bring the amount in controversy of the Cordaco Homes claim
above $75,000. But 28 U.S.C. § 1367(a) vests district courts with “supplemental jurisdiction over all other
claims that are so related to claims in the action within such original jurisdiction that they form part of the
same case or controversy under Article III of the United States Constitution.” In this case, the claims
against Cordaco Homes arise from the same letter as the claims against C2 Multi Media; Panaprint is the
plaintiff alleging breach in both claims, the alleged contracts at issue in the claims against are very
similar, and resolving the claims against both will involve overlapping evidence and legal and factual
issues. See generally Doc. 1-1. Accordingly, the Court exercises its supplemental jurisdiction over the
claims against Cordaco Homes. See Palmer v. Hosp. Auth. of Randolph Cty., 22 F.3d 1559, 1563-64
(11th Cir. 1994) (“The Georgia Plaintiffs’ state-law claims all arise from the same two events as the
[federal] claims. They will involve the same witnesses, presentation of the same evidence, and
determination of the same, or very similar, facts. Accordingly, it was within the power of the district court
to exercise supplemental jurisdiction over the state-law claims . . . .”).
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v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570 (2007)). “At the motion to dismiss stage, all well-pleaded facts are accepted as
true, and the reasonable inferences therefrom are construed in the light most favorable
to the plaintiff.” Garfield v. NDC Health Corp., 466 F.3d 1255, 1261 (11th Cir. 2006)
(quotation marks and citation omitted). However, “where the well-pleaded facts do not
permit the court to infer more than the mere possibility of misconduct, the complaint has
alleged—but it has not ‘show[n]’—‘that the pleader is entitled to relief.’” Iqbal, 556 U.S.
at 679 (quoting Fed. R. Civ. P. 8(a)(2)). “[C]onclusory allegations, unwarranted
deductions of facts or legal conclusions masquerading as facts will not prevent
dismissal.” Oxford Asset Mgmt., Ltd. v. Jaharis, 297 F.3d 1182, 1188 (11th Cir. 2002)
(citations omitted). The complaint must “give the defendant fair notice of what the . . .
claim is and the grounds upon which it rests.” Twombly, 550 U.S. at 555 (quotation
marks and citation omitted). Where there are dispositive issues of law, a court may
dismiss a claim regardless of the alleged facts. Marshall Cty. Bd. of Educ. v. Marshall
Cty. Gas Dist., 992 F.2d 1171, 1174 (11th Cir. 1993) (citations omitted).
B.
Applicable Georgia Law
The alleged contracts in this case provide that the agreements be interpreted
according to Georgia law. Doc. 1-1 at 15, 18. Further, the documents were drafted by
and mailed to Panaprint, whose address is located in Macon, Georgia. Id. at 14-15, 1718; see In re Club Assocs., 951 F.2d 1223, 1229 (11th Cir. 1992) (“Executed in Georgia,
the security deed is governed by Georgia contract law, lex loci contractus.” (citation
omitted)). Panaprint has alleged claims for breach of contract under the Uniform
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Commercial Code. In the alternative, Panaprint has alleged breach of contract under
general contract law.
As to claims under the Uniform Commercial Code, in Georgia:
Except as otherwise provided in this Code section a contract
for the sale of goods for the price of $500.00 or more is not
enforceable by way of action or defense unless there is
some writing sufficient to indicate that a contract for sale has
been made between the parties and signed by the party
against whom enforcement is sought or by his authorized
agent or broker. A writing is not insufficient because it omits
or incorrectly states a term agreed upon but the contract is
not enforceable under this paragraph beyond the quantity of
goods shown in such writing.
O.C.G.A. § 11-2-201(1). “A contract for sale of goods may be made in any manner
sufficient to show agreement, including conduct by both parties which recognizes the
existence of such a contract.” O.C.G.A. § 11-2-204(1). Certain “parol evidence” outside
the four corners of the agreement, such as the parties’ previous course of performance
or dealing or trade usage, may not be used to contradict contract terms but may be
used to “explain[] or supplement[]” contract terms. O.C.G.A. § 11-2-202.
As to Panaprint’s claims in the alternative under general contract law, Georgia
law is similar. “To constitute a valid contract, there must be parties able to contract, a
consideration moving to the contract, the assent of the parties to the terms of the
contract, and a subject matter upon which the contract can operate.” O.C.G.A. § 13-31. “The cardinal rule of construction is to ascertain the intention of the parties.”
O.C.G.A. § 13-2-3. “If a contract fails to establish an essential term, and leaves the
settling of that term to be agreed upon later by the parties to the contract, the contract is
deemed an unenforceable ‘agreement to agree.’” Kreimer v. Kreimer, 274 Ga. 359,
363, 552 S.E.2d 826, 829 (2001) (citation omitted). To interpret a contract, “[p]arol
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evidence is inadmissible to add to, take form, or vary a written contract,” but parol
evidence may be used “if only a part of a contract is reduced to writing . . . and it is
manifest that the writing was not intended to speak the whole contract.” O.C.G.A. § 132-2(1).
C.
Panaprint’s Complaint
C2 Multi Media and Cordaco Homes argue that “the alleged contracts are merely
price quotations that are guaranteed and effective if and when Defendants place orders
during the periods of time stated in the quotations.” Doc. 2 at 5. Therefore, according
to C2 Multi Media and Cordaco Homes, they have not “breached the terms of their
respective quotation with Panaprint” by notifying Panaprint that they would not place
orders in the future. Id. at 7. Plaintiff responds that “[b]y executing the quotations,
Defendants were expressing their intention to purchase the quoted products in
accordance with the terms of quotations on a monthly basis for the duration of the
executed quotation.” Doc. 9 at 11. The complaint alleges that “C2 Multi Media or
Cordaco Homes contracted to do business with Panaprint by having an authorized
representative sign or initial the quotation and returning it to Panaprint.” Doc. 1-1 ¶ 11.
The complaint also alleges that Panaprint “has entered into multiple contracts” with C2
Multi Media and Cordaco Homes since 2009. Id. ¶¶ 9-10.
But neither the complaint nor the alleged contract specify the quantity or the
frequency to which C2 Multi Media and Cordaco Homes allegedly bound themselves.
Both alleged contracts are entitled “quotation.” Id. at 14, 17. Both specify that
“[p]ayment terms are to be agreed upon.” Id. at 15, 18. Both provide a range of options
for quantity of magazines, as well as number of pages and number of “page cover;”
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these options result in a price range for C2 Multi Media of $5,779 per order to $19,054
per order, and the price options for Cordaco Homes ranged from $3,841 per order to
$4,802 per order—plus up to $560 extra for gloss options. Id. at 14, 17. The complaint
does not allege any facts about Panaprint’s previous dealings with C2 Multi Media or
Cordaco Homes other than that Panaprint produced magazines for them “on a
continuous and ongoing basis.” Id. ¶¶ 9-10. Finally, the complaint does not discuss
how C2 Multi Media or Cordaco Homes agreed to quantity and frequency.
Plaintiff raises arguments that perhaps, with a properly pleaded complaint, could
be sufficient to state a claim, but the complaint as currently constituted does not contain
those allegations. For example, nothing in the complaint establishes how to calculate
quantities the Defendants obligated themselves to order. The complaint alleges that
“[u]pon receipt of a binding agreement, Panaprint produced the contracted for products
for the specified time period at the price set forth in the parties[’] contractual
agreement.” Doc. 1-1 ¶ 11. But the complaint is silent as to the quantity and the
number of pages per magazine specified by the parties, and the complaint is silent as to
how those fundamental terms could be determined when the alleged contract contains a
table with widely divergent options. See id. at 14, 17. The complaint and the contract
are also both silent as to the frequency of orders. See id. Panaprint’s briefing suggests
these terms might be determined by course of prior dealings between the parties or
industry custom, but those arguments are not in the complaint. See generally Doc. 9 at
8-11; see id. at 3 n.3 (“Plaintiff shows that discovery will reveal that the [alleged contract
with C2 Multi Media] is a renewal of a prior quotation executed by Defendant that had
expired by its own terms.”). Accordingly, if Panaprint believes that it can, in good faith,
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allege sufficient facts to state a claim for which relief can be granted, it shall amend its
complaint within 14 days to do so. Otherwise, the complaint will be dismissed without
prejudice.
III. CONCLUSION
The Court accordingly ORDERS Panaprint to amend its complaint within 14 days
of this Order if it believes it can, in good faith, allege sufficient facts to state a claim for
which relief may be granted for breach of contract.
SO ORDERED, this 9th day of November, 2017.
S/ Marc T. Treadwell
MARC T. TREADWELL, JUDGE
UNITED STATES DISTRICT COURT
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