Management Assistance, Inc. v. Computer Dimensions

• Decision Date: 21 July 1982
• Docket Number: Civ. A. No. C81-1300A,C81-1424A.
• Citation: 546 F. Supp. 666
• Parties: MANAGEMENT ASSISTANCE, INC., A New York Corporation, Plaintiff, v. COMPUTER DIMENSIONS, INC., A Georgia Corporation, Defendant. COMPUTER DIMENSIONS, INC., Plaintiff, v. BASIC FOUR CORPORATION, Sorbus, Inc., and Management Assistance, Inc., Defendants.
• Court: U.S. District Court — Northern District of Georgia

546 F. Supp. 666

MANAGEMENT ASSISTANCE, INC., A New York Corporation, Plaintiff, v. COMPUTER DIMENSIONS, INC., A Georgia Corporation, Defendant.

COMPUTER DIMENSIONS, INC., Plaintiff, v. BASIC FOUR CORPORATION, Sorbus, Inc., and Management Assistance, Inc., Defendants.

Civ. A. Nos. C81-1300A, C81-1424A.

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

July 21, 1982.

Jerry B. Blackstock, Mark R. Swanson, Powell, Goldstein, Frazer & Murphy, Atlanta, Ga., Gerald Walpin, Marvin R. Lange, Susan J. Schwartz, Rosenman, Colin, Freund, Lewis & Cohen, New York City, for Management Assistance Inc.

Robert D. Feagin, Katharine C. Robey, Gambrell & Mobley, Atlanta, Ga., for Computer Dimensions Inc.

ORDER

SHOOB, District Judge.

These two actions arise out of the parties' contractual dealings over a period of approximately four years. Both cases are presently before the Court on (1) an amended motion for summary judgment by Management Assistance, Inc. (MAI), Basic Four Corporation (BFC) and Sorbus, Inc. (Sorbus), (2) Computer Dimensions, Inc.'s (CDI) motion to compel answers to certain of its interrogatories and to compel production of certain documents and (3) a motion for a protective order by MAI, BCF and Sorbus.

FACTS

The Court finds the following facts to be relevant to the disposition of the pending motions and undisputed by the parties unless otherwise indicated. About May 1978 Mr. Carl Childre, a consultant and advisor to CDI¹ contacted BFC² on behalf of CDI. CDI asserts that from the outset it sought from BFC a multiple system discount contract, a contract for the sale of a number of computer systems at a discount, or a dealership agreement. Subsequently, the parties had numerous discussions regarding the sale of BFC computers to CDI. The record shows the following written agreements between the parties:

1. Purchase agreement dated September 28, 1978, through which CDI purchased from BFC a computer system, a Basic Four Model 610-B. MAI's Exhibit 2. This agreement was signed by CDI's president, Lauralee Childre, on September 28, 1978 and accepted by BFC, through Mr. J.F. Carse, BFC's manager of contracts administration, on November 14, 1978.

2. Purchase agreement dated November 27, 1978, through which CDI purchased from BFC certain add-on equipment to be used with the previously purchased computer system. MAI's Exhibit 7. This agreement was executed by Carl Childre on behalf of CDI, writing the name of Lauralee Childre, on November 27, 1978 and by Mr. Carse on June 8, 1979.

3. A letter agreement dated June 15, 1979, which according to MAI bars all of CDI's state law claims. MAI's Exhibit 19. This letter agreement was accepted by CDI through its president on July 3, 1979. The agreement provides as follows:

This letter will confirm the understanding between BASIC FOUR CORPORATION (BFC) and COMPUTER DIMENSIONS, INC. (CDI).

In consideration of CDI's payment to BFC of an amount equal to Ten Thousand ($10,000.00) Dollars and release of BFC (which is hereby acknowledged) from every claim, liability or responsibility which BFC may have to CDI, whether or not now known, arising out of or incurred in connection with any act taken or omission made by CDI with respect to:

(a) CDI's Basic FourR Computer System and under the Agreement for Purchase of Basic Four Equipment dated Sept. 28, 1978 including any amendments thereto;

(b) any application software its quality, merchantability, installation, maintenance, operation or failure to operate, content or lack of content, which was installed on, or omitted to be installed on CDI's Basic Four Computer System;

(c) any responsibility for previously made commitments and/or agreements between BFC and CDI whether oral or written; and

(d) any contractual or other undertaking or duty which BFC had to CDI regardless of its nature;

BFC shall deliver to CDI the following equipment:

(a) 1350 Lightning Processor;

(b) 2581 DISC capacity upgrade 35 MB to 75 MB (2)

(c) 1307 Memory, 32 KB Module (one)

(d) Reconfiguration of BOSS Pack

(e) Further, BFC agrees to provide maintenance service on CDI's Basic Four Computer System through Sorbus Inc. (under the standard terms and conditions of a fully executed Sorbus Maintenance Agreement) for the current minimum monthly maintenance charge plus a surcharge of $300.00 per month for the period of time CDI has ownership of BFC system.

As of October 21, 1981, the date of Mr. Childre's deposition, BFC had delivered to CDI all of the items enumerated in the June 15, 1979 agreement. Deposition of Carl Childre at p. 299. As of October 22, 1981, the date of Mrs. Childre's deposition, CDI had failed to pay BFC the $10,000.00 provided for in the said agreement. Deposition of Lauralee Childre at p. 207.

The record also shows the following unexecuted proposed agreements:

1. On September 18, 1978 CDI signed a volume discount purchase order which would have given CDI the option to acquire up to fifteen computer systems from BFC at an escalating discount. Id. at 10. The said purchase order shows on its face that it was never executed by BFC.³

2. On February 19, 1979 CDI signed a second volume discount purchase order which it submitted to BFC for approval. Id. at 16. This purchase order also on its face shows that it was never accepted by BFC.

No other written agreements were executed or exchanged by the parties. Carl Childre Deposition at pp. 252 & 292. On the other hand, CDI asserts that BFC made various representations to CDI before and at the time the agreement of June 15, 1979 was submitted to CDI which entitle it to relief against BFC in these actions. Specifically, CDI contends that the following events took place:

1. The September 18, 1978 volume discount purchase order was presented to BFC by Messrs. Yaeger and Stevens, respectively the manager of BFC's Atlanta office and a salesman at the said office, in September of 1978. Affidavit of Mr. Gary M. Stevens at ¶ 8. At that time Mr. Yaeger represented to CDI that the first system under the said volume purchase order would be installed by November 15, 1978. Id.

2. Even after Mr. Yaeger knew from BFC headquarters that the September 10, 1978 purchase order would not be accepted by BFC, Mr. Yaeger failed to communicate this to CDI officials or to Mr. Stevens. Affidavit of Carl Childre at ¶ 4 (hereinafter "Childre Affidavit"); Affidavit of Gary M. Stevens at ¶ 10. Instead, Mr. Yaeger told CDI officials that BFC would sell CDI an initial system at a 35% discount, a lower discount than that available through the September 10, 1978 purchase order, and that the volume discount purchase order would still be awarded. Childre Affidavit at ¶ 4.

3. In November of 1978, after CDI officials became acquainted with the BFC computer system in question, they were so dissatisfied with it that they requested Mr. Yaeger to stop delivery on the single unit which CDI had purchased at a 35% discount. Id. at ¶ 6. Another reason for CDI's request to stop delivery was that CDI had not yet received the promised volume discount purchase agreement. Id. Mr. Yaeger insisted that he would take care of all the problems and that the volume discount purchase order would in fact be approved by BFC; thus, he urged CDI to accept delivery of the unit covered by the purchase order dated September 28, 1978. Affidavit of Clifford W. Shealey at ¶ 5. See MAI's Exhibit 2. In December of 1978 BFC delivered the said unit to CDI. This purchase agreement provided that CDI and BFC entered into a software vendor concessionship. MAI's Exhibit 2.

4. At the request of BFC, in mid-March 1979, various officials of BFC and CDI met in Jacksonville, Florida. Affidavit of Dennis LaPidus at ¶ 9. The purpose of the meeting was to discuss various commitments made to CDI by Mr. Yaeger on behalf of BFC which had not been carried out. Affidavit of Alan M. Davis at ¶ 6. At that time, Mr. Davis, then Director of Marketing for BFC's then newly formed Distributive Data Processing (DDP) Division, "promised CDI that the volume discount contract (the OEM contract) , a type of contract for the sale of a number of computer systems for eventual resale by the purchaser, would be approved by BFC and handled through the DDP Division." Id.; Deposition of Lanny Kent at p. 62. At that time the parties also discussed how CDI's BFC computers would be serviced. Childre Affidavit at ¶ 8. Mr. Davis stated that the DDP Division had to work with Sorbus and that although the normal maintenance charge would be $600.00 per month, the DDP Division would charge only $300.00 to CDI and pay the difference to Sorbus. Childre Affidavit at ¶ 8.

5. After the Jacksonville meeting, Lanny Kent, a sales manager in the DDP Division, delivered to CDI a second purchase order for fifteen BFC-610 computer systems. See MAI's Exhibit 16. Mr. Kent characterized this order as an OEM contract. Kent Deposition at pp. 38-39. Concurrently, Mr. Kent received a deposit of $7,245.00 from CDI for the said purchase order and $58,000.00 as payment for the first system delivered to CDI in December of 1978. Id. at p. 44. Mr. Kent assured CDI that this purchase order was then a "firm contract and that he Mr. Childre could now buy computer systems from BFC under ..." this agreement. Id. at p. 46. CDI would not have paid the $58,000.00 due on the first computer had it not been led to believe that it had obtained a contract for the purchase of an additional fifteen computers. Id. at p. 53.

6. On April 5, 1979, Mr. Davis returned to CDI the second purchase order for the fifteen 610 computers unexecuted by BFC together with CDI's check for $7,245.00 and a letter explaining the reasons for BFC's action. See MAI's Exhibit 17. This letter stated, inter alia, that

the contract which I am returning will be superseded by one which will take into account all of the provisions we discussed. Lanny Kent will be submitting this contract for your review immediately upon its completion and review by Basic Four Corp.

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