Iler Grp., Inc. v. Discrete Wireless, Inc.

• Decision Date: 24 February 2015
• Docket Number: Civil Action No. 1:14–CV–00447–SCJ.
• Citation: 90 F.Supp.3d 1329
• Parties: ILER GROUP, INC. d/b/a Fleetistics, Plaintiff, v. DISCRETE WIRELESS, INC. d/b/a Nextraq, Defendant.
• Court: U.S. District Court — Northern District of Georgia

90 F.Supp.3d 1329

ILER GROUP, INC. d/b/a Fleetistics, Plaintiff

v.DISCRETE WIRELESS, INC. d/b/a Nextraq, Defendant.

Civil Action No. 1:14–CV–00447–SCJ.

United States District Court, N.D. Georgia, Atlanta Division.

Signed Feb. 24, 2015.

John Alan Sugg, Matthew Robert Thiry, Davis Matthews & Quigley, Atlanta, GA, for Plaintiff.

Katherine Marie Smallwood, Lee Alexander Peifer, Rocco E. Testani, Sutherland Asbill & Brennan, LLP, Atlanta, GA, for Defendant.

ORDER

STEVE C. JONES, District Judge.

This matter appears before the Court on Defendant's Motion to Dismiss Plaintiff's Complaint. Doc. No. [13]. For the following reasons, Defendant's Motion is GRANTED, in part, and DENIED, in part.

I. FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff originally filed its complaint on February 18, 2014, raising only a breach of contract claim against Defendant. Doc. No. [1]. Defendant responded by filing a motion to dismiss the complaint on March 13, 2014. Doc. No. [5]. Plaintiff, in turn, filed its First Amended Complaint (Doc. No. [9] ) as a matter of right. See Fed.R.Civ.P. 15(a)(1). In Plaintiff's amended complaint, it raised the same breach of contract claim and also added a claim under the Georgia Uniform Deceptive Trade Practices Act (“GUDTPA”). Doc. No. [9]. Defendant then filed another motion to dismiss, this time arguing against both claims. Doc. No. [13].

On or about, July 11, 2006, Plaintiff and Defendant entered into a Dealer Agreement for the purchase of GPS tracking devices, resale of those devices, and provision of certain services related to commercial automobile fleet tracking. Doc. No. [9], p. 4.¹ The agreement's initial term lasted three years, but the term automatically renewed on a month-to-month basis until either party provided written notice to terminate it. Doc. No. [9–2], p. 11–12, 15. Pursuant to the agreement, Defendant granted Plaintiff, the “Dealer,” the right to

(i) purchase Products from Discrete Wireless and market, sell and distribute such Products to Customers located in and taking delivery within the Territory; (ii) market and sell the Services on behalf of Discrete Wireless as its sales representative; (iii) install the Products only for Customers; and (iv) provide First Level Support for the Products and the Services (collectively, the “Dealer Rights”).²

Id. at p. 5. The agreement defines “Product” as “(I) a Unit; and (ii) any additional hardware products and related accessories that Discrete Wireless offers from time to time.” Id. “ ‘Unit’ means Discrete Wireless' vehicle mounted wireless vehicle tracking device and related antennae and cables ... Discrete Wireless may designate additional devices as a ‘Unit’ by providing written notice to Dealer.” Id.

After Plaintiff purchased Products from Defendant, Plaintiff would then execute a separate agreement with Customers for the resale of the Products.Id. at p. 6.³ Plaintiff set the resale price and could set its own installation charges. Id. Defendant would not activate a Unit—the GPS tracking device—however, unless Plaintiff first obtained a Service Order from the Customer. Id. (“Prior to delivery or installation of a Unit to a Customer, Dealer shall obtain a Service Order (covering the Base Services for such Unit) that is fully executed by the authorized representative of Customer and Dealer shall deliver such fully executed Service Order to Discrete Wireless.”). “ ‘Service Order’ means Discrete Wireless' form of order ... for the purchase of Services directly from Discrete Wireless and the terms and conditions included on Discrete Wireless' form of order.” Id. at p. 5.

It is important to understand the services offered to Customers under the Dealer Agreement—services provided either directly by Defendant or by Plaintiff on behalf of Defendant. “Service” is defined as “the Base Service and other services that Discrete Wireless offers Customers from time to time.” Id. “ ‘Base Service’ means Discrete Wireless' GPS data collection and Internet-based vehicle tracking service that transmits GPS data approximately every five (5) minutes from the Unit to Discrete Wireless' Internet-based vehicle tracking solution.” Id. at p. 4. The agreement incorporates an attachment to define “First Level Support”—the support services Plaintiff was required to perform for Customers of Defendant. Id. This support includes maintaining telephone support during business hours “for Customer questions and Customer issues with Products and Services[,]” providing Customer training on the Products and Services, managing the return of Products, providing “assistance with delivery and installation of any add-on features to the Products or Services[,]” maintaining Customer account records, and providing “all service calls for each of the Products and Services during the applicable Service Order Term.” Id. at p. 15.

Under the agreement, Defendant was required to pay Plaintiff a commission within forty-five days after the last day of each month. Id. at p. 7. “The Commission payment includes full consideration to Dealer for providing First Level Support for those Units and the corresponding Base Services relating to a Service Order submitted by Dealer and accepted by Discrete Wireless.” Id. Plaintiff only received commissions for “Customer Base Service Fees received by Discrete Wireless during the Term where the Customer Base Service Fees relate to a Service Order for at least a three (3) year term that was submitted by Dealer and accepted by Discrete Wireless. ” Id. (emphasis added). In other words, Plaintiff received no commission unless Plaintiff secured a Customer for Defendant for a three year term. Defendant had no obligation to pay Plaintiff a commission if a Service Order expired or was terminated, or if a Customer deactivated its Unit. Id.

Plaintiff alleges, and Defendant does not deny, that on or around December 15, 2008, Defendant expressly told Plaintiff that “Mobitex network based devices ... will no longer be eligible for Distributor commission after the November 2008 commission cycle.” Doc. No. [9], p. 7. At that time, Plaintiff had been receiving “substantial ongoing commissions streaming from Mobitex network based devices.” Id. at p. 8. Plaintiff claims that this unilateral modification of the agreement amounted to a breach of contract by Defendant. Id. Defendant made no commission payments to Plaintiff arising out of the Mobitex network based devices beginning with the December 2008 billing cycle through when Defendant provided notice to terminate the agreement on January 7, 2014.Id. at p. 9.

After Defendant terminated the agreement, Plaintiff alleges Defendant “began sending emails and/or otherwise contacting [Plaintiff]'s Direct Bill Customers.” Id. at p. 14. “Direct Bill Customers” are not billed by Defendant for Service Orders procured by Plaintiff. Id. at p. 11. These customers contract directly with Plaintiff for products and services, and Plaintiff, in turn, contracts with Defendant. Id. Plaintiff incorporated one email in its complaint to illustrate the alleged contact Defendant made with Plaintiff's Direct Bill Customers. The email was sent by Mr. David Flores, an account manager for Defendant, to Ms. Diane Reynolds, who Plaintiff claims is a Direct Bill Customer representative for the City of Palm Coast, Florida. Id. at p. 15. The email states,

Ms. Reynolds,

My name is David Flores with NexTraq[.] I am your new account manager. Here is my contact information. I extend to you an award winning level of account management in effort to exceed the experience you may have had with Fleetistics. If I may be of help please do not hesitate to reach out to me. Business as usual is all that's called for. Continue to use the same equipment and platform to manage your vehicles going forward. I look forward to speaking with you in the future.

Doc. No. [9–2], p. 38. Plaintiff claims this “post-termination contact” is a violation of GUDTPA because it either “passes off the goods or services provided by [Plaintiff] to the Direct Bill Customers as the goods and services of [Defendant,]” or “causes the likelihood of confusion or of misunderstanding as to the source, sponsorship, approval, or certification of goods or services[,]” or both. Doc. No. [9], p. 14–15.

II. LEGAL STANDARD

A complaint may be dismissed if the facts as pleaded do not state a claim for relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 679–80, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (explaining “only a complaint that states a plausible claim for relief survives a motion to dismiss”); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 561–62, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (retiring the prior Conley v. Gibson, 355 U.S. 41, 45–46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957) standard which provided that in reviewing the sufficiency of a complaint, the complaint should not be dismissed “unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief”). In Iqbal, the Supreme Court reiterated that although Rule 8 of the Federal Rules of Civil Procedure does not require detailed factual allegations, it does demand “more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937.

In Twombly, the Supreme Court emphasized a complaint “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” 550 U.S. at 555, 127 S.Ct. 1955. Factual allegations in a complaint need not be detailed but “must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Id. at 555, 127 S.Ct. 1955 (internal citations and emphasis omitted).

III. DISCUSSION

A. Breach of Contract Claim

Plaintiff alleges that Defendant breached the Dealer Agreement when it unilaterally stated it would no longer pay Plaintiff commissions on Mobitex GPS Units in December 2008. Defendant...