United States District Court, N.D. Alabama, Southern Division
MEMORANDUM OPINION & ORDER
G. CORNELIUS, U.S. MAGISTRATE JUDGE
a dispute between two commercial printers, NTA Graphics
South, Inc., and Axiom Impressions, LLC. NTA Graphics
commenced the action by filing a complaint asserting various
state law claims against Axiom Impressions. Thereafter, Axiom
Impressions filed a counterclaim asserting various state law
claims against NTA Graphics. Federal subject matter
jurisdiction is premised on diversity of citizenship. (Doc.
13 at ¶¶ 1, 3; Doc. 16). Pending before the
undersigned are two motions for summary judgment filed by NTA
Graphics: one seeking judgment in its favor on certain of
Axiom Impressions' claims (Doc. 53) and one seeking
judgment in its favor on certain of its own claims (Doc. 55).
A hearing on the motions was held on July 23, 2019. For the
reasons discussed below, the first motion is due to be
granted in part and denied in part. The undersigned orally
denied the second motion in its entirety during the July 23,
2019 hearing and sets forth the reasons for so doing herein.
Graphics and Axiom Impressions print newspaper advertising
inserts and circulars. (Doc. 55 at p. 2). NTA Graphics'
printing facility is in Birmingham, Alabama. (Id.).
Axiom Impressions has printing facilities in Portland,
Tennessee and Liberty, Missouri. (Id.).
February 21, 2015, the roof of Axiom Impressions'
Portland facility collapsed, causing a fire that rendered the
facility and the four printing presses located inside
unusable. (Id.). On February 25, 2015, Matt Duffield
(Axiom Impressions' Chief Executive Officer) and Kevin
Hendrix (Axiom Impressions' General Manager and Chief
Operating Officer) met with Greg Klausing (NTA Graphics'
President) and Rodney Parker (NTA Graphics' Vice
President) to discuss whether NTA Graphics would be able to
print jobs for Axiom Impressions pending remediation of the
latter's Portland facility and repair of its equipment.
(Id.). At that time, the parties reached an oral
agreement, the duration of which they did not contemplate
would be equal to or in excess of one year. (Id.;
Doc. 65-2 at ¶ 8). The terms of that agreement and
representations allegedly made during the February 25, 2015
meeting form the basis of this action.
NTA Graphics' Performance
parties agree they contemplated NTA Graphics would print jobs
for one of Axiom Impressions' customers, AG Florida, on a
weekly basis and for other customers of Axiom Impressions
depending on capacity at Axiom Impressions' Liberty,
Missouri facility and NTA Graphics' Birmingham, Alabama
facility. (Doc. 53 at p. 7; Doc. 56-1 at ¶ 4; Doc. 65-2
at ¶ 7; Doc. 65-3 at pp. 74-75). Axiom Impressions
claims that during the February 25, 2015 meeting the parties
discussed the approximate number of hours required each week
to complete the AG Florida work, the schedule for that work,
and expectations for print quality. (Doc. 65-2 at ¶ 5).
According to Axiom Impressions, NTA Graphics represented it
had the capacity to undertake the AG Florida work, and Axiom
Impressions relied on this representation to the extent it
would not have entered into an agreement with NTA Graphics
absent such capacity. (Id. at ¶¶ 5-6).
Nonetheless, there were occasions when NTA Graphics did not
have enough labor to perform the AG Florida work, and Axiom
Impressions had to send employees from its Portland facility
to Birmingham, at its own expense, to help complete the work.
(Id. at ¶¶ 25-26).
the parties refer to as the “Penn Dutch error”
occurred when NTA Graphics included pages from a competing
grocer's advertisement within the Easter advertisement
for Penn Dutch, one of AG Florida's customers. (Doc. 65-2
at ¶¶ 27, 29). According to Axiom Impressions, this
caused “tremendous” confusion amongst Penn
Dutch's customers and came at a significant cost to Penn
Dutch. (Id. at ¶ 30). AG Florida seriously
considered ending its business relationship with Axiom
Impressions because of the Penn Dutch error. (Id. at
¶ 31). Axiom Impressions claims the Penn Dutch error
also came at a cost to Axiom Impressions, for two reasons.
First, AG Florida demanded Axiom Impressions provide a credit
for the error in the amount of approximately $24, 000, and
Axiom Impressions complied with the demand for fear of losing
AG Florida's business. (Id. at ¶ 31).
Second, while Axiom Impressions had been planning to present
AG Florida with a 5% price increase, it had to delay these
plans because of the Penn Dutch error. (Doc. 54-3 at p. 66;
Doc. 54-7 at pp. 20-21; Doc. 65-2 at ¶¶ 32-39; Doc.
65-18 at ¶¶ 3-6). Axiom Impressions did
successfully implement price increases for five of its other
customers in 2015 and 2016. (Doc. 65-2 at ¶¶
42-46). Moreover, when Axiom Impressions finally did present
a price increase to AG Florida on June 1, 2017, AG Florida
accepted it. (Id. at ¶¶ 38-39). AG Florida
accepted price increases on February 1, 2018, and May 1,
2018, as well. (Id. at ¶¶ 38-39).
Axiom Impressions' Performance
Impressions provided paper for 95% of the jobs NTA Graphics
printed on Axiom Impressions' behalf, the graphics for
the jobs, and instructions for printing the jobs. (Doc. 54-3
at p. 29; Doc. 65-2 at ¶¶ 20-21). Generally, paper
is the most expensive commodity used by a printer,
representing 40-50% of the cost of printing a job. (Doc. 65-2
at ¶ 22). By contrast, ink represents 4-5% of that cost.
(Id. at ¶ 23). Moreover, the parties agree they
contemplated Axiom Impressions would pay NTA Graphics for
jobs it printed. However, they disagree on the payment terms.
Impressions has submitted sworn testimony that for a given
job, it agreed to pay NTA Graphics a sum no greater than the
amount Axiom Impressions billed its customer, less paper and
freight provided by Axiom Impressions. (See, e.g.,
Doc. 65-2 at ¶ 4; Doc. 54-4 at 22). NTA Graphics has
submitted sworn testimony denying this was the parties'
agreement. (Doc. 69-1 at ¶ 10). While NTA Graphics
explains why it would not make business sense for it to have
agreed to the price term articulated by Axiom Impressions
(Doc. 53 at pp. 18-19), it does not propose an alternative
price term to which the parties agreed. Instead, NTA Graphics
essentially argues Axiom Impressions' conduct manifested
its assent to amounts invoiced by NTA Graphics.
Graphics regularly printed jobs for Axiom Impressions between
February 28, 2015, and September 12, 2015. (Doc. 55 at p. 3).
NTA Graphics submitted invoices totaling $309, 885.96 to
Axiom Impressions between April 2015, and either August or
September 2015. (Doc. 56-1 at ¶¶ 6-7; Doc. 65-2 at
¶¶ 12-13; Doc. 69-1 at ¶ 4). Axiom Impressions
paid these invoices in full. (Doc. 56-1 at ¶¶ 6-7;
Doc. 65-2 at ¶ 12; Doc. 69-1 at ¶ 4). However, Axiom
Impressions claims these payments do not indicate it had no
objection to the amounts invoiced but, rather, merely that
the discrepancies between the invoices and the corresponding
invoices Axiom submitted to its customers were minimal and
capable of resolution when it performed a final
reconciliation at the conclusion of the parties'
relationship. (Doc. 65-2 at ¶ 12).
Graphics submitted 88 or more invoices totaling $1, 304,
319.33 to Axiom Impressions between September or November
2015, and December 2015, for work performed during the course
of the parties' business relationship. (Doc. 56-1 at
¶¶ 6, 8; Doc. 65-2 at ¶ 13; Doc. 69-1 at
¶ 5). NTA Graphics concedes the invoices were
late and claims this was because it was trying to keep up
with the “torrent” of print jobs sent to it by
Axiom Impressions. (Doc. 53 at p. 12; Doc. 68 at p. 4).
Impressions made the notation “OK to pay” or
“OK per KH” on a number of the invoices after
receiving them. (Doc. 59-1; Doc. 60-1; Doc. 61-1; Doc. 62-1).
Hendrix testified he did not personally make the notation
“OK per KH” on the invoices and that neither that
nor any other mark or notation indicates the invoices were
approved for payment. (Doc. 65-2 at ¶ 11). Rather,
according to Hendrix, he noticed on receiving the invoices
that the amounts NTA Graphics billed to Axiom Impressions
were significantly different than the amounts Axiom
Impressions billed its customers for the corresponding work.
(Doc. 65-2 at ¶ 14). Hendrix testified he informed
Parker that Hendrix needed to reconcile the invoices and this
would take time given the volume of the invoices and time
period they covered. (Id.). Moreover, according to
Hendrix, fall is the busy season for printers, which
prevented him from devoting his full attention to the
invoices at that time. (Id. at ¶ 15). Hendirx
claims to have maintained regular communication with Parker
during January, February, and March 2016, regarding the need
to reconcile NTA Graphics' invoices to Axiom Impressions
with Axiom Impressions' invoices to its customers.
(Id. at ¶ 16).
Graphics denies it had any communication with Axiom
Impressions regarding invoicing discrepancies before March
14, 2016, when Hendrix sent an e-mail to Parker and Klausing,
stating he planned to travel to NTA Graphics' Birmingham
facility within the next two weeks “to go over
invoicing differences.” (Doc. 56-1 at ¶ 6; Doc.
56-4 at 14; Doc. 69-1 at ¶ 5). NTA Graphics
characterizes its e-mail exchanges with Axiom Impressions
before March 14, 2016, either as indicating the latter would
pay the former in full (Doc. 69-1 at ¶ 5), or as at
least failing to object to the amounts invoiced. For example,
on January 29, 2016, Klausing sent an e-mail to Duffield and
Hendrix, stating he was extremely nervous about the sum Axiom
Impressions owed NTA Graphics and needed to know when he
could expect to receive payment. (Doc. 56-1 at ¶ 10).
Klausing testified he never received a response to that
e-mail. (Id.). On February 10, 2016, Klausing sent
another e-mail to Duffield and Hendrix, stating he was
entitled to know when NTA Graphics would receive payment on
the outstanding invoices. (Id.). Klausing testified
he never received a response to that e-mail, either.
3, 2016, NTA Graphics received a wire transfer from Axiom
Impressions in the amount of $749, 005.82, together with a
spreadsheet “reconciling” the invoices Axiom
Impressions submitted to its customers for jobs printed by
NTA Graphics with the invoices NTA Graphics submitted to
Axiom Impressions for those jobs. (Id. at ¶
11). NTA Graphics claims it is still owed $555, 313.51
(together with interest at the rate of 18%) by Axiom
Impressions (id. at ¶¶ 13-14), while Axiom
Impressions disputes some portion of the balance owed (Doc.
56-4 at p. 28; Doc. 65-2 at ¶ 18).
Graphics asserts various state law claims against Axiom
Impressions based on the latter's failure to pay the
outstanding invoices in full. (Doc. 13). Axiom Impressions
asserts counterclaims for breach of contract, based on NTA
Graphics' alleged failure to submit timely and accurate
invoices and the Penn Dutch error; breach of express and
implied warranty, based on the Penn Dutch error; fraud, based
on NTA Graphics' representations regarding its capacity
to perform the AG Florida work; negligence; and unjust
enrichment. (Doc. 30). In its pending defensive motion, NTA
Graphics seeks summary judgment in its favor on all but Axiom
Impressions' unjust enrichment counterclaim. (Doc. 53).
In its pending offensive motion, NTA Graphics seeks summary
judgment in its favor on only its claims for open account and
account stated. (Doc. 55). The claims on which NTA Graphics
seeks judgment are addressed below, with the exception of
Axiom Impressions' negligence claim, which Axiom
Impressions concedes. (Doc. 65 at p. 8 n.1).
Standard of Review
Rule 56 of the Federal Rules of Civil Procedure, “[t]he
[district] court shall grant 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); see also Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986); Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). The
party seeking summary judgment bears the initial burden of
informing the district court of the basis for its motion and
identifying those portions of the record the party believes
demonstrate the absence of a genuine dispute as to a material
fact. Celotex Corp., 477 U.S. at 323. If the moving
party carries its initial burden, the non-movant must go
beyond the pleadings and come forward with evidence showing
there is a genuine dispute as to a material fact for trial.
Id. at 324.
substantive law identifies which facts are material and which
are irrelevant. Anderson, 477 U.S. at
248. A dispute is genuine if the evidence is
such that a reasonable jury could return a verdict for the
non-movant. Id. at 248. If the evidence is merely
colorable or not significantly probative, summary judgment is
appropriate. Id. at 249-50 (internal citations
omitted). All reasonable doubts about the facts should be
resolved in favor of the non-movant, and all justifiable
inferences should be drawn in the non-movant's favor.
Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115
(11th Cir. 1993).