LSQ Funding Grp., L.C. v. EDS Field Servs., Case No. 6:10–cv–1246–Orl–22DAB.

• Decision Date: 10 July 2012
• Docket Number: Case No. 6:10–cv–1246–Orl–22DAB.
• Parties: LSQ FUNDING GROUP, L.C., Plaintiff, v. EDS FIELD SERVICES n/k/a HP Enterprise Services, LLC, Defendant.
• Court: U.S. District Court — Middle District of Florida

879 F.Supp.2d 1320

LSQ FUNDING GROUP, L.C., Plaintiff,
v.
EDS FIELD SERVICES n/k/a HP Enterprise Services, LLC, Defendant.

Case No. 6:10–cv–1246–Orl–22DAB.

United States District Court,
M.D. Florida,
Orlando Division.

July 10, 2012.

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David B. King, Thomas A. Zehnder, Frederick S. Wermuth, Vincent Falcone, III, King, Blackwell, Zehnder & Wermuth, P.A., Orlando, FL, for Plaintiff.

A. Culham, Hewlett Packard Company, Plano, TX, Christopher J.M. Collings, Robert M. Brochin, John Butler Rosenquest, IV, Morgan, Lewis & Bockius, LLP, Miami, FL, for Defendant.

ORDER
ANNE C. CONWAY, District Judge.

This cause comes before the Court for consideration of the following motions: (1) Plaintiff LSQ Funding Group, L.C.'s Motion for Summary Judgment (Doc. No. 47); (2) Defendant EDS Field Services', now known as HP Enterprise Services, LLC, Motion for Summary Judgment (Doc. No. 49); (3) Plaintiff's Motion to Exclude the Proposed Expert Testimony of Keith R. Ugone (Doc. No. 58); (4) Plaintiff's Motion in Limine (Doc. No. 59); and (5) Defendant's Motion in Limine (Doc. No. 60).

I. BACKGROUND

Plaintiff is a financial services firm based in Florida whose core business is factoring. (Eliscu Decl. (Doc. No. 47–1) ¶¶ 3, 4.) Plaintiff enters into factoring agreements with its clients, known as vendors, who invoice their customers, known as account debtors, for goods and/or services which the vendors provide to the account debtors. ( Id. at ¶ 4.) Pursuant to the factoring agreement between Plaintiff and a vendor, the vendor assigns its accounts receivable, or invoices, to Plaintiff. ( Id.) Plaintiff has the right, but not the obligation, to purchase the vendor's invoices. ( Id.) If Plaintiff chooses to purchase the vendor's invoices, it collects payment of the invoices directly from the account debtor. ( Id.) This arrangement

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allows the vendor to bridge the cash-flow gap between the time the vendor issues the invoices and the time the invoices are due. ( Id.)

Defendant provides business and information technology solutions to its customers. (Doc. No. 28 ¶ 3.) Defendant hired Homeland Solutions, Inc. (“Homeland”) to install underground cables at various worksites for its customers. (Joint Pretrial Statement, Admitted Facts (Doc. No. 80) ¶ 9.j.) In March 2007, Plaintiff and Homeland entered into a Factoring and Security Agreement (the “Factoring Agreement”). ( Id. at ¶ 9.k.) Pursuant to the Factoring Agreement, Plaintiff purchased certain Homeland invoices issued to Defendant. ( Id. at ¶ 9.l.)

When Plaintiff purchased invoices from Homeland, it emailed a copy of the invoices to Bob Gangler, Defendant's Program Manager, to assess the risk associated with, or the collectability of, the invoices. (Doc. No. 47–1 ¶¶ 5, 11.) Gangler was the most knowledgeable person with respect to the work Homeland provided to Defendant. (Gangler Dep. (Doc. No. 44–1) p. 41.) Except for differences in invoice numbers and amounts, in substance Plaintiff's emails stated the following:

Dear Bob Gangler:

This email is written to you (“Customer”) on behalf of Vendor [Homeland], and LSQ Funding Group, L.C. (“Assignee”) [Plaintiff], as the assignee of all of the Vendor's present and future accounts receivable (“Accounts”). Assignee has the sole right to receive payment and resolve disputes on behalf of the Vendor.

The Vendor has advised us that Customer is indebted to them on invoice(s) [# ] in the amount of [$,# ] (“Amount Owing”), a copy of which is attached. So that we may continue extending financial accommodations to Vendor in reliance on the invoice, please have an authorized person of the Customer respond to this email affirming the Customer's promise and representation that the (i) invoice will be paid by the Customer to Assignee without recoupment, setoff, defense or counterclaim, including any future defenses or claims and (ii) terms set forth in the invoice are correct. The party responding to this email represents and confirms that said party is authorized by the Customer to respond to and acknowledge this email.

Please note that you are not waiving any present or future claims against the Vendor, but are merely agreeing not to assert those claims against us.

For our mutual benefit, should either of us find it necessary to retain counsel to enforce our rights against the other regarding this Agreement, the prevailing party shall recover its attorney's fees and expenses from the unsuccessful party.

Your response to this email shall be an acceptance and agreement of the terms hereof, and confirmation of the Amount Owing.

(Doc. No. 45–1 pp. 1–2.) Gangler then replied, “Approved, I agree with the below letter.” ( Id.)

Between April 30, 2007 and October 1, 2007, Plaintiff sent Defendant approximately 30 such email exchanges, pursuant to which Defendant paid Plaintiff in full for over 100 Homeland invoices. (Doc. No. 47–1 ¶ 13.) However, in January 2008 Defendant discovered that Homeland submitted 35 fraudulent invoices to Plaintiff between

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October 2007 and January 2008, which Plaintiff had purchased. (Doc. No. 80 ¶ 9.m.) These invoices appeared to be for work that had already been performed and for which Defendant had already made payment. (Doc. No. 47–1 ¶ 15.) Plaintiff attached the fraudulent invoices at issue to 20 separate email exchanges. ( Id. at ¶ 14.)

In April 2008, A. Maxwell Eliscu, Plaintiff's President and CEO, met with Gangler and his supervisor, Herbert Weyh, II, to discuss the fraudulent invoices. ( Id. at ¶ 16.) The parties agreed at this meeting that Defendant would continue to employ Homeland as a vendor and that Plaintiff would continue to factor Homeland, in order to allow Homeland the opportunity to repay Plaintiff. ( Id.) Pursuant to this arrangement, Plaintiff collected $263,380 from Homeland. (Doc. No. 80 ¶ 9.r.) After Homeland went out of business in 2010, Plaintiff brought this action against Defendant to recover the face value of the 35 fraudulent invoices, which totals $610,995.09. (Doc. No. 47–1 ¶ 19); (Doc. No. 80 ¶ 9.p).

II. LEGAL STANDARD

A court should grant a motion for summary judgment “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). It is the movant who bears the initial burden of “identifying for the district court those portions of the record which it believes demonstrates the absence of a genuine issue of material fact.” Cohen v. United Am. Bank of Cent. Fla., 83 F.3d 1347, 1349 (11th Cir.1996) (quotations omitted). Once the movant carries its initial burden, the non-movant may avoid summary judgment by demonstrating an issue of material fact. Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1116 (11th Cir.1993) (citation omitted). In the case in which the nonmovant bears the burden of proof at trial, the movant may carry its initial burden by either negating an essential element of the non-movant's case or by demonstrating the absence of evidence to prove a fact necessary to the non-movant's case. Id. at 1115–16.

When analyzing a motion for summary judgment, a court draws all inferences from the evidence in the light most favorable to the non-movant and resolves all reasonable doubt in the non-movant's favor. Porter v. Ray, 461 F.3d 1315, 1320 (11th Cir.2006). Notwithstanding this inference, “[t]here is no genuine issue for trial unless the non-moving party establishes, through the record presented to the court, that it is able to prove evidence sufficient for a jury to return a verdict in its favor.” Cohen, 83 F.3d at 1349. In the context of cross-motions for summary judgment, the summary judgment standard does not change. Ernie Haire Ford, Inc. v. Universal Underwriters Ins. Co., 541 F.Supp.2d 1295, 1297 (M.D.Fla.2008).

III. CROSS–MOTIONS FOR SUMMARY JUDGMENT A. Summary of the Parties' Arguments

In its three-count Amended Complaint, Plaintiff alleges a cause of action for breach of contract, and in the alternative, causes of action for negligent misrepresentation and promissory estoppel. (Doc. No. 15.)

Plaintiff moves for summary judgment on its breach of contract claim and on Defendant's affirmative defenses. ( See Doc. No. 47.) Plaintiff asserts that the

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email exchanges between the parties created enforceable contracts known in the factoring industry as “no-offset agreements,” and it seeks to recover the full face value of the fraudulent invoices from Defendant. In response, Defendant contends that Plaintiff does not show that a valid contract exists due to the absence of evidence demonstrating mutual assent. ( See Doc. No. 66.) Defendant also argues that parol evidence is admissible to prove the failure of a condition precedent to the formation of their agreement. Defendant further contends that even if a contract were formed, it would not obligate Defendant to pay for work that Homeland did not perform. Defendant also asserts that a latent ambiguity in the purported agreements creates an issue of fact. Finally, Defendant argues that if it is found liable for breach of contract, Plaintiff's damages must be reduced by the $263,380 it collected from Homeland.

Defendant moves for summary judgment on Plaintiff's claims for breach of contract, negligent misrepresentation and promissory estoppel. ( See Doc. No. 49.) With respect to Plaintiff's breach of contract claim, Defendant maintains that the plain language of the email exchanges fails to evidence mutual assent to a term requiring payment for fraudulent invoices. Due to the alleged absence of a term in the contract addressing Defendant's obligation to pay fraudulent invoices, Defendant contends that the Court must construe the agreement against Plaintiff as the drafter. Finally, Defendant argues that no contract exists due to a lack of consideration and mutuality of obligation.

As discussed below, Plaintiff met its initial burden on summary judgment to show that no disputed issue of...