Order Taker, Inc. v. Dedert Corporation

Filing 76

ORDER granting Defendant's 67 Motion for Summary Judgment. Defendant's 35 Motion to Dismiss or for Partial Judgment on the Pleadings is DENIED as moot. Plaintiff's 43 Motion to Compel Discovery is DENIED as moot. Finally, Defendant's 47 Motion to Quash Subpoena to Arch Chemicals, Inc. is DENIED as moot. The Clerk is directed to enter judgment in favor of Defendant and to close the case. Signed by Judge Richard W. Story on 2/19/13. (cem)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
ORDER TAKER, INC.,
Plaintiff,
v.
DEDERT CORPORATION,
Defendant.

:
:
:
:
:
:
:
:
:
:

CIVIL ACTION NO.
1:11-CV-3867-RWS

ORDER
This case comes before the Court on Defendant’s Motion to Dismiss or
for Partial Judgment on the Pleadings [35], Plaintiff’s Motion to Compel
Discovery [43], Defendant’s Motion to Quash Subpoena to Arch Chemicals,
Inc. [47], and Defendant’s Motion for Summary Judgment [67]. After
reviewing the record, the Court enters the following Order.
Background
This case arises out of an alleged oral agreement between Plaintiff and
Defendant governing commissions Plaintiff was to earn on sales of spin flash
dryers (“SFDs”). Plaintiff initiated this litigation by filing a Complaint in this
Court, raising claims for breach of contract (Count I), quantum meruit (Count

AO 72A
(Rev.8/82)

II), prejudgment interest (Count III), and attorneys fees and litigation expenses
(Count IV). (See generally Compl., Dkt. [1].) In the Complaint, Plaintiff
alleges that Defendant breached its agreement with Plaintiff by failing to pay
Plaintiff commissions on two sales of SFDs to Arch Chemicals, Inc.
(“Arch”)—the first of which occurred on November 11, 2010 and the second of
which took place on February 14, 2011. (Id. ¶¶ 20-21, 23-25.) Defendant now
moves for summary judgment on each of Plaintiff’s claims. (See generally
Def.’s Mot. for Summ. J., Dkt. [67].) The following facts are undisputed.1

1

These facts are taken from Defendant’s Statement of Material Facts As To
Which There Is No Genuine Issue To Be Tried & Theories of Recovery (“Def.’s
Statement of Material Facts” or “Def.’s SMF”), Dkt. [67-2]. Plaintiff has failed to
create a genuine issue as to any of these facts. Under the local rules of this Court, a
respondent to a summary judgment motion must include, with his responsive brief, a
response to the movant’s statement of undisputed facts. LR 56.1(B)(2)(a), NDGa.
“This response shall contain individually numbered, concise, nonargumentative
responses corresponding to each of the movant’s numbered undisputed facts.” LR
56.1(B)(2)(a)(1), NDGa. “This Court will deem each of the movant’s facts as
admitted unless the respondent: (i) directly refutes the movant’s fact with concise
responses supported by citations to evidence (including page or paragraph number);
(ii) states a valid objection to the admissibility of the movant’s fact; or (iii) points out
that the movant’s citation does not support the movant’s fact or that the movant’s fact
is not material or otherwise has failed to comply with the provisions set out in LR
56.1(B)(1).” LR 56.1(B)(2)(a)(2), NDGa (emphasis added).
Plaintiff’s response to Defendant’s Statement of Material Facts (Dkt. [71] at 923) wholly fails to comply with these Rules, as none of the responses contains a
citation to evidence in the record. Instead, following Plaintiff’s purported responses to
Defendant’s facts, Plaintiff provides a summary of various depositions and affidavits
2

AO 72A
(Rev.8/82)

Plaintiff Order Taker, Inc. (“Plaintiff” or “Order Taker”) is a company
founded by Roger Lee (“Lee”) in Georgia in 2005. (Def.’s SMF, Dkt. [67-2] ¶
1.) Lee is the sole officer and shareholder of Order Taker. (Id.) Guy Lonergan
(“Lonergan”) became the president of Dedert Corporation (“Defendant” or
“Dedert”) on July 1, 2005 and has remained in that position since that time. (Id.
¶ 4.) Dedert changed its name to Anhydro, Inc. (“Anhydro”) in 2007 and
changed its name back to Dedert in 2010. (Id. ¶¶ 2, 4.)

in the record. This is not proper under the Local Rules and, as Defendant argues,
“makes it difficult, if not impossible, to determine the basis for each response.”
(Def.’s Reply Br. in Supp. of Mot. for Summ. J. (“Def.’s Reply”), Dkt. [74] at 3.)
Accordingly, Plaintiff has failed to create a genuine dispute as to any fact asserted by
Defendant.
Plaintiff’s own Statement of Material Facts (Dkt. [71] at 2-23 of 27) similarly
fails to comply with the Local Rules and fails to create a genuine dispute as to any
material fact. Under Rule 56.1(B)(1) and (B)(2)(b), a respondent’s statement of
additional facts “must be numbered separately and supported by a citation to evidence
proving such fact.” LR 56.1(B)(1). “The court will not consider any fact: (a) not
supported by a citation to evidence (including page and paragraph number) . . . [or] (c)
stated as an issue or legal conclusion . . . .” LR 56.1(B)(1). In this case, each of
Plaintiff’s statements of fact is phrased as a legal issue, in “whether or not” format,
with no citation to evidence. Again, Plaintiff provides a summary of various
depositions and affidavits in the record at the conclusion of its statement of facts. This
is insufficient under the Local Rules. (The Court notes that even if it were to consider
Plaintiff’s response to Defendant’s Statement of Material Facts or Plaintiff’s own
Statement of Material Facts, it would not change the result in this case, as neither of
these submissions creates a dispute of fact that is material to the issues before the
Court.)
3

AO 72A
(Rev.8/82)

In July 2005, Lee entered into an oral sales agent representative
agreement with Stewart Gibson (“Gibson”), an engineer at Dedert (formerly
Anhyrdro), for a sales agent position with Anhydro related to sales to Arch (the
“Lee-Gibson Agreement”). (Id. ¶¶ 3, 23.) Gibson reported to Lonergan and
never had any authority to set prices or commissions without Lonergan’s
approval, or to enter into sales agent representative agreements. (Id. ¶¶ 13-15.)
On the contrary, Gibson was required to discuss any commissions for proposed
outside sales agents with Lonergan. (Id. ¶ 16.) Lonergan was the only person
at Dedert with authority to enter into a sales representation agreement and was
the only person with final authority to approve sales proposals. (Id. ¶¶ 16-17.)
Lee was aware in July 2005 that Gibson lacked authority to enter into a
commission agreement without Lonergan’s approval, and he knew that
Lonergan would have to confirm the Lee-Gibson Agreement. (Id. ¶ 27.) No
written contract ever was concluded between Order Taker (or Lee) and Dedert
(or Anhydro). (Id. ¶ 21.)
The oral Lee-Gibson Agreement had no terms other than a commission
rate of three percent. (Id. ¶¶ 29, 32.) It had “no set start date, expiration date,
termination provision, confidentiality provision, or non-compete provision.”
4

AO 72A
(Rev.8/82)

(Id. ¶ 29.) Nor did it contemplate any specific duties or responsibilities that Lee
was to have, other than to sell. (Id. ¶ 32.) “The entire Lee-Gibson Agreement
boiled down to ‘3 percent, go sell.’” (Id.) Gibson agreed, however, to increase
the commission rate to five percent under certain circumstances. (Id. ¶ 34.)
“The Arch lead came directly to an employee at Dedert, John Betts
(‘Betts’).” (Id. ¶ 37.) Betts received a call from a representative of Arch;
participated in a conference call with five Arch representatives, during which he
discussed the different dryer types, including SFDs; and then passed the lead on
to Gibson. (Id.) Gibson asked Lee to follow up on the lead, and he provided
Lee with a form specifically for SFDs, which was used to obtain technical data
from Arch. (Id. ¶ 38.) On July 25, 2005, another engineer at Dedert, David
Augustine (“Augustine”), prepared a proposal for Arch related to SFDs, which
Lee forwarded to Arch. (Id. ¶ 39.) Augustine also prepared a technical
summary regarding the differences between SFDs and another type of dryer.
(Id.) Lee did not prepare the costing speadsheets for the possible sales to Arch,
nor did he “handle the quotes, budgets, design, or technical or commercial
components of the Arch lead.” (Id. ¶ 41.) “Although he communicated with
Arch, he did not handle all of the communications with Arch.” (Id.) Lee did
5

AO 72A
(Rev.8/82)

not set up or coordinate the pilot testing of the SFDs at Arch, which testing was
essential to securing a sale to Arch. (Id. ¶ 42.)
“Lonergan did not know anything about Lee until the end of 2008.” (Id.
¶ 55.) Lonergan first heard about the Lee-Gibson Agreement at the end of
2008, when another Dedert representative, Al Lorig (“Lorig”), came to
Lonergan’s office after finding out that a commission was being included for
Lee and asked Lonergan who Lee was and what his involvement was. (Id. ¶
56.) Lonergan never accepted Lee’s services or ratified the Lee-Gibson
Agreement. (Id. ¶ 57.) During a meeting in February 2009, Lonergan told Lee
he would not ratify the Lee-Gibson Agreement but told Lee that Dedert would
be willing to enter into a standard sales agent agreement to resolve any dispute
with Lee. (Id. ¶ 58.) Lee repeatedly rejected the standard sales agent
agreement. (Id. ¶ 59.)
Lonergan terminated any role Lee believed he had under the Lee-Gibson
agreement, effective May 20, 2009, by termination letter to Lee dated April 20,
2009. (Id. ¶ 60.) “Lonergan proposed that Dedert would pay Lee commission
under the Dedert standard sliding scale sales agreement for a period of ninety
(90) days after the effective date of his termination for any open sales in an
6

AO 72A
(Rev.8/82)

effort to resolve the dispute with Lee.” (Id. ¶ 61.) “Lonergan thereafter offered
to extend that date through the end of 2009 but Lee again refused to enter into
any agreement with Dedert.” (Id.)
“No sales were made to Arch in 2009.” (Id.) Apart from fewer than ten
conversations with Arch representatives, Lee was not involved in the selling
process following his termination, and Lonergan advised Arch that it should no
longer communicate with Lee. (Id. ¶¶ 62, 64, 65.) Following his termination,
Lee did not represent himself to Arch as Dedert’s sales representative, nor take
any other specific action to make the sales to Arch happen. (Id. ¶ 64.) The first
sale of SFDs to Arch alleged in the Complaint took place on November 11,
2010—sixteen months after Lee’s termination. (Id. ¶ 64.) The second sale took
place on February 14, 2011. (Id.) Plaintiff alleges in this action that he is
entitled to commissions on these sales.
Discussion
I.

Defendant’s Motion for Summary Judgment [67]
A.

Summary Judgment Legal Standard

Federal Rule of Civil Procedure 56 requires that summary judgment be
granted “if the movant shows that there is no genuine dispute as to any material
7

AO 72A
(Rev.8/82)

fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). “The moving party bears ‘the initial responsibility of informing the . . .
court of the basis for its motion, and identifying those portions of the pleadings,
depositions, answers to interrogatories, and admissions on file, together with the
affidavits, if any, which it believes demonstrate the absence of a genuine issue
of material fact.’” Hickson Corp. v. N. Crossarm Co., 357 F.3d 1256, 1259
(11th Cir. 2004) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)
(internal quotations omitted)). Where the moving party makes such a showing,
the burden shifts to the non-movant, who must go beyond the pleadings and
present affirmative evidence to show that a genuine issue of material fact does
exist. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257 (1986).
The applicable substantive law identifies which facts are material. Id. at
248. A fact is not material if a dispute over that fact will not affect the outcome
of the suit under the governing law. Id. An issue is genuine when the evidence
is such that a reasonable jury could return a verdict for the non-moving party.
Id. at 249-50.
Finally, in resolving a motion for summary judgment, the court must
view all evidence and draw all reasonable inferences in the light most favorable
8

AO 72A
(Rev.8/82)

to the non-moving party. Patton v. Triad Guar. Ins. Corp., 277 F.3d 1294, 1296
(11th Cir. 2002). But, the court is bound only to draw those inferences which
are reasonable. “Where the record taken as a whole could not lead a rational
trier of fact to find for the non-moving party, there is no genuine issue for trial.”
Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir. 1997) (quoting
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)).
“If the evidence is merely colorable, or is not significantly probative, summary
judgment may be granted.” Anderson, 477 U.S. at 249-50 (internal citations
omitted); see also Matsushita, 475 U.S. at 586 (once the moving party has met
its burden under Rule 56(a), the nonmoving party “must do more than simply
show there is some metaphysical doubt as to the material facts”).
B.

Analysis

As stated in the Background section, supra, Plaintiff raises claims in the
Complaint for breach of contract (Count I) and quantum meruit (Count II) and
for prejudgment interest (Count III) and expenses of litigation (Count IV).
(Compl., Dkt. [1].) Utilizing the legal standard set out in sub-part A, supra, the
Court considers Defendant’s Motion for Summary Judgment as to each claim.

9

AO 72A
(Rev.8/82)

1.

Breach of Contract (Count I)

Defendant moves for summary judgment on Plaintiff’s claim for breach
of contract on two grounds. First, Defendant contends that the alleged oral
contract falls within the statute of frauds as a contract not to be performed
within one year,2 and therefore is unenforceable because it is not in a writing
signed by Defendant, the party to be charged. (Def.’s Br. in Supp. of Mot. for
Summ. J. (“Def.’s Br.”), Dkt. [67-1] at 9 (citing O.C.G.A. § 13-5-30(5)).)
Second, Defendant contends that even if a valid contract was entered into, it
was a contract for an indefinite period and therefore terminable at will. (Id. at
9-11.) In response to these arguments, Plaintiff argues that the doctrine of part
performance takes the agreement out of the statute of frauds; Plaintiff does not
address Defendant’s argument that the contract was terminable at will, thus
precluding Plaintiff from asserting a claim for breach following his termination.
(Pl.’s Br. in Resp. to Def.’s Mot. for Summ. J (“Pl.’s Resp.”), Dkt. [71] at 25.)

2

In support of its argument that the alleged oral agreement was a contract not
to be performed within one year, Defendant points out that the alleged breaches of
which Plaintiff complains did not take place until November 11, 2010 and February
14, 2011, more than one year after the agreement allegedly was entered into (in July
2005). (Def.’s Br., Dkt. [67-1] at 9.)
10

AO 72A
(Rev.8/82)

The Court agrees with Defendant that the oral contract alleged by
Plaintiff was a contract for employment for an indefinite term, therefore
terminable at the will of either party. “[U]nder Georgia law, an oral promise as
to an employment contract for an indefinite period of time is not enforceable.”
Pickle Logging, Inc. v. Georgia Pacific Corp., 623 S.E.2d 227, 229 (Ga. Ct.
App. 2005) (internal quotes and citation omitted). “Such contract is terminable
at will, and violation of its terms will not support a breach of contract claim.”
Id. “Moreover, assumptions about the duration of a terminable-at-will contract
are not enforceable.” Id. See also Jones v. Destiny Indus., Inc., 485 S.E.2d
225, 227 (Ga. Ct. App. 1997) (“An indefinite hiring may be terminated at the
will of the parties (O.C.G.A. § 34-7-1); thus, a promise of employment for an
indefinite term is insufficient to support a cause of action for breach of an
employment contract.”).
In this case, the undisputed evidence shows that the alleged contract did
not have a definite duration and thus was terminable at will. Plaintiff, therefore,
cannot prevail on a claim for breach of contract based on Defendant’s failure to
pay him commissions following his termination. Defendant’s Motion for
Summary Judgment [67] is GRANTED as to Count I.
11

AO 72A
(Rev.8/82)

2.

Quantum Meruit (Count II)

Defendant moves for summary judgment on Plaintiff’s claim for quantum
meruit on grounds that Plaintiff has failed to establish certain essential elements
of the claim—namely, that (1) Defendant requested or knowingly accepted
Plaintiff’s services; (2) that Plaintiff expected to be paid when he rendered
those services; and, finally, (3) that Plaintiff was the “procuring cause” of the
sales to Arch. (Def.’s Br., Dkt. [67-1] at 13-17.) Plaintiff does not respond to
these arguments but instead recites general principles on the theory of quantum
meruit. (See Pl.’s Resp., Dkt. [71] at 25 (“Assuming the verbal contract is not
taken out of the Statute of Frauds, one may recover under Quantum Meruit
permit [sic] a party who may be unable to recover under contract to nonetheless
receive compensation for services rendered. . . . One rendering valuable
services to another is entitled to recover in quantum meruit, and the implication
is that the employer will paid [sic] for the services rendered.” (citations
omitted)).)
The Court agrees with Defendant that Plaintiff’s claim for quantum
meruit fails as a matter of law. The essential elements of liability under a
quantum meruit theory are: “(1) the provider performed as agent services
12

AO 72A
(Rev.8/82)

valuable to the recipient; (2) either at the request of the recipient or knowingly
accepted by the recipient; (3) the recipient’s receipt of which without
compensating the provider would be unjust; and (4) provider’s expectation of
compensation at the time of rendition of services.” Hollifield v. Monte Vista
Biblical Gardens, Inc., 553 S.E.2d 662, 668 (Ga. Ct. App. 2001). Moreover, a
sales agent may not recover commissions under a quantum meruit theory
following the termination of her sales agent agreement unless the agent shows
she was the “procuring cause of the sale.” Pittard Mfg. Co. v. Mitsubishi Int’l
Corp., 384 S.E.2d 423, 424 (Ga. Ct. App. 1989); Doyal & Assocs., Inc. v.
Wilma SE, Inc., 332 S.E.2d 24, 26 (Ga. Ct. App. 1985); Foshee v. Harris, 317
S.E.2d 548, 550 (Ga. Ct. App. 1984). To be found the procuring cause of the
sale, “it must be established that the negotiations were still pending between the
prospective purchaser and the one seeking the commission and that the owner
was aware that there were pending negotiations when it consummated the sale.”
Pittard, 384 S.E.2d at 424. “Finding the prospect and attempting to make the
sale are not sufficient, in law, to entitle an agent to a commission; to earn the
commission, he must be the procuring cause of the sale.” Id.

13

AO 72A
(Rev.8/82)

The Court agrees with Defendant that Plaintiff was not the procuring
cause of the two sales of SFDs to Arch. Plaintiff was terminated from any role
he may have had under the Lee-Gibson Agreement effective May 20, 2009, and
Lonergan instructed Arch not to communicate with Lee following his
termination. The first sale to Arch did not occur until November 11, 2010, and
the second sale took place on February 14, 2011. There is no evidence that
negotiations between Lee and Arch were taking place at the time these sales
occurred, much less negotiations of which Defendant was aware, or that Lee
took any action following his termination to make the sales happen. Moreover,
the evidence shows that Lee did not discover the Arch lead in the first instance,
which lead instead came directly to a Dedert employee. Plaintiff has failed to
put forward evidence to rebut Defendant’s showing that Plaintiff was not the
procuring cause of the Arch sales. Accordingly, Plaintiff is not entitled to
recover commissions on these sales under a quantum meruit theory.
Defendant’s Motion for Summary Judgment is GRANTED on Count II.
3.

Prejudgment Interest (Count III) and Expenses of Litigation
(Count IV)

14

AO 72A
(Rev.8/82)

Plaintiff’s claims for prejudgment interest and expenses of litigation,
pursuant to O.C.G.A. § 13-6-11, are derivative of Plaintiff’s substantive claims
for breach of contract and quantum meruit. Because Plaintiff’s claims for
breach of contract and quantum meruit fail as a matter of law, Plaintiff is not
entitled to prejudgment interest or attorney’s fees or expenses of litigation.
Wilkinson Homes, Inc. v. Stewart Title Guar. Co., 610 S.E.2d 187, 193 (Ga. Ct.
App. 2005); United Cos. Lending Corp. v. Peacock, 475 S.E.2d 601, 602 (Ga.
Ct. App. 1996). Defendant’s Motion for Summary Judgment is GRANTED on
Counts III and IV.
II.

Defendant’s Motion to Dismiss or for Partial Judgment on the
Pleadings [35], Plaintiff’s Motion to Compel Discovery [43], and
Defendant’s Motion to Quash Subpoena to Arch Chemicals, Inc. [47]
In light of the Court’s ruling in Part I, supra, granting Defendant’s

Motion for Summary Judgment, Defendant’s Motion to Dismiss or for Partial
Judgment on the Pleadings [35], Plaintiff’s Motion to Compel Discovery [43],
and Defendant’s Motion to Quash Subpoena to Arch Chemicals, Inc. [47] are
DENIED as moot.

15

AO 72A
(Rev.8/82)

Conclusion
In accordance with the foregoing, Defendant’s Motion for Summary
Judgment [67] is GRANTED. Defendant’s Motion to Dismiss or for Partial
Judgment on the Pleadings [35] is DENIED as moot. Plaintiff’s Motion to
Compel Discovery [43] is DENIED as moot. Finally, Defendant’s Motion to
Quash Subpoena to Arch Chemicals, Inc. [47] is DENIED as moot. The Clerk
is directed to enter judgment in favor of Defendant and to close the case.

SO ORDERED, this 19th day of February, 2013.

________________________________
RICHARD W. STORY
United States District Judge

16

AO 72A
(Rev.8/82)