Kroger Co. v. US Foodservice of Atlanta

• Decision Date: 19 November 2004
• Docket Number: No. A04A0936, No. A04A0937.
• Citation: 607 S.E.2d 177,270 Ga. App. 525
• Parties: The KROGER COMPANY v. U.S. FOODSERVICE OF ATLANTA, INC. U.S. Foodservice OF Atlanta, Inc. v. The Kroger Company.
• Court: Georgia Court of Appeals

607 S.E.2d 177

270 Ga. App. 525

The KROGER COMPANY v. U.S. FOODSERVICE OF ATLANTA, INC.

U.S. Foodservice OF Atlanta, Inc. v. The Kroger Company.

Nos. A04A0936, A04A0937.

Court of Appeals of Georgia.

November 19, 2004.

David Newman, Edward Burch, Smith, Gambrell & Russell, Atlanta, for appellant.

J. Simpson, Atlanta, for appellee.

SMITH, Chief Judge.

U.S. Foodservice of Atlanta, Inc. (FS) filed a verified complaint against the Kroger Company (Kroger) seeking payment of $121,070.69 plus interest due on a commercial account. A jury found that Kroger owed $117,637.46. In entering judgment, the trial court added statutory prejudgment interest of $81,169.85 and statutory attorney fees of $29,821.10 to the verdict. Later, the court amended that judgment to remove the interest and attorney fees. In Case No. A04A0936, Kroger appeals the denial of its motion for directed verdict. In Case No. A04A0937, FS cross-appeals the deduction of the interest and attorney fees from the judgment. After review, we find that the trial court correctly refused to direct a verdict for Kroger but erred by removing the interest and attorney fees from the judgment.

Case No. A04A0936

On appeal, the evidence must be construed to uphold the verdict of the jury. Willis v. Brassell, 220 Ga.App. 348, 469 S.E.2d 733 (1996). Every presumption and inference arising from the evidence must be considered in favor of the verdict. White Stores v. Washington, 135 Ga.App. 67-68, 217 S.E.2d 391 (1975). So viewed, the evidence shows that from 1994 until mid-January 1999, Kroger ordered approximately $4.5 million of goods per year on an open account with FS, a wholesaler of food and food service products. After Kroger's last payment, FS audited the account and determined that Kroger still owed $121,070.69. FS sent a final demand letter on November 12, 1999 for payment of $121,070.69 and after Kroger failed to remit that sum, FS filed suit.

At trial, to establish the amount of Kroger's indebtedness, FS introduced documentary evidence and the testimony of Roberta Laccorn and Pamela Moore. Laccorn was FS's credit manager and Moore was its "dedicated bookkeeper," meaning that she had sole responsibility for Kroger's account.

FS distributed products to approximately 150 Kroger stores. Upon receiving an order from a Kroger store, FS would download the order and create an invoice listing the items to be delivered and their cost. FS would deliver the invoices in conjunction with shipments and a Kroger employee and FS's driver would check the delivery. Undelivered items would be marked as shorts at the point of delivery by the driver or a Kroger employee. The FS driver would then return the invoice and FS would manually correct its database to reflect the "shorts" and damaged or returned items and issue credits to Kroger's account. A customer copy of each invoice, as corrected, served as a delivery receipt and was left at the local store. Each invoice noted when payment was due and authorized the collection of attorney fees in the event of nonpayment. Based on the corrected invoices, Moore made adjustments to the database and the billing system. Each week, Moore sent billing statements to Kroger's corporate office in Nashville, Tennessee. Each weekly statement noted adjustments for credits and was accompanied by the invoices from which the statement was compiled. When Kroger wrote a check to FS, Kroger would include a "tear part" from the statement which identified the invoice numbers included in its payment. Issues of credits, shorts, and payments were resolved on a regular basis by representatives of Kroger and Moore. These accounting procedures remained in place from August 1994 through December 1997.

Problems arose after Kroger notified FS on December 17, 1997, that it would be changing its payment procedure on its deli account effective January 1, 1998. Kroger informed FS that it would no longer be making payments based on FS's statements and invoices because it was converting to a paperless system and would be processing payments to FS "from their local store scanning delivery sheets."

In January 1998, Kroger began remitting payments to FS without identifying any invoice numbers. Without the invoice identification, FS could not determine which particular invoices were being paid by Kroger. FS notified Kroger about the difficulties in posting payments. When FS asked Kroger for back-up documentation for its payments so that FS could properly post and credit its account, Kroger responded by saying that under its new system, "they had nothing to give us," to show what was being paid by each check.

At some point, Kroger instructed FS to stop sending copies of the invoices. As a result, when FS sent the weekly statements for payment to Kroger's corporate office, those statements were no longer accompanied by the underlying invoices. To credit Kroger's payments to its account, FS began posting Kroger's checks to the oldest unpaid invoices.

FS made its final delivery to Kroger on January 18, 1999, and Kroger made its last payment to FS on March 17, 1999. After applying all payments from Kroger, Laccorn and Moore determined that Kroger's account had an unpaid balance of $121,070.69.

To confirm the computation of the deficiency, FS tried without success to obtain Kroger's list of scanned items so that it could compare Kroger's list with its own invoices. Using a check register supplied by Kroger, FS verified that every check received from Kroger had been properly posted and deposited to Kroger's account. After deducting from Kroger's 1998 check register all duplicate check payments and after subtracting payments made by Kroger in 1998 for 1997 deliveries, FS determined that Kroger had paid $4,295,010.77 from January 1, 1998, forward. FS's shipments to Kroger for that same period totaled $4,415,783.28, resulting in a deficiency of $120,772.51. After applying billings due on other Kroger accounts, the net deficiency was $121,069.03.

Expressing confidence that Kroger's total debt was $121,070.69 and not the slightly lesser amount of $121,069.03, Laccorn testified that "we did two check registers and we did check it over twice. I checked once and Pam [Moore] checked. Even at one point in time I had another bookkeeper verify both mine and [Moore's]. It was triple checked." Laccorn testified that she believed that the computer calculation of $121,070.69 was more accurate than her manual total of $121,069.03.

Moore testified without contradiction that even after Kroger had changed its system, she had continued to use the invoices to adjust Kroger's account and issue credits. Moore testified that the invoices "were coming back with our drivers each day," and that that part of the process "never changed." She added, "[the invoices] would still come in to me and I would issue the credit, if they had a credit to be issued." Moore also testified that she continued sending statements to Kroger until the account was closed.

In addition, FS introduced documentary evidence, without objection, providing details of the invoices for sales made to Kroger between January 1, 1998, and the date the account was closed. A detailed register of invoices showed that the net total of deliveries less credits was $4,415,783.28. FS also introduced in evidence, without objection by Kroger, itemized statements of Kroger's account detailing the unpaid invoices and the delivery locations. These statements supplied support for the total of the balance that FS claimed was overdue. The authenticated statements were admitted in evidence as business records.

1. Kroger contends that the trial court should have directed a verdict against FS on the issue of damages because FS failed to prove its damages with the requisite specificity. Kroger complains that the jury's verdict was premised on conjecture and speculation. Kroger asserts that through its cross-examination of Laccorn and Moore, it elicited testimony showing discrepancies between the account statements and the individual invoices, thereby creating uncertainty as to what amount, if any, was due. "A directed verdict is authorized only when there is no conflict in the evidence on any material issue and the evidence introduced, with all reasonable deductions, demands a particular verdict." (Citation and footnote omitted.) H.J. Russell & Co. v. Jones, 250 Ga.App. 28-29, 550 S.E.2d 450 (2001). Here, the evidence with all reasonable deductions did not demand a particular verdict.

It is axiomatic that damages cannot be left to speculation, conjecture, or guess-work and must be proven with reasonable certainty. See Post Realty Assoc. v. DSL Assoc., 228 Ga.App. 678, 492 S.E.2d 600 (1997). To recover on its claim, FS had to prove that Kroger was indebted to FS "in a definite and correct amount." White Stores, supra, 135 Ga.App. at 67, 217 S.E.2d 391. The discrepancies at issue derive primarily from purported "shorts," items ordered but not delivered for which Kroger now claims it should have received credit on its account. While Laccorn did concede that some credits on a few invoices did not seem to appear on the corresponding statements, the issue of credits on the account was primarily addressed by Moore, who had sole responsibility for crediting the account when appropriate.

Moore testified that she was certain that all credits to which Kroger was entitled had been applied to the account and that there were no errors in issuing such credits. Moore was confident that she had properly credited Kroger's account for all shorts, returns, or damaged products. See Professional Ins. Svcs. v. Sizemore Elec. Co., 188 Ga.App. 463, 373 S.E.2d 276 (1988). Moore explained that certain credits due on an invoice might not have appeared promptly on a statement because she had created a dummy account on which to apply credits and post payments after Kroger had changed its payment procedures. Any purported discrepancy...