Apex Digital, Incorporated v. Sears, Roebuck & Company
735 F.3d 962
| 7th Cir. | 2013Background
- Apex (vendor) and Sears (retailer) executed a Universal Terms and Conditions (UTC) agreement; UTC governed vendor relations but did not specify invoice due dates and barred modifications except in writing by Sears.
- Apex issued electronic invoices showing a "Net 60" payment term; both parties’ conduct (invoices, accounting, and payments) reflected payment due 60 days after invoice/receipt of goods.
- Sears sometimes withheld amounts as deductions/charge-backs and created an internal return reserve (PA 99671) to hold funds; PA 99671 was an internal accounting mechanism, not part of the UTC.
- Apex alleged Sears owed unpaid invoices and wrongful charge-backs totaling millions; last invoice was November 9, 2004 (due by January 8, 2005 under Net 60).
- Apex sued on March 6, 2009. The district court granted summary judgment to Sears, holding Apex’s claims were barred by the UCC four‑year statute of limitations (810 ILCS 5/2‑725) because accrual occurred no later than Jan 8, 2005 (invoices) and Dec 21, 2004 (last deduction).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When did breach for unpaid invoices accrue for statute of limitations purposes? | Net‑60 did not bind because UTC forbids modification by course of dealing; payment obligations were advances held open until a final 2006 accounting. | Parties’ course of dealing and invoices established Net‑60; accrual when payment became due (60 days after invoice). | Accrual on or before Jan 8, 2005 (60 days after Nov 9, 2004 invoice); claim filed 2009 is time‑barred. |
| When did claims for charge‑back deductions accrue? | Deductions were not finally actionable until final accounting; thus accrual occurred later. | Each deduction was taken against individual invoices and was actionable when taken; each partial breach accrued separately. | Each deduction accrued when taken (last on Dec 21, 2004); claims are time‑barred. |
| Can the UTC’s anti‑supplement clause prevent courts from considering course of dealing to add a term (Net‑60)? | UTC’s clause precludes supplementing by course of dealing so Net‑60 cannot be read into the UTC. | UTC is silent as to payment time; where agreement is silent, course of dealing may fill terms—courts may consider the parties’ course of performance. | UTC’s silence about timing permits supplementation by course of dealing; Net‑60 is part of the parties’ agreement as manifested by conduct. |
| Effect of Apex’s failure to controvert Sears’ Local Rule 56.1 facts? | Apex argued substantive defenses despite procedural failures. | Sears moved for summary judgment and submitted undisputed facts under Local Rule 56.1. | Because Apex failed to properly dispute Sears’ 56.1 statement, the court treated Sears’ material facts as admitted for summary judgment. |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standard)
- Arizanovska v. Wal‑Mart Stores, Inc., 682 F.3d 698 (7th Cir. 2012) (summary judgment review and construing facts for non‑movant)
- Johnson v. Gudmundsson, 35 F.3d 1104 (7th Cir.) (treating movant’s Local Rule 56.1 facts as admitted when opponent fails to controvert)
- Hi‑Lite Prods. Co. v. Am. Home Prods. Corp., 11 F.3d 1402 (7th Cir.) (each partial breach accrues separately)
- Gore v. Alltel Commc’ns, LLC, 666 F.3d 1027 (7th Cir. 2012) (contract interpretation focuses on objective manifestations of parties)
- Kozasa v. Guardian Elec. Mfg. Co., 425 N.E.2d 1137 (Ill. App. Ct.) (statute of limitations accrues when facts authorize suit)