Page Plus of Atlanta, Inc. v. Owl Wireless, LLC

602 F. App'x 232
CourtCourt of Appeals for the Sixth Circuit
DecidedFebruary 10, 2015
Docket14-3064
StatusUnpublished
Cited by5 cases

This text of 602 F. App'x 232 (Page Plus of Atlanta, Inc. v. Owl Wireless, LLC) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Page Plus of Atlanta, Inc. v. Owl Wireless, LLC, 602 F. App'x 232 (6th Cir. 2015).

Opinion

KETHLEDGE, Circuit Judge.

Page Plus distributed prepaid cellular phones and minutes for Owl Wireless. In 2008, Page Plus and Owl signed a distribution contract that set prices on those products and defined Page Plus’s distribution 'territory. Page Plus alleges it later assigned its rights under the contract to SNAP Prepaid. SNAP sued Owl in 2011, alleging that Owl had charged it prices in excess of those promised in the distribution contract. Owl responded with counterclaims against SNAP and Page Plus, alleging that one or both of them had sold to customers to which Owl had exclusive sales rights.

The district court eventually granted summary judgment sua sponte to Owl on ■ SNAP’s contract claim. SNAP now challenges that grant on both procedural and substantive grounds. SNAP and Page Plus also challenge the court’s interpretation of contract language relevant to Owl’s counterclaims — claims that Owl voluntarily dismissed. We affirm the judgment, and dismiss No. 14-3038 to the extent it raises issues relevant only to Owl’s counterclaims.

I.

Owl sells prepaid cell phones and minutes for those phones — either in the form of phone cards or electronic PIN numbers — to multiple distributors. In October 2008, Owl signed a two-year contract with the distributor Page Plus. The contract set prices on certain phones, phone cards, and PIN numbers; guaranteed Page Plus the best available prices on those products; *234 and required Owl to apply “price change[s]” on those products “to all of [its] other distributors[.]” The contract also required Page Plus to transfer the accounts for two of its largest customers— Blackstone and Budget — to Owl.

Shortly thereafter, Page Plus’s owner, Steve Harris, and its top executive, Michael Lizdas, formed SNAP, each taking an ownership share in the new company. What happened next is disputed: Lizdas and Harris say they had “multiple conversations” during which the men orally assigned Page Plus’s contract rights to SNAP. But Lizdas and Harris undisputedly never wrote down their agreement, or made a general announcement to their employees, or told Owl’s executives about the assignment — which allegedly took effect on January 1, 2009.

Within two months of that date, SNAP made its first of many sales to Blackstone. Several months later, SNAP began selling cellular minutes to Budget. These sales eventually totaled more than $22 million. Meanwhile, in September 2009, Owl increased the price charged to SNAP for phone cards from 77% of their face value to 78%. Owl’s other distributors that ■ bought phone cards at the 77% mark also saw a 1% increase. But Owl did not change the prices charged to some distributors paying more than 77%, thereby reducing SNAP’s pricing advantage over those distributors.

In 2010, Page Plus sued Owl for breach of contract. In a verified complaint, Page Plus (rather than SNAP) alleged that Owl had breached the contract by reducing the differential between the prices charged to Page Plus and those charged to other distributors. Owl answered that Page Plus had breached the contract by selling to Blackstone and Budget. More than a year into litigation, however, Page Plus apparently figured out that SNAP, rather than Page Plus, had made all of the purchases that were the basis of Page Plus’s breach of contract claim. Page Plus, therefore, moved for leave to add SNAP as a party to the case. The district court denied the motion, and in a stipulated order dismissed the complaint without prejudice.

Three weeks later, Page Plus and SNAP brought this lawsuit, which asserted the same claims Page Plus had asserted in the prior suit, but added SNAP as a party. Owl again asserted its counterclaims. For the first time, however, the plaintiffs alleged that Page Plus had assigned its contract to SNAP on January 1, 2009. SNAP therefore asserted the price-differential claim instead of Page Plus; and Owl alleged that one or both plaintiffs, not Page Plus alone, had breached the contract.

On cross-motions for summary judgment, the district court held that both sides had breached the contract: Owl by raising the prices charged to SNAP, and one or both plaintiffs by selling to Blackstone and Budget. But the court left the issue of damages for a jury to decide. Each side thereafter filed motions in li-mine to preclude the other from producing any evidence of damages. Specifically, Owl moved to exclude such evidence on the ground that SNAP had not become a party to the contract through a valid assignment. In August 2012, the court denied the motion-observing that it was “almost a summary judgment request.”

But the court soon revisited the alleged assignment. On September 14, the court requested supplemental briefing on the “legal significance of Page Plus’s alleged assignment to Snap[.]” On October 5, the court held a phone conference during which the court said that it would “determine whether the issue [i.e., whether Page Plus had assigned its contract rights to SNAP] is appropriate for trial.” The parties each “agreed the record [was] com- *235 píete” on whether a valid assignment had occurred. Five days after the conference, however, SNAP and Page Plus filed a declaration and financial records in an attempt to. shore up their allegation that Page Plus had assigned its contract rights to SNAP. The district court was unpersuaded, and thereafter sua sponte granted summary judgment to Owl on SNAP’s contract claim, holding that SNAP had not presented enough evidence to create a genuine dispute of fact as to whether Page Plus had assigned its contract rights to SNAP. Owl then voluntarily dismissed its counterclaims, but reserved the right to reassert the claims if SNAP obtained reversal of any of the court’s rulings.

Both sides then appealed. , We dismissed those appeals for lack of jurisdiction, because the conditional nature of Owl’s voluntary dismissal meant that the appeals were not from a “final decision[ ]” of the district court. See 28 U.S.C. § 1291. On remand, the parties stipulated to an order dismissing Owl’s counterclaims without prejudice. These appeals followed.

II.

A.

1.

SNAP . argues that the district court improperly granted summary judgment sua sponte, asserting that the district court “never gave notice that it planned to grant summary judgment^]” Appellant Br. 88. A district court may grant summary judgment sua sponte after “giving notice and a reasonable time to respond[.]” Fed.R.Civ.P. 56(f). To determine whether a court gave adequate notice, we ask whether the losing party knew “that [it] had to muster the necessary facts.to withstand summary judgment^]” Smith v. Perkins Bd. of Educ., 708 F.8d 821, 829 (6th Cir.2013) (citation omitted). We review a court’s compliance with the notice requirement for an abuse of discretion. Id. at 828.

Two events are relevant here. The first is Owl’s motion in limine. Despite its label, that motion — which asserted that Page Plus had not assigned its contract to SNAP — functioned as a motion for summary judgment.

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Cite This Page — Counsel Stack

Bluebook (online)
602 F. App'x 232, Counsel Stack Legal Research, https://law.counselstack.com/opinion/page-plus-of-atlanta-inc-v-owl-wireless-llc-ca6-2015.