I. LEO GLASSER, District Judge.
Plaintiff ADP Dealers Services, Inc., ("ADP") brings this diversity action for breach of contract and unjust enrichment against defendant Planet Automall, Inc. ("Automall") in connection with three agreements the parties executed in 2007. Currently before the Court is ADP's motion for summary judgment on its breach of contract claim and Automall's affirmative defenses. For the reasons that follow, ADP's motion is hereby granted.
The facts of this action are relatively simple, and unless otherwise noted, are undisputed. ADP, a Delaware corporation with its principal place of business in Rhode Island, provides digital marketing, internet, and related services to automobile dealerships. Compl. dated Oct. 27, 2008 ¶ 1 (Dkt. No. 1).
On or about August 30, 2007, Galani executed on behalf of Automall a digital marketing services agreement ("DMS agreement") with BZ Results ("BZ"), one of ADP's subdivisions. Plaintiff's Rule 56.1 Statement ("Pl.'s 56.1 Statement") ¶ 1 (Dkt. No. 37); Declaration of Kinney Galani in Opposition to Summary Judgment dated June 14, 2010 ("Galani Decl.") ¶ 1 (Dkt. No. 42). The DMS agreement obligated BZ to, among other things, design a website for Automall in exchange for payment of $3,300.00 per month for a non-cancelable period of 36 months. Pl.'s 56.1 Statement ¶ 2; Loop Decl. Ex. A, at 10 ¶¶ 2(b), 3(b). Galani testified during his deposition, however, that it was his understanding that the agreement did not have a 36 month term but instead a "30-day out." Declaration of Michael S. Re dated Apr. 16, 2010 ("Re Decl.") Ex. F. (Galani Dep.), at 182 (Dkt. No. 35). After Galani approved BZ's design of the Automall website in mid-September 2007, it became operational and began receiving visitor traffic. Pl.'s 56.1 Statement ¶¶ 3-5. Although the DMS agreement was initially drafted for KG Suzuki, according to Gene Loop ("Loop"), one of BZ's sales executives, Galani eventually decided that he wanted a new website for Automall instead, and the unexecuted draft agreement between KG Suzuki and BZ ultimately became the agreement between Automall and BZ—the agreement that Galani executed. Loop Decl. ¶ 6. Galani claims that the DMS agreement was to provide for the creation of a joint website for both Automall and KG Suzuki and that Loop and Rick Friedman ("Friedman"), another BZ employee, represented as much during negotiations before the agreement's execution. Galani Decl. ¶ 5. Loop and Friedman deny making any such representation. Loop Decl. ¶ 9; Declaration of Rick Friedman dated Apr. 15, 2010 ("Friedman Decl.") ¶ 7 (Dkt. No. 32). They do acknowledge, however, that BZ eventually provided KG Suzuki with certain services as a professional courtesy, including a redesign of the KG Suzuki website that became operational on January 24, 2008. Loop Decl. ¶¶ 17-18, 20; Friedman Decl. ¶ 8.
Galani later executed on behalf of Automall a search engine marketing agreement ("SEM agreement") with BZ. Pl.'s 56.1 Statement ¶ 15; Loop Decl. Ex. C.
On or about October 3, 2007, Galani executed on behalf of Automall a third agreement with BZ—a "virtual salesperson" agreement ("VS agreement"). Pl.'s 56.1 Statement ¶ 22-23; Loop Decl. Ex. D. In exchange for monthly payments of $195, BZ agreed to equip Automall's website with a video tour guide feature that leads customers through the site. Loop Decl. Ex. D. The term of the agreement was to be coterminous with the term of the "Digital Marketing Agreement previously executed" by Automall— the DMS agreement.
BZ billed Automall for the services and products provided pursuant to each of the agreements. Declaration of Eric L. Pearson dated Apr. 15, 2010 ("Pearson Decl.") ¶ 13 (Dkt. No. 34). Billing and invoicing under the various agreements began on September 30, 2007 for the DMS agreement and on October 31, 2007 for the VS and SEM agreements.
After making a number of fruitless attempts to collect payment, ADP on October 27, 2008 filed suit in the U.S. District Court for the District of Rhode Island, asserting claims for breach of contract and unjust enrichment and seeking damages of $159,594.27, the amount due under the various agreements between BZ and Automall, along with interest, attorney's fees and costs. Compl. ¶¶ 13-19; Pearson Decl. ¶ 21.
ADP on April 16, 2010 filed its submissions in support of summary judgment on its breach of contract claim and Automall's affirmative defenses. Plaintiff's Memorandum of Law in Support of Summary Judgment dated Apr. 16, 2010 ("Pl.'s Mem.") (Dkt. No. 36). After being granted several extensions to do so, Automall on June 18, 2010 filed its opposition papers. Defendant's Memorandum of Law in Opposition to Plaintiff's Motion for Summary Judgment dated June 17, 2010 ("Def.'s Opp'n") (Dkt. No. 51). On July 28, 2010, ADP filed its reply. Reply Memorandum of Law in Further Support of Plaintiff's Motion for Summary Judgment dated July 28, 2010 (Dkt. No. 55).
ADP maintains that summary judgment on its breach of contract claim is appropriate because the language of the relevant agreements is clear and unambiguous and there is no dispute that (1) Galani executed the agreements on behalf of Automall; (2) ADP performed its obligations under the agreements; and (3) Automall refused to pay ADP for the services it received. Pl.'s Mem. at 3-5. ADP further argues that the parol evidence rule bars Automall's attempts to use Galani's statements concerning alleged pre-contractual discussions to vary the agreements' terms or to create issues of material fact that would preclude summary judgment. Pl.'s Mem. at 6. The Court turns to these contentions below.
Summary judgment is appropriate "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). "`An issue of fact is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. A fact is material if it might affect the outcome of the suit under the governing law.'"
The moving party bears the burden of establishing the absence of any genuine issue of material fact.
A court deciding a motion for summary judgment must "`construe the facts in the light most favorable to the non-moving party and must resolve all ambiguities and draw all reasonable inferences against the movant.'"
Moreover, in cases such as this one involving the interpretation of contractual terms, summary judgment is appropriate only if the language of the contract is plain and unambiguous, considered in light of the context and structure of the agreement as a whole.
Whether the Court applies New Jersey or Rhode Island law, the same principles of contract interpretation guide the construction of the agreements at issue in this case. The Court will first determine as a matter of law which category the agreements' terms fall into—clear or ambiguous.
If a court determines that contractual language is ambiguous, "New Jersey law permits this Court to consider extrinsic evidence `in determining the intent and meaning of the contract,'" but this evidence cannot be used "`to vary the [written] terms of the'" agreement.
Automall maintains that the agreements at issue in this case are ambiguous and therefore that summary judgment on ADP's breach of contract claims is inappropriate. Def.'s Opp'n at 3.
The DMS agreement names "Planet Automall" as the party contracting with BZ and, in exchange for BZ's services, obligates Automall for a non-cancelable term of 36 months beginning on the date of the agreement's acceptance, August 30, 2007, to make a "total monthly payment of $3,300.00." Loop Decl. Ex. A., at 10 ¶ 2, 3(b). The SEM agreement also names "Planet Automall" and provides that it "agrees to pay BZ the Total System Contract Price," a monthly payment of $3,000 over a term of 12 months. Loop Decl. Ex. C, at 1, 2. The VS agreement names "Planet Automall" as well and provides that for a monthly fee of $195, BZ will provide Automall with a "video tour guide" for its website. Loop Decl. Ex. D. It also provides that "BZ and Client [Automall] agree that the Term of this Agreement shall be co-terminus with the Term of the Client's existing Digital Marketing Agreement previously executed by Client [Automall]." Loop Decl. Ex. D. Accordingly, the VS agreement, like the DMS agreement—the digital marketing agreement previously executed by Automall—has a 36 month term. The key provisions of each of these agreements are not subject to more than one reasonable interpretation, and the Court therefore may not consider extrinsic evidence in interpreting them.
With respect to the DMS agreement, Automall, relying on statements in Galani's declaration concerning certain conversations he allegedly had with BZ representatives, argues that the agreement (1) was cancelable on 30 days notice to BZ; (2) applied to KG Suzuki in addition to Automall; (3) also encompassed the provisions of the SEM and VS agreements; (4) cost only $3,000 per month; and (5) did not commence until March 1, 2008. Def.'s Opp'n at 1-5. These contentions are belied by the plain and unambiguous language of the DMS Agreement, and any purported statements made by BZ representatives to Galani may not be used to rewrite the DMS agreement's terms. This is particularly true here because the DMS agreement contains a merger clause, Loop Decl. Ex. A, at 10 ¶ 10, further evidence that the agreement is integrated and constitutes the final and complete expression of Automall and BZ's agreement.
Automall's attempt to inject ambiguity into the SEM agreement also fails. Automall argues first that the SEM agreement never "commenced" because Automall never paid BZ pursuant to the agreement. Def.'s Opp'n at 3. Automall relies on the following provision of the SEM agreement in support of its position:
Loop Decl. Ex. C, at 2 (emphasis added). This contention is meritless. The "required payment" refers to fees for a "BZ Search Engine Marketing Micro-site" and for "BZ Search Monthly Service" in the Statement of Work section of the SEM Agreement—all of which BZ waived. Loop Decl. Ex. C, at 1. The required payment is not, as Automall contends, the $3,000 monthly fee provided for in the SEM agreement. Def.'s Opp'n at 4. Indeed, interpreting the agreement in this fashion would render superfluous paragraph 3 of the agreement which obligates Automall to pay $3,000 per month to BZ, over a term of 12 months, Loop Decl. Ex. C, at 1, 2. Moreover, although Automall, again relying on Galani's declaration, contends that the SEM agreement is "incomprehensible and unenforceable," Def.'s Opp'n at 3; Galani Decl. ¶ 23, Galani testified during his deposition that he read and understood the agreement before signing it:
Reply Declaration of Michael S. Re dated July 28, 2010 Ex. A (Galani Dep.), at 137-8.
Likewise, to the extent that Automall contends that the Court should consider extrinsic evidence of purported fraudulent misrepresentations by BZ personnel during negotiations with Galani, Def.'s Opp'n at 6, the Court finds this contention unpersuasive. While it is true, as Automall argues, that the introduction of extrinsic evidence to prove fraud in the inducement is a well-recognized exception to the parol evidence rule, Def.'s Opp'n at 7, "a party may not seek to contradict the express terms of a writing to avoid obligations he knowingly assumes."
That is precisely the situation presented here. The DMS agreement, like the agreements at issue in
Having concluded that the agreements at issue in the case are unambiguous and therefore that summary judgment on ADP's breach of contract claim is permissible, the Court next turns to whether ADP has established each of the elements of the claim. A breach of contract claim requires a plaintiff to show: (1) the existence of a valid contract; (2) a breach of that contract; and (3) resulting damage to the plaintiff.
ADP's motion for summary judgment with respect to Automall's affirmative defenses is granted as well, and these defenses are dismissed. Automall asserts a laundry list of defenses in its answer including: (1) failure to state a claim; (2) insufficiency of service of process; (3) waiver; (4) estoppel; (5) lack or failure of consideration; and (6) fraudulent inducement but, except for its fraudulent inducement defense, Automall has made no arguments in opposition to ADP's motion and has therefore abandoned these defenses.
Because the Court has concluded that ADP is entitled to recover on its breach of contract claim, it need not reach ADP's unjust enrichment claim as a plaintiff seeking compensation for the same injury under different legal theories is only entitled to one recovery.
For all of the foregoing reasons, ADP's motion for summary judgment is hereby GRANTED, and Automall's affirmative defenses are hereby DISMISSED. This case is referred to Magistrate Judge Reyes for an inquest to determine the appropriate damage award.
SO ORDERED.