ADP Dealer Servs. Inc. v. Planet Automall, Inc.

ADP DEALER SERVICES, INC., Plaintiff,

v.PLANET AUTOMALL, INC., Defendant.

09 Civ. 0185 (ILG) (RER)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

Dated: January 12, 2012

MEMORANDUM AND ORDER

GLASSER, Senior United States 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.

I. BACKGROUND

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).¹ Automall, a New York corporation with its principal place of business in Long Island City, New York, is anautomobile dealership owned and operated by Kinney Galani ("Galani"). Compl. ¶ 2; Declaration of Gene Loop dated Apr. 15, 2010 ("Loop Decl.") ¶ 3 (Dkt. No. 33). Galani also owns and operates other automobile dealerships, including one called KG Suzuki located on the same premises as Automall in Long Island City. Loop Decl. ¶ 3.

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.² The SEM agreement obligated BZ, among other things, to create a search engine optimization campaign for Automall in exchange for a monthly payment of $3,000 for an initial term of 12 months. Pl.'s 56.1 Statement ¶¶ 15-17; Loop Decl. Ex. C, at 2 ¶ 2.³ Beginning in October 2007, BZ's search engine marketing campaign became operational. Pl.'s 56.1 Statement ¶ 19. ADP claims that the campaign became operational pursuant to the SEM agreement, id., while Automall claims, based on alleged discussions with Loop, that the search engine optimization services were included as part of the DMS agreement.Defendant's Rule 56.1 Statement ("Def.'s 56.1 Statement") ¶ 19 (Dkt. No. 41); Galani Decl. ¶ 7.

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. Id. Automall claims that the tour guide feature was to be included as part of the DMS agreement—again, based, among other things, on discussions with BZ employees. Def.'s 56.1 Statement ¶ 22; Galani Decl. ¶ 7.

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. Id. ¶ 13-14. Galani on behalf of Automall received monthly invoices through May 2008 which Automall failed to pay. Pl.'s 56.1 Statement ¶ 29.

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. ¶ 21.⁴ Automall filed its answer on December 15, 2008, asserting several affirmative defenses.⁵ By consent order dated January 16, 2009, the action was transferred to this district.

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).

II. DISCUSSION

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 topay 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.

A. Legal Standard

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.'" Fincher v. Depository Trust & Clearing Corp., 604 F.3d 712, 720 (2d Cir. 2010) (quoting Roe v. City of Waterbury, 542 F.3d 31, 35 (2d Cir. 2008)).

The moving party bears the burden of establishing the absence of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). When the burden of proof at trial would fall on the nonmoving party, it ordinarily is sufficient for the movant to point to a lack of evidence to go to the trier of fact on an essential element of the nonmovant's claim. Id. at 322-23. To defeat a motion for summary judgment, the non-moving party "'must do more than simply show that there is some metaphysical doubt as to the material facts,'" Brown v. Eli Lilly & Co., 654 F.3d 347, 358 (2d Cir. 2011) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986)), and cannot "'relyon conclusory allegations or unsubstantiated speculation.'" Id. (quoting Fed. Deposit Ins. Corp. v. Great Am. Ins. Co., 607 F.3d 288, 292 (2d Cir. 2010)).

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.'" Brod v. Omya, Inc., 653 F.3d 156, 164 (2d Cir. 2011) (quoting Williams v. R.H. Donnelley Corp., 368 F.3d 123, 126 (2d Cir. 2004)). "'Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge.'" Kaytor v. Elec. Boat Corp., 609 F.3d 537, 545 (2d Cir. 2010) (quoting Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150, 120 S. Ct. 2097, 147 L. Ed. 2d 105 (2000)).

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....