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Yellowbook Inc. v. Always In Service, Inc.

United States District Court, Third Circuit

August 12, 2013

YELLOWBOOK INC., Plaintiff,
v.
ALWAYS IN SERVICE, INC., et al., Defendants.

MEMORANDUM

EDUARDO C. ROBRENO, District Judge.

I. INTRODUCTION

Plaintiff, Yellowbook, Inc., formerly known as Yellow Book Sales and Distribution Company, Inc. ("Plaintiff"), brings this action against Defendants, Always in Service, Inc., doing business as 24/7 Emergency Locksmith ("AIS"), Guy Halperin ("Halperin"), and Yuvall Attoun ("Attoun, " and AIS, Halperin and Attoun, collectively, "Defendants"). Plaintiff alleges, generally, that Defendants breached the parties' written contractual agreements for directory advertising services, and seeks recovery of the unpaid balance of $997, 842.61, together with interest and attorney's fees. Pl.'s First Am. Compl., ECF No. 24.

Plaintiff's First Amended Complaint ("Complaint") pleads the following: Count I Breach of Contract against Defendant AIS; Counts II-III Breach of Contract against Defendants Halperin and Attoun, respectively; Count IV Account Stated; and Count VI[1] pleads an alternative theory of Unjust Enrichment. Id. at 9-19. In response, Defendants deny the existence of any contracts between the parties and thus deny liability for any unpaid balance. Defendants have also asserted a counterclaim against Plaintiff, alleging Plaintiff's breach of certain "oral" contracts. Defs.' Answer & Countercl., ECF No. 27.

Pending before the Court are Plaintiff's motions for summary judgment. Pl.'s Mot. Summ. J. on Plaintiff's First Am. Compl., ECF No. 49; Plaintiff's Mot. Summ. J. on Defs.' Countercl., ECF No. 50. Because Defendants fail to meet their burden of production at this stage of the proceeding, the Court will grant Plaintiff's motions for summary judgment.

II. FACTS & PROCEDURAL POSTURE[2]

According to Plaintiff's Complaint, the parties entered into a series of written contractual agreements with Plaintiff, contracting for advertising and related services to market and promote Defendants' business, which included locksmith and security repair and installation services, and the repair, replacement, removal, installation, or alteration of windows, doors and garage doors. The Complaint alleges that, beginning in July 2009, Attoun personally, and on behalf of AIS, entered into multiple written contractual agreements with Plaintiff for several 2010 through 2011 Yellowbook publications. Similarly, beginning in February 2010, Halperin personally, and on behalf of AIS, entered into multiple written contractual agreements with Plaintiff for several 2010 through 2012 Yellowbook publications.

Relevant here, Plaintiff alleges that AIS entered into a total of eighty-six two-sided contracts, for which Plaintiff alleges a total balance of $997, 842.61 is due and outstanding. Of these eighty-six contracts, Plaintiff alleges that Attoun also personally bound himself for thirty-two contracts, for which Plaintiff alleges a $243, 519.50 balance remains outstanding; similarly, Plaintiff alleges that Halperin also personally bound himself for fifty-four contracts, for which Plaintiff alleges a $754, 323.11 balance remains outstanding. Pl.'s First Am. Compl. 8-9.

The parties attempted but were unable to resolve their conflicts informally. Thus, on July 18, 2011, Plaintiff initiated this breach-of-contract action. Pl.'s Compl., ECF No. 1. Defendants Halperin and Attoun filed a Motion to Dismiss (ECF No. 12), and Defendant AIS filed an Answer and Counterclaim. Defs.' Answer & Countercl., ECF No. 13. Following a hearing on the motion to dismiss, held on November 7, 2011, the Court issued a scheduling order granting Plaintiff leave to file an amended complaint by November 17, 2011. Order, Nov. 7, 2011, ECF No. 22. On November 17, 2011, Plaintiff filed its First Amended Complaint. Pl.'s First Am. Compl.

Initially, and without reason other than neglect for their tardiness, Defendants failed to appear, plead, or otherwise defend. Accordingly, default was entered against them on December 21, 2011. On December 22, 2011, Defendants filed an Answer to Plaintiff's First Amended Complaint and Counterclaim.[3] Defs.' Answer & Countercl., ECF No. 27. Thereafter, on January 11, 2012, preferring to decide the case on the merits and given the lesser sanctions available, the Court granted Defendants' Motion to Set Aside Default (ECF No. 26), and instead sanctioned Defendants $500 to compensate Plaintiff for having requested the entry of default. Order, Jan. 11, 2012, ECF No. 33.

On June 1, 2012, the Court conducted a discovery conference. At the conference, it became clear that considerable confusion existed regarding what claims Plaintiff was asserting under what contracts, and what defenses to those claims Defendants were raising. To streamline the litigation and join the issues, the Court ordered Plaintiff to file motions for summary judgment on both its First Amended Complaint and Defendants' Counterclaim. Order, June 1, 2012, ECF No. 47. Additionally, the Court ordered Plaintiff to produce, among other discovery, records identifying any credits posted to Defendants' accounts for mistakes, complaints, or similar communications recorded in call logs, emails, or similar correspondence between Plaintiff and Defendants. Id . The Court further instructed Defendants that if additional discovery was needed to respond to Plaintiff's motions for summary judgment, Defendants could make such a demand under Rule 56(d) of the Federal Rules of Civil Procedure. Hr'g Tr. 39:4-25, June 1, 2012, ECF No. 58.

In accordance with the Court's order, on June 18, 2012, Plaintiff filed the instant Motion for Summary Judgment on Plaintiff's First Amended Complaint (ECF No. 49) and Motion for Summary Judgment on Defendants' Counterclaim (ECF No. 50). Defendants filed a Response in Opposition to Plaintiff's Motion for Summary Judgment on Plaintiff's First Amended Complaint (ECF No. 54) and a Response in Opposition to Plaintiff's Motion for Summary Judgment on Defendants' Counterclaim (ECF No. 55). Defendants did not file a Rule 56(d) Affidavit. Hr'g Tr. 14:24-15:15, July 2, 2013, ECF No. 70. Plaintiff filed a Reply (ECF No. 60). Defendants filed a Surreply (ECF No. 61). Plaintiff filed a Response in Opposition to Defendants' Surreply (ECF No. 62).

On July 2, 2013, the Court held a hearing regarding Plaintiff's motions. During the hearing, Defendants represented to the Court that by responding to Plaintiff's motions for summary judgment and not including a Rule 56(d) Affidavit, they had declined further discovery and instead wished to proceed to the merits of the motions, based on their submissions and the evidence before the Court. Hr'g Tr. 16:11-17:16, July 2, 2013 (representing to the Court, "We oppose on the merits.").[4]

Following the hearing, at the Court's recommendation the parties met with a Magistrate Judge to conduct a settlement conference but were unable to reach an agreement. Plaintiff's motions are thus now ripe for disposition.

III. APPLICABLE LEGAL STANDARDS

Summary judgment is appropriate if there are no genuine disputes as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). "A motion for summary judgment will not be defeated by the mere existence' of some disputed facts, but will be denied when there is a genuine issue of material fact." Am. Eagle Outfitters v. Lyle & Scott Ltd. , 584 F.3d 575, 581 (3d Cir. 2009) (quoting Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 247-48 (1986)). A fact is "material" if proof of its existence or nonexistence might affect the outcome of the litigation, and a dispute is "genuine" if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson , 477 U.S. at 248.

In undertaking this analysis, the court views the facts in the light most favorable to the non-moving party. "After making all reasonable inferences in the nonmoving party's favor, there is a genuine issue of material fact if a reasonable jury could find for the nonmoving party." Pignataro v. Port Auth. of N.Y. & N.J. , 593 F.3d 265, 268 (3d Cir. 2010) (citing Reliance Ins. Co. v. Moessner , 121 F.3d 895, 900 (3d Cir. 1997)). While the moving party bears the initial burden of showing the absence of a genuine issue of material fact, meeting this obligation shifts the burden to the non-moving party who must "set forth specific facts showing that there is a genuine issue for trial." Anderson , 477 U.S. at 250. At this stage in the proceedings, a party may not decline to produce evidentiary support and simply rest on generalized denials or averments in the pleadings. Rather, the non-moving party must point to particular evidence of record that would be admissible at trial in support of its argument that a genuine issue of material fact exists. See Jones v. United Parcel Serv. , 214 F.3d 402, 407 (3d Cir. 2000) (citing Celotex Corp. v. Catrett , 477 U.S. 317, 324 (1986)).

IV. PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT ON PLAINTIFF'S FIRST AMENDED COMPLAINT

To prevail on its motion for summary judgment as to the claims alleged in its Complaint, Plaintiff must demonstrate the following: (1) that valid written contracts existed between the parties and the terms thereto; and if so, (2) whether Defendants breached their duty to pay under the contracts, and (3) resultant damages, taking into consideration any set-off provided Defendants substantiate the basis for such a set-off. The Court will address each issue in turn.

A. No Genuine Issue of Material Fact Exists as to the Validity or Terms of the Parties' Contracts

In sum, Plaintiff points to evidence of record- including the eighty-six contracts, themselves, a record custodian's affidavit, and accounting statements-to support its contention that the parties entered into valid contracts for the advertising services at issue.[5] Defendants argue that these contracts are not valid because several are unsigned. Additionally, Defendants argue that any contracts that were signed were entered into solely with AIS, and not with its officers or owners. Lastly, Defendants argue that the terms on the reverse side constitute a separate, unsigned contract, and thus are not included in the parties' agreements. However, as the evidence of record belies these arguments, Defendants fail to raise genuine issues of material fact as to the existence and terms of the parties' contracts.

1. Contract Formation: Eighty-Six Valid Contracts Exist

Regarding AIS as a party to the contracts at issue, Defendants admit that AIS signed fifty-one of the eighty-six contracts. Defs.' Br. in Support of Resp. to Pl.'s Mot. Summ. J. on Pl.'s First Am. Compl. 9, ECF No. 54. As to the remaining thirty-five contracts that Defendants allege are "unsigned, " Plaintiff has asserted-and supported by way of a record custodian's affidavit-that where a customer enters multiple contracts on the same day, standard industry practice allows for the customer to bind himself by signing only the last page of a paginated contract. Pl.'s Mot. Summ. J. on Pl.'s First Am. Compl. Ex. F, Coleman Aff. 4.

Defendants offer no evidence to rebut this industry custom. Nor do they claim that they did not understand this to be the custom when signing the last page of paginated contracts. Moreover, Defendants rendered payments on these contracts until May 2011-including the allegedly "unsigned" paginated contracts-totaling $405, 672.05.

As to Halperin's and Attoun's personal liability, although the parties agree that AIS was always the customer, the signature line of the contracts expressly states: "Authorized Signature Individually and for the Customer (Read Paragraph 15 on the reverse hereof)." Thus, as the Court stated during a previous hearing, "[c]oncerning the argument that the defendants Halperin and Attoun are not individually liable, the Court notes the actual language of the contract which indicates in clear and unambiguous terms that the contract is being entered by the authorized [party signing] individually and for the company." Hr.'g Tr. 13:21-14:1, Nov. 7, 2011, ECF No. 56 (noting also that contracts at issue are business contracts and not consumer contracts, thus vitiating contract-of-adhesion concerns). Accordingly, the Court finds that Defendants fail to raise a ...


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