CAG Food Services, LLC v. Shaver Foods, LLC

CourtDistrict Court, N.D. Georgia
DecidedMarch 17, 2021
Docket1:18-cv-02753
StatusUnknown

This text of CAG Food Services, LLC v. Shaver Foods, LLC (CAG Food Services, LLC v. Shaver Foods, LLC) is published on Counsel Stack Legal Research, covering District Court, N.D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
CAG Food Services, LLC v. Shaver Foods, LLC, (N.D. Ga. 2021).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION

CAG FOOD SERVICES, LLC, f/k/a CORRECTIONAL ADVISOR’S GROUP, LLC, Plaintiff, Civil Action No. v. 1:18-cv-02753-SDG SHAVER FOODS, LLC, Defendant.

OPINION AND ORDER This matter is before the Court on Defendant Shaver Foods, LLC’s motions to strike Count I of Plaintiff CAG Food Services, LLC’s Amended Complaint [ECF 102] and for summary judgment [ECF 107], and Plaintiff CAG Food Services, LLC’s motion for leave to file surreply [ECF 129]. After careful consideration of the parties’ briefing, and with the benefit of oral argument, the Court GRANTS Defendant’s motion for summary judgment, DENIES Plaintiff’s motion for leave to file a surreply, and DENIES as moot Defendant’s motion to strike. I. BACKGROUND A. Undisputed Facts The following facts are undisputed. Defendant Shaver Foods, LLC (Shaver) is a low-cost, institutional food distributor servicer that provides food to customers, including correctional facilities, schools, healthcare providers, senior feeders, distributors, and manufactures.1 In 2007, Shaver and Plaintiff CAG Food Services, LLC (CAG) entered into a supply agreement through which Shaver would supply CAG customers with food services.2 In July 2008, the parties amended the agreement to make Shaver the primary food supplier to CAG’s

clients in exchange for CAG receiving a five percent commission “of the total amount paid” to Shaver for each future invoice of a client managed by CAG.3 The agreement allowed the parties to create separate supply agreements with different

terms for individual clients “based on various circumstances to be determined as they arise.”4 The agreement also prohibited Shaver from soliciting CAG clients or entertaining solicitations from CAG clients.5 On May 2, 2018, Ashley White, the President and CEO of Shaver, sent an

email to CAG purporting to terminate the amended supply agreement “effective immediately.”6 Rich Adams, the President and CEO of CAG, responded on behalf of CAG, asserting that the amended supply agreement was “rock solid and

1 ECF 116, ¶ 2. 2 ECF 121, at 1; ECF 116, ¶ 2. 3 ECF 116, ¶ 4. 4 Id. ¶ 5. 5 Id. ¶ 6. 6 ECF 121, at 2; ECF 116, ¶ 9. binding” and a “long term contract,” which included Shaver sales to customers “past, present, and future.”7 B. Procedural History On May 16, 2018, CAG filed suit in Superior Court of Cobb County,

Georgia.8 Shaver timely removed.9 CAG initially sought a preliminary injunction, claiming that Shaver was in breach of the restrictive covenants of the amended agreement.10 The Court denied CAG’s motion for a preliminary injunction.11 CAG subsequently amended its Complaint, asserting claims for (I) Breach of Contract

(Past Commission); (II) Breach of Contract (April 2018 Commissions); (III) Breach of Contract (Commissions for May 2018 Forward); (IV) Unjust Enrichment (in the Alternative): (V) Tortious Interference with Contractual and Business Relations;

7 ECF 116, ¶ 10; ECF 107-6. 8 ECF 1-1. 9 ECF 1. 10 ECF 116, ¶¶ 11–13. 11 ECF 20. (VI) Unfair Competition Under the Lanham Act; (VII) Breach of the Covenant of Good Faith and Fair Dealing;12 and (VIII) Attorney’s Fees and Expenses.13 Shaver moved to dismiss Counts I, III, IV, V, VI, and VIII of the Amended Complaint, arguing, as relevant here, that (1) Count I, alleging breach of contract

for past commissions, should be dismissed because CAG was bound by its sworn admissions in its initial complaint and in moving for preliminary injunction that Shaver made monthly commission payments to CAG in accordance with the

agreement;14 (2) the contract terms entitling CAG to future commissions were unenforceable;15 and (3) CAG cannot assert a claim for unjust enrichment when the parties were governed by a valid contract.16 The Court granted the motion in part, dismissing Counts III and V.17

12 Due to a typographical error, the claim for breach of the covenant of good faith and fair dealing is labeled as “Count VIII.” The Court will refer to it as Count VII, the order in which it is listed in the Amended Complaint, to avoid confusion. ECF 22, at 16. 13 ECF 22, ¶¶ 28–73. 14 ECF 24-1, at 10–11. 15 Id. at 11–15. 16 ECF 29, at 12. 17 ECF 31. Following the Court’s order, Shaver moved for reconsideration “to amplify points that Shaver made only briefly (and without robust supporting legal authority) in its Motion to Dismiss” with respect to the Court’s ruling on CAG’s unjust enrichment claim.18 Specifically, Shaver sought to emphasize Georgia case

law, which, according to Shaver, show that a party cannot enforce an illegal restrictive covenant or contravene Georgia public policy favoring fair trade through a claim for unjust enrichment.19 The Court denied the motion because

Shaver had not met the legal standard for reconsideration.20 CAG moved for partial summary judgment on Count II, for April 2018 commissions owed but not paid by Shaver.21 The Court granted CAG’s motion as to liability, but found that an issue of material fact existed as to what amount

Shaver owed CAG for the April 2018 commissions.22 Shaver has a pending motion for summary judgment as to the counts remaining in this case,23 which include Count I for breach of contract for past commissions, Count VI for unjust

18 ECF 40, at 6. 19 ECF 32-1. 20 ECF 67. 21 ECF 68. 22 ECF 121. 23 ECF 107. enrichment, Count VII for breach of the covenant of good faith and fair dealing, and Count VIII for attorney’s fees and expenses,24 as well as a pending motion to strike Count I as a sanction for discovery abuses.25 The parties have briefed both motions.26

II. ANALYSIS On its motion for summary judgment, Shaver first asserts that a party cannot inhibit trade or enforce an otherwise unenforceable restrictive covenant through a claim for unjust enrichment. Shaver also argues that CAG’s unjust

enrichment claim fails because it is premised on client contracts that do not exist and because CAG cannot prove its damages. As to CAG’s breach of contract claims, Shaver argues that the entire amended supply agreement is void because

of the overbroad restrictive covenants and because CAG failed to present evidence in support of these claims.

24 The parties stipulated to the dismissal of Count VI, unfair competition under the Lanham Act. ECF 101. Shaver brought three counterclaims, one of which was voluntarily withdrawn, ECF 41, one of which was dismissed by the Court, ECF 88, and one of which the parties dismissed by stipulation. ECF 101. No counterclaims remain. 25 ECF 102. 26 ECF 102; ECF 104; ECF 106; ECF 107; ECF 108; ECF 115; ECF 116; ECF 119; ECF 128. A. Legal Standard Summary judgment is appropriate when “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). A fact is “material” only if it can affect the outcome of the

lawsuit under the governing legal principles. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A factual dispute is “genuine . . . if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id. A party seeking summary judgment has the burden of informing the district

court of the basis for its motion and identifying those portions of the record that demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If a movant meets its burden, the party opposing summary

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CAG Food Services, LLC v. Shaver Foods, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cag-food-services-llc-v-shaver-foods-llc-gand-2021.