Electrolux Home Prod v. Whitesell Corp, No. 1:2003cv00050 - Document 605 (S.D. Ga. 2014)
Court Description: ORDER granting with respect to Plaintiff's claim in Count I of the SAC for recovery of the $2 million cash payment and 10% pricing discounts 599 Motion for Judgment on the Pleadings; denying 601 Motion to Amend/Correct. Signed by Judge J. Randal Hall on 9/18/14. (cmr)
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Electrolux Home Prod v. Whitesell Corp Doc. 605 IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF GEORGIA AUGUSTA DIVISION WHITESELL CORPORATION, * • Plaintiff, * v. * CV 103-050 * ELECTROLUX HOME PRODUCTS, INC., HUSQVARNA, A.B., and HUSQVARNA OUTDOOR PRODUCTS, INC., * * * * * Defendants. * ORDER Presently before the Court is Defendants' judgment on the pleadings. Additionally, thereto, Corporation Plaintiff Whitesell and motion for in response ("Whitesell") has filed a motion to amend the Second Amended Complaint ("SAC"). The Court resolves the motions as I. On June 5, 2014, follows. BACKGROUND Whitesell Defendants Electrolux Home Products, Products, Inc., and Husqvarna, A.B. filed the SAC against Inc., Husqvarna Outdoor As the parties well know, this filing was permitted seven and a half years after the filing of the operative First Amended Complaint, and only after a hearing was conducted and a written Order entered Dockets.Justia.com resolving two rounds of objections by Defendants. Defendants filed Answers and Counterclaims to the SAC on June 23, 2014. On July 30, 2014, Defendants filed a joint motion for judgment on the pleadings, Count I of the seeking to strike a claim of damages in SAC. Count I is a breach of contract claim, which alleges that Defendants Whitesell have that failed to purchase they were required parties' supply agreements. damages for this breach all to of the purchase parts from under the In Paragraph 136, Whitesell seeks in an amount to be determined at trial, "including but not limited to lost profits, operational losses, interest, Whitesell the $2 million up-front cash payment which agreed to pay EHP in order to win the business embodied in the Strategic Partnership Agreement, unearned 10% discounts, costs, and attorney's fees." H 136 (emphasis added).) Through (Doc. No. 578, SAC, its present motion, Defendants seek judgment upon Whitesell's attempt to recover the $2 million cash payment and the 10% pricing discounts. Defendants argue that these damages alleged breach on their part; rather, the Court's Order of October 14, do not flow from any these damages flow from 2008, which established the four enforceable categories of parts subject to the parties' supply agreements. at 3-6 (See Defs.' Mot. for J. on the Pleadings, (citing O.C.G.A. § 13-6-21).) In response to the motion for judgment on the pleadings, Whitesell concedes that Defendants' breach. these damages did not result from Nevertheless, Whitesell contends that it has "sustained a significant economic loss from which its lost profits claim arising compensate [it]." from Defendants' (PL's Resp. breaches to Defs.' Mot. will not for J. on the Pleadings, at 2. ) Accordingly, rather than seek these damages under a breach of contract claim, Whitesell has now filed a motion to amend the SAC to add an unjust enrichment claim. Thus, the present dispute is better resolved through the Court's analysis of Whitesell's motion to amend the SAC. 1 O.C.G.A. § 13-6-2 provides that damages recoverable for a breach of contract are those "as arise naturally and according to the usual course of things from such breach and such as the parties contemplated, when the contract was made, as the probable result of its breach." In this case, the damages sought in the form of the $2 million cash payment and discounts represent what Whitesell perceives to be a loss of economic value in the contract resulting from the Court's Order of October 14, 2008. However, because this Court did not enter the Order limiting the scope of goods upon which Whitesell could possibly recover until 8 years after the parties entered into the original Strategic Partnership Agreement, these damages did not arise from Defendants' alleged breach nor were they contemplated by the parties at the time of contract. II. LEGAL ANALYSIS Leave to amend should be liberally granted when necessary in the interests of justice. Fed. R. Civ. P. 15(a)(2). "The grant or denial of an opportunity to amend is within the discretion of the district court." 178, 182 (1962) . In Foman, Foman v. Davis, the Supreme Court 371 U.S. identified several reasons that may justify denying leave: "undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, U.S. at [and] futility of amendment." 371 182. Whitesell seeks amend the SAC Under Georgia law, enrichment claim. enrichment, to to add an unjust to establish unjust a plaintiff must show "(1) a benefit has been conferred, (2) compensation has not been given for receipt of the benefit, unjust." (N.D. Ga. and (3) the failure to so compensate would be Clark v. Aaron's, Inc., 914 F. Supp. 2d 1301, 1309 2012). "xThe theory basically an equitable doctrine equitably ought to either of unjust that return enrichment is the benefitted party or compensate for the conferred benefits when there was no legal contract to pay.'" Marvin S.E.2d Hewatt Enters., Inc. , 2014 WL 3409076, v. Butler at *5 Capital (Ga. App. Jul. Corp., 15, 2014) (quoted source omitted). "The doctrine applies when, as a matter of no fact, there sources omitted). is legal contract." Id. (cited "*Where there is an express contract, there can be no recovery based upon an unjust enrichment theory.'" Id. (quoted source omitted). Pursuant to the Strategic Partnership Agreement ("SPA") entered into by the parties in 2000, Whitesell provided a benefit to Defendants with the $2 million cash payment and 10% pricing discounts on various parts. And, according to Whitesell's unjust enrichment claim, when this Court narrowed the universe of parts subject to the parties' SPA, Whitesell did not receive the consideration it had bargained for in exchange for the cash payment and discounts. Consequently, Whitesell claims that it would be unjust for Defendants to retain the cash payment and discounts. Whitesell further contends that its claim is not precluded by the existence of the SPA because that contract. the Order of October 14, Thus, between the parties as there is no 2008, invalidated enforceable agreement to the broader range of parts that Defendants agreed to purchase from Whitesell. Whitesell's position that invalidated the supply agreement between the parties is simply incorrect. As the Court has previously noted, this Court "the October 14, 2008 Order did not obliterate the SPA; rather, the October 14, 2008 Order found the SPA enforceable between the parties to the extent of their mutual performance and course of conduct, as modified by subsequent settlement agreements." at 6.) (Order of Nov. 12, 2013, Here, Whitesell seeks to recover benefits conferred on Defendants pursuant to the SPA on the ground that the SPA has been invalidated while at the very same time seeking to recover damages from Defendants' breach of that same contract, albeit limited in scope by the Court's prior rulings.2 Whitesell's claims are a simple attempt to have it both ways, a position that rarely, if ever, succeeds. Moreover, Whitesell essentially argues that the law precluding unjust enrichment claims when a valid contract exists be modified to allow unjust enrichment claims where the operative contract is partially invalidated. Yet, Whitesell cites no case law that would support this position, and the Court finds Whitesell's argument abhorrent Accordingly, to the Whitesell's concept of addition of unjust an unjust enrichment.3 enrichment claim in this case would be futile. 2 Indeed, the benefits conferred on Defendants accrued only as a result of the SPA. 3 To this point, Defendants' statement-"[t]he unjust enrichment doctrine cannot be used to recover damages above and beyond what is allowed by a contract just because one party is dissatisfied with the enforceable limits of that contract . . ."-to be well-taken. (See Defs.' Reply Br. at 10.) Further, the Court notes that Whitesell's claim of unjust enrichment would fly in the face of its prior ruling that the SPA does not contain an identifiable scope of goods. to say, That is in order to prove its claim, Whitesell would have to identify the scope and value of goods it originally intended to supply to Defendants in order to show that the Court limited the contractual obligations to such an extent as to deprive Whitesell of the contract's economic value to the tune of a $2 million cash payment and the pricing discounts.4 The inability to establish an identifiable scope of goods in the original agreement is the very problem that led to the Order of October 14, 2008. its claim of Thus, Whitesell would be unable to prove unjust enrichment, and the claim is therefore futile. Finally, the proposed amendment would unduly prejudice Defendants in this case because it would cause the parties to expand their discovery categories of parts 2008, as 4 modified efforts past the four enforceable specified in the Order of October 14, by the subsequent supplier stipulation Indeed, Paragraph 2 of Whitesell's proposed unjust enrichment claim reads: "In exchange for Defendants using Whitesell as their sole source provider for a range of parts as defined in Section 2.1.2 of the [SPA], Whitesell provided Defendants a $2 million up-front cash payment and 10% pricing discounts on various goods." added).) (Doc. No. 601, H 2 (emphasis Section 2.1.2 was the provision invalidated by the Order of October 14, 2008. contained in the Joint Discovery Plan. In order to prove its claim of unjust enrichment, Whitesell would necessarily have to discover and present evidence respecting the scope and value of parts as contemplated by the original SPA. The Court will not countenance the addition of any new claim or theory that would delay or expand the discovery track upon which the parties are now traveling. III. CONCLUSION Upon the foregoing, Whitesell's motion to amend the SAC to add an unjust enrichment claim (doc. DENIED. no. 601) is hereby Concomitantly, Defendants' motion for judgment on the pleadings with respect to Plaintiff's claim in Count I of the SAC for recovery of the $2 million pricing discounts (doc. no. 599) cash and 10% is GRANTED. ORDER ENTERED at Augusta, Georgia, September, payment this / Q^""day of 2014. HONORABLE J. g&NDAL HALL UNITE;/ STATES DISTRICT JUDGE [ERN DISTRICT OF GEORGIA
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