Eagle 6 Tech. Servs. v. Victor Nat'l Holdings, Inc.
| Decision Date | 01 September 2021 |
| Docket Number | 4:20-CV-183 (CDL) |
| Parties | EAGLE 6 TECHNICAL SERVICES, LLC Plaintiff, v. VICTOR NATIONAL HOLDINGS, INC. and G.W. HANDAL DESIGN AND CONSULTING, LLC, Defendants. |
| Court | U.S. District Court — Middle District of Georgia |
This action arises from a simple contractual dispute that the parties have attempted to elevate to something more complicated. Counsel has responded with motions to dismiss designed to whittle down the claims. As explained in the remainder of this order, the following claims have been plausibly stated in Plaintiff Eagle 6 Technical Services LLC's amended complaint and Defendant Victor National Holdings, Inc.'s counterclaim: (1) Eagle 6's claims against Victor National for breach of contract, account stated, tortious interference, unjust enrichment, promissory estoppel, and conversion of equipment and intellectual property; and (2) Victor National's counterclaims for tortious interference and attorney's fees. National Holdings' and Eagle 6's motions to dismiss (ECF Nos 28 & 33) are otherwise granted, and G.W. Handal Design and Consulting, LLC's motion to dismiss (ECF No. 29) is granted.
Eagle 6 asserts a claim for “account stated” against Victor National. “A suit on open account is available as a simplified procedure to the provider of goods and services where the price of such goods or services has been agreed upon and ‘where it appears that the plaintiff has fully performed [its] part of the agreement and nothing remains to be done except for the other party to make payment.'” Five Star Steel Constr., Inc. v. Klockner Namasco Corp., 524 S.E.2d 783, 785 (Ga.Ct.App. 1999) (alteration in original) (quoting Haas v. Jaffe, 163 S.E. 226, 227 (Ga.Ct.App. 1932)). “An account stated is an agreement by which persons who have had previous transactions with each other fix the amount due in respect to such transactions and the one indebted promises payment of the balance.” Lawson v. Dixie Feed & Seed Co., 145 S.E.2d 820, 821- 22 (Ga.Ct.App. 1965). An account may be converted from an open account to an account stated if either (1) there is an express agreement as to the amount and a promise to pay or (2) there is an implied agreement, such as when an “account is rendered to the debtor and he fails to object to it.” Id. at 822.
Victor National points out that “when there is a dispute that goes to either assent to the services, terms of the contract, what work was performed, the quality of the performance, or cost, then suit on account is not the proper procedure for suit, because there is a factual issue other than nonpayment on the account.” Five Star Steel Constr., Inc., 524 S.E.2d at 785. Relying on the factual allegations in its counterclaim, Victor National asserts that account stated is an improper procedure because there are factual disputes regarding the existence of a valid contract, the terms of the contract, and what work was performed. At this stage of the litigation, though, the Court must consider whether the allegations in Eagle 6's complaint, taken as true, establish an account stated claim. They do. Eagle 6 alleges that Eagle 6 provided goods and services to Victor National, Eagle 6 submitted invoices to Victor National, Victor National did not object to the invoices, Victor National repeatedly promised to pay the invoices, and Victor National failed to pay. The complaint states a claim for account stated.
Eagle 6's tortious interference with contract claim is based on its contention that Victor National induced Eagle 6's subcontractors and employees to sever their contracts with Eagle 6. To recover on a claim of tortious interference with contract, a plaintiff must prove: “(1) improper action or wrongful conduct by the defendant without privilege; (2) the defendant acted purposely and with malice with the intent to injure; (3) the defendant induced a breach of contractual obligations or caused a party or third part[y] to discontinue or fail to enter into an anticipated business relationship with the plaintiff; and (4) the defendant's tortious conduct proximately caused damage to the plaintiff.” Mabra v. SF, Inc. 728 S.E.2d 737, 739-40 (Ga.Ct.App. 2012) (alteration in original) (quoting Tidikis v. Network for Medical Commc'ns & Rsch., LLC, 619 S.E.2d 481, 486 (Ga.Ct.App. 2005)).
To establish that the Defendant acted without privilege, “the plaintiff must show that the defendant was a stranger to the contract or business relation at issue.” Id. at 740. “Under the so-called ‘stranger doctrine,' ‘only a stranger to both the contract at issue and the business relationship giving rise to and underpinning the contract may be liable for tortious interference [with the contract or the relationship].'” Id. (alteration in original) (quoting Perry Golf Course Dev., LLC v. Hous. Auth. of the City of Atlanta, 670 S.E.2d 171, 175 (Ga.Ct.App. 2008). “One is not a stranger to the contract just because one is not a party to the contract . . . .” Id. (quoting Atlanta Mkt. Ctr. Mgmt., Co. v. McLane, 503 S.E.2d 278, 282 (Ga. 1998)). “Those who have a direct economic interest in or would benefit from a contract with which they are alleged to have interfered (even though not intended third-party beneficiaries of the contract) are not strangers to the contract and cannot have tortiously interfered.” Id. And, the parties to “an interwoven contractual arrangement are [not strangers and therefore] not liable for tortious interference with any of the contracts or business relationships.” Id. (alteration in original) (quoting McLane, 503 S.E.2d at 283-84).
Here, Eagle 6 alleges that it hired three employees “to facilitate performance of the services to [Victor National] under the Prime Contract.” Am. Compl. ¶¶ 24, 26-27, ECF No. 24. Eagle 6 further alleges that it retained “certain sub-contractors and employed personnel to provide services” to Victor National under the Prime Contract. Id. ¶ 23. Victor National was not a party to the employment contracts or the contracts with the subcontractors. Although the alleged purpose of the contracts was to provide services to Victor National, the Court cannot conclude at this pleading stage that, based solely upon this alleged purpose, Victor National was not a stranger to the employment contracts or the subcontracts and thus cannot be liable for tortious interference. Victor National's motion to dismiss this claim is therefore denied.
As an alternative to its breach of contract claim against Victor National, Eagle 6 alleges a claim for unjust enrichment. Under Georgia law, “unjust enrichment applies when as a matter of fact there is no legal contract . . ., but where the [defendant] has been conferred a benefit by the [plaintiff] which the benefited party equitably ought to return or compensate for.” Smith v. McClung, 452 S.E.2d 229, 232 (Ga.Ct.App. 1994) (alterations in original) (quoting Ga. Tile Distribs., Inc. v. Zumpano Enters., Inc., 422 S.E.2d 906, 908 (Ga.Ct.App. 1992)). Victor National's sole basis for seeking dismissal of the unjust enrichment claim is that Eagle 6 also makes a breach of contract claim. “An unjust enrichment theory does not lie where there is an express contract.” Pryor v. CCEC, Inc., 571 S.E.2d 454, 456 (Ga.Ct.App. 2002). Eagle 6's unjust enrichment claim, however, is clearly an alternative to its breach of contract claim, and it is set out in a separate count in the amended complaint. A party may maintain alternative and inconsistent claims, so, at this point in the litigation, the Court declines to dismiss the unjust enrichment claim simply because Eagle 6 also brings an alternative breach of contract claim.
Eagle 6 makes a promissory estoppel claim against Victor National. To prevail on this claim, Eagle 6 must show that Victor National made certain promises, that Victor National should have expected Eagle 6 to rely on those promises, Eagle 6 “did in fact rely on such promises” to its detriment, and “injustice can be avoided only by enforcement of the promise.” Sparra v. Deutsche Bank Nat. Tr. Co., 785 S.E.2d 78, 83 (Ga.Ct.App. 2016) (quoting Canterbury Forest Assn. v. Collins, 532 S.E.2d 736, 739 (Ga.Ct.App. 2000)). Victor National professes that it has no idea what factual allegations form the basis of Eagle 6's promissory estoppel claim, but it is not difficult to discern. Eagle 6 alleges that Victor National failed to pay Eagle 6 for equipment and services despite repeated promises to do so. To induce Eagle 6 to continue providing services to Victor National, Victor National's agent promised to issue stock in Victor National to Eagle 6. Am. Compl. ¶¶ 30-31, 80. Victor National reasonably expected Eagle 6 to rely on this promise. Id. ¶ 81. Relying on this promise, Eagle 6 continued providing services to Victor National instead of ceasing to perform work for which it was not being paid, but Victor National never issued stock or made payments to Eagle 6. Id. ¶¶ 32-34, 82. The Court is satisfied that the amended complaint states a claim for promissory estoppel.
Eagle 6 also asserts a claim for conversion against Victor National. To establish a conversion claim in cases where the defendant appears to have lawfully come into possession of the plaintiff's property, a plaintiff must prove: “(1) title to the property or the right of possession[;] (2) actual possession in the other party[;] (3) demand for return of the property[;] and (4) refusal by the other party to return the property.” Exec. Cars, LLC v. W. Funding II, Inc., 826 S.E.2d 370, 378 (Ga.Ct.App. 2019) (alterations in original) (quotin...
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