FK Inc. v. SEE U.S.A. LLC.
| Decision Date | 18 June 2010 |
| Docket Number | No. 56A05-0911-CV-654,Cause No. 56D01-0601-PL-1,56A05-0911-CV-654 |
| Parties | FK, INC., Appellant-Plaintiff,v.SEE USA, LLC., Appellee-Defendant. |
| Court | Indiana Appellate Court |
ATTORNEY FOR APPELLANT: ROBERT H. LITTLE Brookston, Indiana
ATTORNEY FOR APPELLEE: CHRISTOPHER J. BRAUN ANGELA M. DORRELL Plews Shadley Racher & Braun, LLP Indianapolis, Indiana
APPEAL FROM THE NEWTON SUPERIOR COURT
The Honorable Daniel J. Molter, Judge
FK, Inc., appeals the trial court's grant of summary judgment in favor of See USA, LLC. We affirm in part, reverse in part, and remand.
The issues before us are:
I. whether the trial court properly awarded $82,514.50 in damages and $85,778.35 in attorney fees to See USA in connection with its check fraud claim against FK; and
II. whether the trial court properly awarded $204,499.58 in alleged lost profits to See USA in connection with its breach of contract claim against FK.
See USA, an Indiana company, is a "qualified jobber" of Shell Oil Company ("Shell") that provides Shell gasoline and signage to gas stations. App. p. 16. FK is an Indiana company that owns two gas stations: one in Watseka, Illinois, and one in Kentland, Indiana. On December 16, 2003, See USA and FK entered into an "Open Dealer Supply and Sales Agreement" with respect to the Watseka gas station, which was to last for three years. App. p. 41. On August 6, 2004, the parties entered into a similar agreement for the Kentland gas station, which was to last for five years. Both contracts contained the following language:
See USA hereby grants to Dealer [FK] the right to use SHELL'S identifications to identify Dealer's Station as a "Shell" station and to identify and advertise at Dealer's Station for sale the Petroleum Products and other Shellproducts Dealer may purchase from See USA for resale. Nothing herein contained shall obligate Dealer to make any purchases from See USA. However, Dealer shall not sell, under SHELL'S identifications, any products other than See USA's products, or any mixture or adulteration of any of the See USA products with each other or with any other product or material. If Dealer ceases to sell the Petroleum Products or uses SHELL'S identifications in a manner which deceives or causes a likelihood of confusion to the motoring public, or if this Agreement terminates for any reason, Dealer shall immediately and completely discontinue the use of SHELL'S identifications.
App. pp. 16, 41.1 Both contracts listed the maximum amount of gasoline See USA could deliver to FK's stations in any given month, but did not list a minimum amount FK must purchase.
There were two ways in which FK paid for fuel deliveries to its stations by See USA. First, FK accepted Shell credit cards at the stations. Shell in turn would forward the credit card receipts to See USA, which then credited FK's ongoing account in the amount of those receipts. Additionally, See USA would invoice FK for fuel deliveries, and FK would approve automated clearing house ("ACH") electronic debits from its account for the amount of those invoices. Beginning in 2004, a number of FK's ACH debits to See USA were returned for insufficient funds. After this began occurring, See Page 4
USA's president, Roger Distler, took personal responsibility for approving any fuel delivery to FK's stations.
See USA last delivered fuel to the Kentland station in May 2005; it did not stop delivering fuel to the Watseka station at that time. FK arranged for a different fuel supplier for the Kentland station. The Kentland station continued accepting Shell credit cards after this date, and Shell forwarded the receipts on to See USA. FK contends that this resulted in See USA improperly receiving funds totaling $89,664.10 for fuel purchases for fuel that actually was supplied by a different company.
On January 24, 2006, FK filed suit against See USA to recover these funds that it alleged See USA had converted, and See USA filed an answer on February 23, 2006. See USA was still delivering fuel to the Watseka station at this time. On February 26 and March 1, 2006, See USA made fuel deliveries to the Watseka station; See USA issued an invoice to FK for these deliveries in the amount of $12,362.55. On March 3, 5, and 8, 2006, See USA made fuel deliveries to the Watseka station; See USA issued an invoice to FK for these deliveries in the amount of $28,894.70. At some point, FK authorized ACH withdrawals from its account for those amounts, but later issued stop payment orders for those withdrawals. See USA made no more fuel deliveries to the Watseka station.
On April 26, 2006, See USA filed an amended answer and included a counterclaim against FK. The counterclaim alleged that FK had breached the contracts for both the Watseka and Kentland stations and sought lost profits for those allegedbreaches. Additionally, the counterclaim alleged that FK had committed check fraud under Indiana Code Section 35-43-5-12 with respect to its stop payment orders for the last two fuel purchase invoices at the Watseka station; the check fraud claim sought treble damages and attorney fees. The contracts between the parties were silent as to attorney fees in the event of a breach.
In the ensuing litigation, See USA filed a motion to compel FK to respond to its discovery requests. After the trial court granted the motion, FK still failed to file the necessary discovery responses. On September 14, 2007, as a sanction the trial court entered default judgment against FK on both its complaint and See USA's counterclaim. On July 24, 2008, the trial court agreed to set aside the default judgment. In doing so, it sanctioned FK by requiring it to pay $14,063.06 in attorney fees to See USA. It also entered the following facts that it deemed established:
1. FK cannot deny that on December 16, 2003, FK and See USA entered into a binding contract for the sale and delivery of fuel products for a three (3) year term for FK's retail fuel station located at 1150 East Walnut, Watseka, Illinois ("Watseka Supply Agreement");
2. FK cannot deny that FK received fuel shipments from See USA on or about February 26, 2006 and March 1, 2006 at FK's Watseka, Illinois property (the "Watseka Shell");
3. FK cannot dispute the accuracy of the invoices submitted to FK for the February 26, 2006 and March 1, 2006 fuel deliveries;
4. FK cannot dispute the accuracy and/or validity of the notification See USA provided to FK for the required electronic, Automated Clearing House ("ACH") Draft, payment by FK's bank to See USA in the amount of $12,362.55 for previous specific fuel shipments;
5. FK cannot deny that FK authorized an ACH Draft payment to See USA in the amount of $12,362.55 for the February 26, 2006 and March 1, 2006 fuel shipments;
6. FK cannot deny that FK, subsequent to the fuel deliveries and prior to the transfer of payment to See USA's bank, issued a stop payment order to its bank on the
$12,362.55;
7. FK cannot deny that FK received fuel shipments from See USA on or about March 3, March 5, and March 8, 2006 at the Watseka Shell;
8. FK cannot dispute the accuracy of the invoices See USA sent to FK for the March 3, March 5, and March 8, 2006 fuel deliveries;
9. FK cannot dispute the accuracy and/or validity of the notification See USA provided to FK for the ACH Draft payment by FK's bank to See USA in the amount of $28,894.70 for the March 3, March 5, and March 8, 2006 fuel shipments;
10. FK cannot deny that FK authorized an ACH payment to See USA in the amount of $28,894.70 for the March 3, March 5, and March 8, 2006 fuel shipments;
11. FK cannot deny that FK, subsequent to the fuel deliveries and prior to the transfer of payment to See USA's bank, FK issued a stop payment order to its bank for the
$28,894.70;
12. FK cannot deny that FK sold the fuel delivered to the Watseka Shell on February 26, 2006 and March 1, March 3, March 5, and March 8, 2006, to the general public and has not offered or made alternate payment to See USA; 13. FK cannot deny that See USA notified FK, on or about March 21, 2006, that FK's authorization to its bank for payment had been blocked by subsequent stop payment orders;
14. FK cannot deny that FK was aware of the stop payment orders on the February 26, 2006 and March 1, March 3, March 5, and March 8, 2006 fuel shipments and that FK knew that See USA was not paid for these fuel shipments;
15. FK cannot deny that FK has not purchased fuel from See USA for the Watseka Shell since March, 2006;
16. FK cannot deny that FK has sold non-Shell Oil Company fuel at the Watseka Shell since March, 2006;
17. FK cannot deny that on August 6, 2004, FK and See USA entered into an Open Dealer Supply and Sales Agreement ("Kentland Supply Agreement"), wherein FK agreed to purchase from See USA certain petroleum products for five (5) years;
18. FK cannot deny that on numerous occasions FK failed to make timely payments for petroleum products supplied by See USA to FK at the Kentland Truck Stop location;
19. FK cannot deny that FK last purchased fuel from See USA for the Kentland property in May 2005;
20. FK cannot deny that the Kentland Truck Stop is a Shell Oil Company branded retail fuel station and that FK has failed to return to See USA certain Shell branded signage as required by the Kentland Supply Agreement....
App. pp. 94-95. FK paid the attorney fees as awarded to See USA and did not attempt an interlocutory appeal from this order.
On July 1, 2009, See USA filed a motion for summary judgment on its counterclaim against FK. On September 29, 2009, the same date as the hearing on See USA's summary judgment motion, FK filed its own motion for summary judgment on its conversion claims against See USA. On October 15, 2009, the trial court entered summary judgment in favor of See USA on its counterclaims. The trial court awarded a judgment against FK in the amount of $41,257.25, representing the actual amount of the unpaid fuel invoices from...
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