City of Lawrenceville v. Ricoh Electronics, Inc.
| Decision Date | 04 March 2005 |
| Docket Number | Civil Action No. 1:03-CV-3057-TWT. |
| Citation | 370 F.Supp.2d 1328 |
| Parties | CITY OF LAWRENCEVILLE, Plaintiff, v. RICOH ELECTRONICS, INCORPORATED, Defendant. |
| Court | U.S. District Court — Northern District of Georgia |
Anthony O.L. Powell, Webb, Tanner & Powell, Lawrenceville, GA, for Plaintiff.
Joseph Duane Wargo, Julie Christine Jared, Wargo & French, Atlanta, GA, for Defendant.
This is a breach of contract action. It is before the Court on the Plaintiff's Motion for Summary Judgment [Doc. 33] and the Defendant's Motion for Summary Judgment [Doc. 38]. For the reasons set forth below, the Plaintiff's motion is DENIED, and the Defendant's motion is GRANTED.
Defendant Ricoh Electronics, Inc. ("Ricoh") is a California corporation engaged in, among other things, the manufacture of thermal paper. Plaintiff City of Lawrenceville is the natural gas utility provider for Ricoh's thermal paper manufacturing plant in Lawrenceville, Georgia. Four natural gas meters were installed at the manufacturing facility. One of these gas meters was set to measure natural gas consumption in thousands of cubic feet. The other three measured in hundreds of cubic feet. From March 1996 through October 2002, the Plaintiff's Data Processing Department generated bills as if all four meters measured consumption in hundreds of cubic feet. During this period, the Plaintiff unwittingly billed Ricoh for only about one-tenth of the natural gas Ricoh consumed. In November 2002, after discovering this error, the Plaintiff announced that it had mistakenly underbilled Ricoh for the period from March 1996 through October 2002. The Plaintiff informed Ricoh that it owed $1,519,592.13 for unpaid services and taxes.
On September 10, 2003, the Plaintiff brought this action in the Superior Court of Gwinnett County. The Plaintiff asserted claims for breach of ordinance, quantum meruit, unjust enrichment, and attorney's fees. Ricoh removed the Plaintiff's action to this Court, where the Plaintiff and Ricoh have submitted cross-motions for summary judgment on the Plaintiff's claims.
Summary judgment is appropriate only when the pleadings, depositions, and affidavits submitted by the parties show that no genuine issue of material fact exists and that the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). The court should view the evidence and any inferences that may be drawn in the light most favorable to the nonmovant. Adickes v. S.H. Kress and Co., 398 U.S. 144, 158-59, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). The party seeking summary judgment must first identify grounds that show the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The burden then shifts to the nonmovant, 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, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
The Plaintiff asserts a claim against Ricoh entitled "Breach of Ordinance." (Compl.¶¶ 10-13). Within this claim, the Plaintiff alleges that Ricoh's "refusal to pay for the services provided by the City constitutes a violation of Defendant's obligations under its agreement with the City and its obligations under the ordinance." (Id. ¶ 12). Under Georgia law, no ordinance is valid unless it is adopted in compliance with the city charter. See, e.g., Barnes v. Merritt, 428 F.2d 284, 288 (5th Cir.1970)1 (); Toomey v. Norwood Realty Co., 211 Ga. 814, 816-17, 89 S.E.2d 265 (1955). The Lawrenceville City Charter requires that an ordinance be adopted in accordance with rules established by the City Council. Lawrenceville, Ga., City Charter §§ 2.22, 2.29. The Plaintiff submits an amalgam of unsigned documents and records of minutes of City Council meetings to suggest that the City's natural gas rates are set by ordinance. These documents and records do not satisfy any of the requirements for a valid ordinance. The Plaintiff concedes as much in his response to Ricoh's motion when it acknowledges that it "merely entitled Count 1 of its Complaint `Breach of Ordinance' to establish the appropriate statute of limitations...." (Pl.'s Memo. Resp. Def.'s Mot. Summ. J. at 16).
Ricoh contends, and this Court agrees, that the Plaintiff's claim is properly recast as a claim for indebtedness on an account. An account is an unsettled claim or demand by one person against another based upon a transaction creating a debtor and creditor relationship between the parties. Harris v. Miller Brother's Farms, Inc., 161 Ga.App. 377, 378, 288 S.E.2d 639 (1982). When parties to an account reach an agreement on the amount due, the account becomes stated and is binding on the parties. Tate v. Gairdner, 119 Ga. 133, 135, 46 S.E. 73 (1903); Meredith v. Smith & Shiver, 157 Ga.App. 522, 523, 277 S.E.2d 805 (1981); Phillips v. Ableson, 60 Ga.App. 558, 559, 4 S.E.2d 411 (1939). A debtor may express agreement with the creditor about the sum due by paying the amount charged. Meredith, 157 Ga.App. at 523, 277 S.E.2d 805; Phillips, 60 Ga.App. at 559, 4 S.E.2d 411. An account stated is presumed correct and conclusive between the parties regardless of the actual correct amount due. Best Concrete Products Co. v. Medusa Corp., 157 Ga.App. 97, 100, 276 S.E.2d 147 (1981); Phillips, 60 Ga.App. at 559, 4 S.E.2d 411. The account stated is binding not only on the debtor party, but also on the party rendering the account. Tate, 119 Ga. at 135, 46 S.E. 73.
A party is bound by its statements of an account unless it shows that the account should be reformed based on a mistake. Tate, 119 Ga. at 135, 46 S.E. 73; Phillips, 60 Ga.App. at 559, 4 S.E.2d 411. Unless a plaintiff can state a claim in equity for reformation of the account on grounds of mistake, the plaintiff is entitled to no more than the amount of the account stated. The power in equity to relieve mistakes should be exercised with caution. Thomaston v. Fort Wayne Pools, Inc., 181 Ga.App. 541, 542, 352 S.E.2d 794 (1987). Even if there is a unilateral mistake, a party may not seek reformation of an account or contract if reasonable diligence could have prevented the mistake. Layfield v. Sanford, 247 Ga. 92, 93, 274 S.E.2d 450 (1981); Frame v. Hunter, Maclean, Exley & Dunn, P.C., 236 Ga.App. 226, 228, 511 S.E.2d 585 (1999). The Defendant contends that if the Plaintiff had exercised reasonable care in reading or inspecting the meter, it could have avoided its billing mistake. The billing errors were not caused by any defect in the meter; rather, the Plaintiff's employees simply failed to read the meter properly. The Plaintiff provides no evidence suggesting that it employed reasonable care or argument concluding that due diligence would not have prevented its erroneous underbilling. Thus, this Court is compelled to conclude that the Plaintiff could have prevented the mistake through exercise of reasonable diligence and is thereby barred from seeking reformation of its account with Ricoh.
Where a mistake in a contract or account is unilateral, the contract or account may only be reformed where fraud or inequitable conduct by the other party induces the mistake. Prince v. Friedman, 202 Ga. 136, 138, 42 S.E.2d 434 (1947); Fore v. Parnell-Martin Companies, Inc., 192 Ga.App. 851, 852, 386 S.E.2d 723 (1989). The Plaintiff presents no evidence suggesting that fraudulent conduct by Ricoh caused the Plaintiff's mistake. The Plaintiff's Rule 30(b)(6) representative testified that the meter misreading and billing error did not have "anything to do with something that Ricoh did or should have done," but was "solely related to the efforts made or efforts that were not made by the City of Lawrenceville." (Farmer Dep. at 58). Again, the Plaintiff presents no argument refuting this legal conclusion or evidence belying this factual assertion. Thus, as there is no evidence that fraudulent conduct by Ricoh contributed to the Plaintiff's billing error, the Plaintiff cannot obtain reformation of the account.
The Plaintiff limits its response to these arguments to a contention that Georgia law requires a customer who has been underbilled for natural gas to reimburse the provider if the consumer had reason to know that it was being underbilled. In support of this purported doctrine, the Plaintiff cites the Supreme Court of Georgia's decision in Brown v. Walton Elec. Membership Corp., 272 Ga. 453, 531 S.E.2d 712 (2000). In Brown, an electric utility corporation mistakenly underbilled a consumer for a period of over five years. The corporation sued the consumer for the correct billing amount, and the consumer raised accord and satisfaction, equitable estoppel, and statute of limitations defenses. Brown, 272 Ga. at 453, 531 S.E.2d 712. The Court of Appeals held that where an electric company mistakenly underbills its customer, the customer cannot assert affirmative defenses. Brown, 238 Ga.App. at 348, 518 S.E.2d 727 (citing Habersham Elec. Membership Corp. v. Mize, 211 Ga.App. 329, 330-31, 439 S.E.2d 26 (1993)). The Supreme Court reversed the Court of Appeals and expressly overruled the holding in Mize:
Although Mize has been the law in this state for more than six years, we believe it is misguided and should be overruled. In our view, the purpose of the Georgia Territorial Electric Service Act, and, in particular, O.C.G.A. § 46-3-11(a), is to protect the public from possible fraud, corruption, and discrimination in rate charges. The legislature did not mean to prohibit a customer from asserting defenses against a supplier which undercharged the customer and then sued for its mistake. Nor did it intend to protect the supplier from the consequences of its own negligence. We hold, therefore, that a customer can assert accord...
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In re Coca-Cola Enterprises, Inc. Derivative Lit.
...(applying Delaware law). The Court deems this failure to be an abandonment of the claim. See City of Lawrenceville v. Ricoh Electronics, Inc., 370 F.Supp.2d 1328, 1333 (N.D.Ga.2005). Even if the Court considered these arguments and found that they were sufficiently plead, moreover, demonstr......