90 F. Supp. 3d 1329
N.D. Ga.2015Background
- Plaintiff (dealer) and Defendant (Discrete Wireless) entered a Dealer Agreement (2006) under which Plaintiff purchased GPS "Units," resold them to customers, procured Service Orders, installed Units, and provided "First Level Support;" commissions were payable to Plaintiff only on three-year Service Orders and monthly payments were tied to Defendant's "Base Service."
- Defendant allegedly announced in December 2008 it would stop paying commissions on Mobitex network–based devices and thereafter ceased paying those commissions; Defendant terminated the Agreement in January 2014.
- Plaintiff filed suit (Feb. 18, 2014), amended its complaint to add a GUDTPA claim based on post-termination contacts by Defendant with Plaintiff’s Direct Bill Customers (example email dated March 3, 2014).
- Defendant moved to dismiss arguing (1) breach-of-contract claim is time-barred under the UCC four-year limitations period, (2) GUDTPA claim fails for lack of standing and insufficient facts, and (3) Plaintiff should have used Fed. R. Civ. P. 15(d) to supplement pleading for post-filing events.
- The Court held the Dealer Agreement is a goods-dominated hybrid contract governed by Georgia’s UCC (4-year limitations), but treated it as a divisible installment contract so monthly commissions within four years of filing survive. The GUDTPA claim stated a plausible claim and standing but was dismissed without prejudice for failure to comply with Rule 15(d) and Plaintiff was ordered to seek leave to supplement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Dealer Agreement is governed by Georgia's UCC (sale of goods vs. services) | Agreement primarily concerns sale/resale of Units; services are incidental; should be treated as services contract (6-year limitations) | UCC governs because sale of goods (Units) predominates despite incidental services (4-year limitations) | Agreement predominately a sale-of-goods contract; UCC applies (4-year statute) |
| When the statute of limitations accrued for breach-of-contract (anticipatory repudiation vs. installment accrual) | Even if repudiation occurred, contract is divisible/installment so each monthly commission gives rise to a separate cause of action; recent accruals within 4 years survive | Cause of action accrued at repudiation (Dec. 2008) and is time-barred under four-year UCC limitation | Accrual began at repudiation (Dec. 2008) but contract is a divisible installment contract; commissions due within four years before filing are not barred |
| Whether Plaintiff has standing and pleaded a plausible GUDTPA claim based on post-termination contacts | Plaintiff alleges ongoing/future harm from Defendant’s contacts with Direct Bill Customers that could cause confusion and pass off Plaintiff’s services | Plaintiff lacks standing (only injunctive relief under GUDTPA) and allegations are conclusory; incorporated email is not deceptive | Plaintiff adequately alleged likelihood of future harm and plausible deceptive practice; GUDTPA claim survives Rule 12(b)(6) review on the merits |
| Whether Plaintiff improperly added post-filing events without Rule 15(d) permission | Amendment as of right was used but post-filing events required supplementation under Rule 15(d); Plaintiff should be allowed to supplement | Plaintiff failed to follow Rule 15(d); claim should be dismissed with prejudice | Failure to follow Rule 15(d) requires dismissal without prejudice; Plaintiff ordered to give notice and move to supplement within 5 days; court will grant leave and Plaintiff must file a second amended complaint |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading must state a plausible claim)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (complaint must raise claim above speculative level)
- Am. Cyanamid Co. v. Miss. Chem. Corp., 817 F.2d 91 (11th Cir.) (anticipatory repudiation under UCC triggers accrual at repudiation)
- Advance Tufting, Inc. v. Daneshyar, 259 Ga. App. 415 (Ga. Ct. App.) (accrual analysis and reliance on general-contract principles)
- Baker v. Brannen/Goddard Co., 274 Ga. 745 (Ga.) (divisible/installment commission contracts: statute runs separately on each installment)
- Franconia Assocs. v. United States, 536 U.S. 129 (accrual under general contract law when repudiation is treated as present breach)