SUNSHINE TRADERS OF EL PASO, INC., Plaintiff-Appellant—Cross-Appellee, v. DOLGENCORP, INC., doing business as Dollar General Corporation, doing business as Dollar General Store, Defendant-Appellee—Cross-Appellant.
No. 05-51669
United States Court of Appeals, Fifth Circuit.
Feb. 22, 2007.
219 Fed. Appx. 375
Summary Calendar.
Stacy R. Obenhaus, Joanne P. Early, Gardere Wynne Sewell, Dallas, TX, for Defendant-Appellee—Crоss-Appellant.
Before SMITH, WIENER, and OWEN, Circuit Judges.
PER CURIAM:*
The plaintiff in this case, Sunshine Traders of El Paso (Sunshine), appeals the district court‘s summary judgment for defendant Dolgencorp on a number of claims. Wе affirm in part and reverse and remand in part.
Dolgencorp contracted with Sunshine to manufacture various styles of jeans to be sold in its Dollar General stores. Following a number of disagreements over the style and color of the jeans, Dolgencorp refused to pay Sunshine for some of the jeans, and Sunshine sued Dolgencorp. The district court granted summary judgment for Dolgencorp on Sunshine‘s breach of contract claim for invoices 334 and 335 due to a limitations bar, breach оf contract claim for boys’ jeans due to a statute of frauds defense against an oral contract, and breach of contract claim for men‘s blaсk jeans due to a limitations bar. Sunshine now appeals.
We review a grant of summary judgment de novo, considering all evidence in the light most favorable to the non-moving party.1 Summary judgment is appropriate when the movant can demonstrate that there is no genuine issue of material fact.2
Sunshine first asserts that the district court incorrectly calculated the statute оf limitations regarding its claim for invoices 334 and 335. Sunshine argues that it is making an “open account” claim under Texas law and that the statute of limitations should therefore run from the point at which the two parties ceased doing business in June 2000 instead of from the time of the breach in July 1998.3
The district court held that the open account statute of limitations was not available in federal court. It held that open accounts are governed by
Though Rule 185 is a procedural rule and does not apply under Erie, open accounts are a common law cause of action in Texas.
Under Texas common law, the plaintiff must establish the following elements for a cause of action on an account: “(1) a sale and delivery of the goods; (2) ... the amount of the account is just ...; and (3) that ... amount is unpaid.”7 An account is open “when there have been running or current dealings between the pаrties, and the account is kept open with the expectation of further dealings.”8 This allows for parties with frequent dealings to credit and debit the account withоut settling it.
Sunshine argues that the account was an open account because Dolgencorp submitted purchase orders that Sunshine subsequently split into sepаrate invoices based on where Dolgencorp required Sunshine to ship the products. Payment for the invoices was due thirty days after they were issued. Dolgencorp did not pay invoices separately; rather it submitted payments to Sunshine based on the initial purchase orders, so a number of invoices would be satisfied through а single purchase order payment. These purchase orders were paid after delivery. Even after delivery and payment in full, Dolgencorp had the oрportunity to “charge back” a portion of the invoiced price if it later determined that the jeans did not meet its specifications. The charge back was not an automatic debit; instead, Dolgencorp would subtract the amount from a payment on a subsequent purchase order. Sunshine then had the oppоrtunity to present evidence to Dolgencorp that the jeans were within Dolgencorp‘s specifications. If Dolgencorp accepted this refutаtion, it would credit the amount to Sunshine on a future purchase order payment.
Invoices 334 and 335 were initially paid in full, but the disputed portions were charged back duе to “incorrect carton info[rmation].” Dolgencorp subtracted the disputed amount from its next payment to Sunshine on later purchase orders. Dolgencorp did not accept Sunshine‘s refutation, and the charged back amount remains unpaid.
The account between Sunshine and Dolgencorp was an open account because it allowed for crediting and debiting through multiple transactions, extending over a period of time.9 The account facilitated the on-going business relationship
Sunshine also argues that an oral contract regarding boys’ jeans should be enforceable desрite the statute of frauds under the “merchant exception” or “specially manufactured goods” exception. The merchant exception allows а writing in confirmation to be used against merchants if it is for the sale of goods, is signed, and specifies a quantity.11 Because Sunshine fails to show a writing in confirmation and instead рresents evidence of on-going negotiations, the merchant exception does not apply.
The specially manufactured goods exceptiоn allows for enforcement of an oral contract “if the goods are to be specially manufactured for the buyer and are not suitable for sale tо others in the ordinary course of the seller‘s business....” 12 Sunshine was able to sell 72,316 pairs of the jeans in question with minor alterations to remove Dolgencorp‘s trademark. Thus the specially manufactured goods exception does not apply and the district court properly applied the statute of frauds defense.
Sunshinе also argues that its breach of contract claim for men‘s black jeans should not have been barred by the statute of limitations because the claim should relate back to the filing of Sunshine‘s original petition. Sunshine was aware of the breach by June 1999, but the claim was not asserted until the amended complaint in November 2003. To relate back to the filing time of a prior petition, the amended petition cannot be “wholly based on a new, distinct, or different transaction or ocсurrence.”13 Sunshine‘s original petition only mentions boys’ jeans, and the claim for men‘s black jeans is a distinct claim. Thus the claim in the amended petition does not relаte back and is time-barred by the statute of limitations.
AFFIRMED IN PART; REVERSED AND REMANDED IN PART.