Blueshift, Inc. v. Advanced Computing Technologies, Inc.

616 S.E.2d 816, 273 Ga. App. 802, 2005 Fulton County D. Rep. 1928, 2005 Ga. App. LEXIS 619
CourtCourt of Appeals of Georgia
DecidedJune 21, 2005
DocketA05A0261
StatusPublished
Cited by10 cases

This text of 616 S.E.2d 816 (Blueshift, Inc. v. Advanced Computing Technologies, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Blueshift, Inc. v. Advanced Computing Technologies, Inc., 616 S.E.2d 816, 273 Ga. App. 802, 2005 Fulton County D. Rep. 1928, 2005 Ga. App. LEXIS 619 (Ga. Ct. App. 2005).

Opinion

SMITH, Presiding Judge.

In this appeal, we must decide whether the trial court correctly interpreted a contract executed by Blueshift, Inc. and Advanced Computing Technologies, Inc. (“ACT”). Because we conclude that the trial court interpreted the contract incorrectly, we reverse the trial court’s judgment in favor of ACT.

Blueshift, a company whose primary business is software development, contracted with its client, E-Panacea.com, to custom build specific software modules. Blueshift lacked certain programming skills, and it located a programmer through a search on the internet. The programmer was employed by ACT, which provides computer programming, training, and problem solving, and places its employee programmers with other companies temporarily on a contractual basis. Blueshift and ACT eventually executed a contract providing for the consultant’s services.

When E-Panacea.com stopped paying Blueshift because it did not receive necessary further funding for the project, Blueshift stopped paying ACT for the services of its consultant. ACT demanded payment, and when it was not forthcoming ACT brought this suit against Blueshift. Blueshift answered and counterclaimed, and ultimately a bench trial was held. After hearing the evidence, the trial court ruled from the bench in favor of ACT, awarding it $20,583.13 principal, $9,970 prejudgment interest at the rate of 18 percent, and attorney fees in the amount of $5,828. Judgment in those amounts was entered, and Blueshift appeals.

The dispute between Blueshift and ACT regarding payment arises from the parties’ differing interpretations of the payment provisions in the contract they executed. The difference in the parties’ understanding of those provisions centers on the interplay between portions of clause 12 of the contract and paragraph 9 of the addendum to the contract, consisting of a one-page “Statement of Work.” The pertinent provisions of the two contract terms are as follows:

12: PAYMENT FOR SERVICES.
12.2. To the extent that Blueshift’s client refuses or is otherwise not obligated to pay Blueshift for the services provided by the supplier hereunder, then in such event(s), Blueshift shall not be obligated to pay any such amounts to the Supplier.
*803 Nothing specified in any other part of this document, any other document or in any relevant Statement of Work shall alter the terms set forth in this clause 12.2. In the event of any conflict between this and other such documents, this clause 12.2 shall prevail.
12.3. Supplier will submit invoices to Blueshift every fifteen days, showing the description of services, expenses and the amount due.
12.4. Payment shall be made by Blueshift to the supplier on the last day of the following month on which the invoice is dated or within five days of receiving payment for the relevant statement of work from its client [,] whichever is later. . . .
12.6. The relevant Statement of Work may specify payment terms or may alter some of these payment terms. But Clause 12.2 shall not be altered by any Statement of Work and shall prevail in the event of any conflict between these terms and terms specified in any other document, including the relevant Statement of Work.

The Statement of Work appended to the agreement provides in paragraph 9 as follows:

9. Schedule of payment: As per terms in Clause 12 of the agreement, Blueshift will be invoiced every calendar month. Invoices will be submitted along with client-approved timesheets. Blueshift will settle the invoices net 30 days on receipt of invoice.

ACT submitted the testimony of its president, Joann Taylor, who stated that she insisted on the addendum because she understood that Clause 12 of the agreement meant that ACT would not be paid if Blueshift’s client did not pay Blueshift and she was dissatisfied with that clause. She testified that she informed Donald Sequeira, Blueshift’s senior vice president, who was negotiating the contract terms with her, that Clause 12 of the agreement “is not something that we ever do in a standard contract,” and that she would not agree to those payment terms. She informed Sequeira that ACT’s “terms are 30 days from invoice date regardless of whether or not you get paid by your client; that I don’t ever agree to do terms that are not those terms. And ... that the only way that we would agree to doing this is if in the actual statement of work if it’s stated in there, that we *804 would just say 30 days from invoice date.” According to Taylor, Sequeira replied “that’s no problem.” Taylor testified that at her request, therefore, the Statement of Work was appended to the standard agreement reciting the negotiated specifics that applied to this particular agreement. In paragraph 9 of the Statement of Work, the payment term was 30 days after invoice “[bjecause that’s the only way we do business.” It was Taylor’s understanding that ACT would be paid even if Blueshift was not paid by its client.

Blueshift’s president, Valmiginathan Raghunathan testified that Blueshift was completely satisfied with the work ACT’s consultant performed for its client and that ACT billed him for the work performed. It was his understanding, however, that “Blueshift’s obligation to pay ACT [was] contingent upon Blueshift getting paid by the client.”

After hearing evidence and argument of counsel, the trial court announced from the bench that

The court finds that Exhibit A [the Statement of Work] does, in fact, control in this matter, that it clearly changes Clause 12 of the contract. Even if it didn’t, it appears to the Court that Blueshift, Inc. has been paid more than — from their client than they’ve been invoiced by [ACT], even though it wasn’t paid in full. That work was performed for other clients and that even if the contract wasn’t controlling in this matter, that quantum meruit clearly would allow recovery for [ACT]. Therefore, I find in ... favor of the plaintiff in the amount of $20,583.13 plus $9,970.00 in interest at 18 percent, for a total of $30,553.13. And I also find for attorney’s fees in the amount of $5,828.

We conclude that the trial court’s analysis is faulty in several respects.

1. First, the trial court erred in its conclusion that quantum meruit would permit ACT to recover “even if the contract wasn’t controlling.” It is well established that “[r] ecovery in quantum meruit is not authorized when, as here, the claim is based on an express contract.” 1 (Citations and footnote omitted.) Kwickie/Flash Foods v. Lakeside Petroleum, 246 Ga. App. 729, 730 (541 SE2d 699) (2000). Because ACT must rely on the contract to support its claim for recovery, quantum meruit is not applicable.

*805 2. Second, three steps govern the process of contract interpretation. The trial court must first decide whether the contract language is ambiguous. If it is, the trial court then applies the applicable rules of contract construction in OCGA § 13-2-2.

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Bluebook (online)
616 S.E.2d 816, 273 Ga. App. 802, 2005 Fulton County D. Rep. 1928, 2005 Ga. App. LEXIS 619, Counsel Stack Legal Research, https://law.counselstack.com/opinion/blueshift-inc-v-advanced-computing-technologies-inc-gactapp-2005.