Imex Intern., Inc. v. WIRES EL

• Decision Date: 05 May 2003
• Docket Number: No. A03A1218, No. A03A1219.
• Citation: 583 S.E.2d 117,261 Ga. App. 329
• Parties: IMEX INTERNATIONAL, INC. v. WIRES ENGINEERING, s.r.j. Imex International, Inc. v. Co. Fi. Plast, s.a.s.
• Court: Georgia Court of Appeals

583 S.E.2d 117

261 Ga. App. 329

IMEX INTERNATIONAL, INC. v. WIRES ENGINEERING, s.r.j.

Imex International, Inc. v. Co. Fi. Plast, s.a.s.

Nos. A03A1218, A03A1219.

Court of Appeals of Georgia.

May 5, 2003.

Reconsideration Denied May 21, 2003.

Certiorari Denied September 22, 2003.

Phelps & Campbell, R. Chris Phelps, Leverett & Daughtry, Robert F. Leverett, Elberton, for appellant.

Fortson, Bentley & Griffin, Roy E. Manoll III, Richard G. Douglass, Athens, for appellees. ELDRIDGE, Judge.

In Case No. A03A1218, Imex International, Inc. ordered a machine from the Italian corporation, Wires Engineering, s.r.j. to make diamond wire by coating aircraft cable with polyurethane to cause diamond beads to adhere to the cable. The machine was delivered in January and invoiced to Imex, which did not pay the invoice in full but made a partial payment of the invoice price with no written protest to the invoice price. In January and February, after testing the machine for about 30 days, Imex made a written rejection on July 22, 1999, because Imex contended that the machine did not work as represented and worked like the machines that it already had. Wires brought suit on open account, which Imex answered, raising issues of no agreement as to price, failure of consideration, rejection, and lack of a certificate of authority. Wires moved for summary judgment, which the trial court granted. Finding no error, we affirm.

In Case No. A03A1219, Imex contracted with the Italian corporation, Co. Fi. Plast, s.a.s., an affiliate of Wires, to supply it with diamond beads for use in making diamond wire, which wire is used to cut stone; but Imex contended that the beads delivered to it by Co. Fi. were defective, because Imex's customers stated that the diamond wire was defective. Co. Fi. had a policy of granting a credit for defective beads, but to receive the credit, Imex had to return the defective beads to Co. Fi. for verification of the defects, which was not done in this case. As part of the purchase agreement, Imex alleged that it was to act as Co. Fi.'s exclusive sales agent in the United States if Imex purchased $300,000 worth of beads annually and that Imex would receive a rebate of five percent for sales in excess of such sum; however, there was no written evidence of the rebate or the agency agreement. Co. Fi. sued Imex on open account for nonpayment of the beads shipped, and Imex answered and countersued for damages for set-off and recoupment. Imex never returned to Co. Fi. any of the beads that it contended were defective. Co. Fi. moved for summary judgment, which was granted. Finding no error, we affirm.

Case No. A03A1218

The owner of Wires, Emilio Brocco, told Imex that the defects that Imex customers complained of in its manufactured diamond wire were not caused by defective beads but, rather, were caused by the plastification machine used by Imex to manufacture the diamond wire. The plastification machine melts polyurethane and injects the molten polyurethane around the diamond beads in dies holding the diamond beads against the cable; the beads and polyurethane coat the aircraft cable to create diamond wire. Brocco recommended that Imex buy Wires' plastification machine, because Wires' machine was different and superior to the machines Imex already had. Brocco stated that Wires' machine would resolve any of Imex's problems with its final product.

Prior to delivery, Imex made the down payment check payable to Co. Fi. instead of Wires, and the January 9, 1999 down payment check for $35,000 was returned to Imex to be reissued to Wires. On December 15, 1998, and January 4, 1999, Wires invoiced Imex $89,000 for the total purchase price of the machine. On January 20, 1999, Imex received the invoice and treated it as a pro forma invoice, because Imex believed that Wires was engaged in the European business custom of allowing the contract price to be negotiated, even after delivery of the goods. On February 28, 1999, Imex paid Wires $35,000 as partial payment, and Imex contended that the balance of the purchase price was to be negotiated.

Prior to the purchase, Amini Bijani, Imex's engineer, production manager, and vice-president, went to Italy to examine, inspect, and test the plastification machine; he inspected the machine for three hours. Imex did not request that Bijani be allowed to examine and observe the machine in operation for three to four weeks, as it contended was necessary for a proper inspection, because as the production manager, Bijani could not be spared from Imex's plant. In January 1999, the machine arrived at the Imex plant prior to any payment. After delivery, Imex tested Wires' plastification machine for one month before stopping its usage because the machine was the same as those already in use by Imex and performed no better than the two machines already in use. Marssoud Bersharat, Imex's president, testified that a reasonable inspection and testing of the machine required three to four weeks. The machines had no written warranties. Imex never made any effort to return the machine to Wires after it rejected the machine in writing on July 22, 1999, because Imex wanted partial payment, shipping costs, and custom duties reimbursed.

1. Imex contends that the trial court erred in granting summary judgment on an open account, because it contends that there was a genuine issue of material fact regarding the purchase price of the plastification machine. We do not agree.

(a) This was a suit on open account brought by the seller, a merchant, who extended credit and delivered tangible property in the ordinary course of business, against the purchaser, a merchant, who did business with the seller on credit. An action for an open account on invoice is an action on implied contract where the seller fully performed on a unilateral contract by delivery of the goods and where the purchaser either expressly or impliedly promised to pay by acceptance of the goods shipped. OCGA §§ 7-4-16 ("Unless otherwise provided in writing signed by the obligor, a commercial account becomes due and payable upon the date a statement of the account is rendered to the obligor.... `Commercial account' means an obligation for the payment of money arising out of a transaction to sell or furnish, or the sale of, or furnishing of, goods or services other than a `retail installment transaction.'"); 9-2-7 (implied contract); 9-3-25 (suit on open account); Wheat Enterprises v. Redi-Floors, 231 Ga.App. 853, 855-856(1), 501 S.E.2d 30 (1998); Gage v. Tiffin Motor Homes, 153 Ga.App. 704, 706-707(1), 266 S.E.2d 345 (1980); Gordy Tire Co. v. Bulman, 96 Ga.App. 739, 741(1), 101 S.E.2d 220 (1957).

An action on open account is a simplified pleading procedure where a party can recover what he was justly and equitably entitled to without regard to a special agreement to pay such amount for goods or services as they were reasonably worth when there exists no dispute as to the amount due or the goods or services received. An action on open account may be brought for materials furnished and work performed. However, if there is a dispute as to assent to the services or to acceptance of the work done or as to what work was to be performed and the cost, then an action on open account is not a proper procedure.

(Citations omitted.) Watson v. Sierra Contracting Corp., 226 Ga.App. 21, 27(b), 485 S.E.2d 563 (1997); accord Wheat Enterprises v. Redi-Floors, supra at 855-856, 501 S.E.2d 30.

Furthermore, in the absence of a liquidated demand, OCGA § 7-4-16 is inapplicable. A debt is liquidated when it is certain how much is due and when it is due. A liquidated claim is an amount certain and fixed, either by the act and agreement of the parties or by operation of law; a sum which cannot be changed by the proof.

(Citations and punctuation omitted; emphasis in original.) Wheat Enterprises v. Redi-Floors, supra at 856, 501 S.E.2d 30. When the seller attaches the invoice to the complaint showing the goods shipped, the price, and the balance due, such constitutes a sufficient suit on an open account and sets forth liquidated damages. Gordy Tire Co. v. Bulman, supra at 741, 101 S.E.2d 220. When the authenticated invoice has been tendered into evidence in a suit on open account and is supported by testimony that the invoiced amount was unpaid, a prima facie case for the seller has been proven. White Stores, Inc. v. Washington, 135 Ga.App. 67, 68 217 S.E.2d 391 (1975). The purchaser who admits receipt of the goods has the burden of proving that the amount of the invoice was incorrect or that there was a failure of consideration for the goods at trial, because a rebuttable presumption arises that there was full performance at the invoice price. Andrews v. Adams Drive, Ltd., 142 Ga.App. 32, 33-34(4), 234 S.E.2d 835 (1977); F.N.B. Financial Co. &c. v. Glaze Tire Co., 140 Ga.App. 184, 185, 230 S.E.2d 342 (1976). However, when there exists a bona fide dispute as to the amount due or the receipt of goods, open account is the wrong theory of recovery, because such simplified action is for cases where a party seeks to recover what he justly and equitably is entitled to without regard to any special agreement as to payment. Zampatti v. Tradebank Intl. Franchising Corp., 235 Ga.App. 333, 343-344(10), 508 S.E.2d 750 (1998); Schluter v. Perrie, Buker, Stagg & Jones, P.C., 230 Ga.App. 776, 777(1), 498 S.E.2d 543 (1998) (physical precedent only); Watson v. Sierra Contracting Corp., supra.

In this case, Imex admitted delivery and receipt of the goods, which is an essential element of an action on open account against it. OCGA § 11-2-103(1)(c); Roberson v. Ocwen Fed. Bank, 250 Ga.App. 350, 351(1), 553 S.E.2d 162 (2001); Mountain Bound v. Alliant FoodService, 242 Ga.App. 557, 559-560(3), 530 S.E.2d 272 (2000). Also, the evidence in this action on open account showed that Wires fully performed in the sale of the invoiced goods, because Imex admitted...