Wilferd v. Dig. Equity, LLC
Decision Date | 05 May 2021 |
Docket Number | Civil Action No. 1:20-cv-01955-SDG |
Parties | JACKLYN WILFERD, Plaintiff, v. DIGITAL EQUITY, LLC and KHURAM DHANANI, Defendants. |
Court | U.S. District Court — Northern District of Georgia |
This matter is before the Court on a motion for reconsideration filed by Defendants Digital Equity, LLC and Khuram Dhanani [ECF 40] and a partial motion to dismiss counterclaims filed by Plaintiff Jacklyn Wilferd [ECF 43]. For the following reasons, both motions are DENIED.
This action concerns allegations of breach of contract and fraud relating to the development and sale of the online domain wines.com. Wilferd initiated this action on May 6, 2020.2 She filed her Amended Complaint on June 11, assertingeight causes of action.3 On November 20, 2020, the Court granted in part and denied in part a motion to dismiss filed by Defendants (hereafter, the November 20 Order).4 That Order: (1) dismissed Count VIII (declaratory judgment) against both Defendants; (2) dismissed Count III (breach of contract) only as to Digital Equity; and (3) permitted Wilferd to proceed with Counts I, II, III (solely against Dhanani), IV, V, VI and VII.5 Defendants disagree with certain conclusions reached in the November 20 Order. Accordingly, on December 18, they filed the instant motion for reconsideration.6 Wilferd opposed that motion on January 4, 2021, and Defendants filed their reply on January 19.7
On December 4, 2020, Defendants answered and asserted four counterclaims against Wilferd: breach of contract (Count I); fraud (Count II); defamation (Count III); and attorneys' fees (Count IV).8 On December 28, Wilferd filed a motion to dismiss counterclaim Counts II and III. Defendants filed aresponse in opposition to that motion on January 11, 2021, and Wilferd filed her reply on January 25.9
The Local Rules of this Court caution that "[m]otions for reconsideration shall not be filed as a matter of routine practice." LR 7.2(E), NDGa. Such motions are appropriate only if "a party believes it is absolutely necessary." Id. Absolute necessity is recognized in three specific scenarios; "where there is: (1) newly discovered evidence; (2) an intervening development or change in controlling law; or (3) a need to correct a clear error of law or fact." Bryan v. Murphy, 246 F. Supp. 2d 1256, 1258-59 (N.D. Ga. 2003). See also Chesnut v. Ethan Allen Retail, Inc., 17 F. Supp. 3d 1367, 1370 (N.D. Ga. 2014) (); Pres. Endangered Areas of Cobb's Hist., Inc. v. U.S. Army Corps of Eng'rs, 916 F. Supp. 1557, 1560 (N.D. Ga. 1995) ( ).
A motion for reconsideration is not to be treated "as an opportunity to show the court how it could have done it better." Bryan, 246 F. Supp. 2d at 1259 (citing Pres. Endangered Areas of Cobb's Hist., Inc., 916 F. Supp. at 1560). Nor should it simply "present the court with arguments already heard and dismissed or [ ] repackage familiar arguments to test whether the court will change its mind." Id. (citing Brogdon ex rel. Cline v. Nat'l Healthcare Corp., 103 F. Supp. 2d 1322, 1338 (N.D. Ga. 2000)). Finally, it may not be used to "offer new legal theories or evidence that could have been presented in conjunction with the previously filed motion or response, unless a reason is given for failing to raise the issue at an earlier stage in the litigation." Id. (citing Adler v. Wallace Computer Servs., Inc., 202 F.R.D. 666, 675 (N.D. Ga. 2001)). See also Michael Linet, Inc. v. Vill. of Wellington, Fla., 408 F.3d 757, 763 (11th Cir. 2005) ( ). The ultimate decision on reconsideration is "committed to the sound discretion of the district court." Reid v. BMW of N. Am., 464 F. Supp. 2d 1267, 1270 (N.D. Ga. 2006).
Defendants contend the Court erred in its November 20 Order, specifically with regard to its analysis of Counts II, III, and V. Defendants do not point theCourt to newly discovered evidence or a shift in the governing law. Their request is instead premised on the belief that the Court committed two clear errors of fact or law.
No matter the characterization, Defendants' contentions are not of the ilk demonstrating absolute necessity as to justify reconsideration. As their reconsideration motion makes abundantly clear, Defendants raised these precise arguments in their motion to dismiss.10 They now maintain that the Court got it wrong the first time. Even if that were the case—which, as discussed below, the Court does not believe it is—that is not enough to grant Defendants their sought-after relief. E.g., Gold Cross EMS, Inc. v. Children's Hosp. of Ala., 108 F. Supp. 3d 1376, 1379 (S.D. Ga. 2015) () (punctuation omitted) (collectingcases); Chesnut, 17 F. Supp. 3d at 1370 (). Nonetheless, the Court will consider the merits of Defendants' positions in turn.
Defendants argue the Court erred by not applying a merger clause found in the Domain Agreement to bar Wilferd's breach of oral contact and fraudulent inducement claims against Dhanani. Both causes of action are premised on similar factual allegations. Wilferd alleges Dhanani made, and then failed to perform, a litany of oral promises relating to wines.com. None of these alleged oral promises were memorialized in either the Profit Agreement or Domain Agreement. Both agreements, however, contained merger clauses.
In the November 20 Order, the Court found the merger clause in the Profit Agreement foreclosed Wilferd's breach of oral contract claim against Digital Equity. See, e.g., Novare Grp., Inc. v. Sarif, 290 Ga. 186, 190 (2011); First Data POS, Inc. v. Willis, 273 Ga. 792, 795 (2001). But as to Dhanani, the Court concluded that he could not avail himself of the merger clause in that agreement because: (1) only Wilferd and Digital Equity—not Dhanani—were parties to the Profit Agreement, and (2) it expressly stated that it "constitutes and contains the entire agreement and understanding between the Parties hereto" and was "not binding upon[Digital Equity's] respective representatives."11 In other words, although the general rule in Georgia is that "an agent of a contracting party can rely upon a merger clause contained in the contract to preclude claims against the agent for his or her alleged representations made before formation of the contract,"12 the plain language of the Profit Agreement prevented Dhanani from doing so. Defendants may strongly disagree with this interpretation, but the Court is required to enforce the unambiguous terms of a contract as written. E.g., Office Depot, Inc. v. Dist. at Howell Mill, LLC, 309 Ga. App. 525, 529 (2011).
In their reconsideration motion, Defendants argue the Court additionally reached the wrong result by "only referenc[ing] the merger clause in the Profit Agreement" and "erroneously attribut[ing] contractual language found exclusively in the [Profit Agreement] . . . to the [Domain Agreement]."13 Put another way, Defendants aver that Dhanani should be able to avail himself of the merger clause in the Domain Agreement as to compel the dismissal of CountsIII and V against him. They assert the Court erred in the November 20 Order by ignoring or overlooking the merger clause in that agreement.
The Court clarifies that it did not ignore or overlook the merger clause in the Domain Agreement. It is true that the Court only analyzed Dhanani's ability to enforce the merger clause found in the Profit Agreement. But that is because, as the Court expressly stated, "Wilferd has [ ] sought the rescission of the Domain Agreement."14 It is well established in Georgia that "[a] party that rescinds is not limited by the contract terms." Sudler v. Campbell, 250 Ga. App. 537, 540 (2001). See also City Dodge, Inc. v. Gardner, 232 Ga. 766, 770 (1974); Jones v. Cartee, 227 Ga. App. 401, 403 (1997); Orion Cap. Partners, L.P. v. Westinghouse Elec. Corp., 223 Ga. App. 539, 542 (1996). The ultimate decision of whether Wilferd may rescind the Domain Agreement is at least one of mixed fact and law best determined at a later stage. City Dodge, 232 Ga. at 770 (); Crews v. Cisco Bros. Ford-Mercury, 201 Ga. App. 589, 591 (1991) (). See also Novare, 290 Ga. at 190 ( ). At bottom, reconsideration is not warranted.
Defendants argue that the Court also erred in its analysis of Count II. Wilferd alleges Digital Equity breached the Profit Agreement by selling the domain and website for wines.com without paying her fifty percent of the profits. In their motion to dismiss, Defendants argued this claim was not supported by the plain language of the Profit Agreement. In the November 20 Order, the Court: (1) analyzed the plain language of the Profit Agreement,...
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