Opinion
CIVIL ACTION NO. 1:18-cv-063-AT
2023-07-25
PORTER PIZZA BOX OF FLORIDA, INC., a Florida corporation, f/k/a Star Pizza Box, Plaintiff/Counterclaim Defendant, v. PRATT CORRUGATED HOLDINGS, INC., a Delaware corporation, Defendant/Counterclaim-Plaintiff, v. Halden Porter, Counterclaim-Defendant.
Alan Kaufman, Nelson Mullins Riley & Scarborough LLP, New York, NY, Christopher Shaun Polston, Richard B. North, Jr., Nelson Mullins Riley & Scarborough, LLP, Atlanta, GA, for Defendant/Counterclaim-Plaintiff. Adam Scott Rubenfield, David J. Hungeling, Hungeling Rubenfield Law, Atlanta, GA, for Plaintiff/Counterclaim Defendant.
Alan Kaufman, Nelson Mullins Riley & Scarborough LLP, New York, NY, Christopher Shaun Polston, Richard B. North, Jr., Nelson Mullins Riley & Scarborough, LLP, Atlanta, GA, for Defendant/Counterclaim-Plaintiff. Adam Scott Rubenfield, David J. Hungeling, Hungeling Rubenfield Law, Atlanta, GA, for Plaintiff/Counterclaim Defendant. ORDER Amy Totenberg, United States District Judge
Before the Court is Defendant and Counterclaim-Plaintiff Pratt Corrugated Holdings, Inc.'s Motion to Dismiss [Doc. 187] Porter Pizza Box of Florida, Inc.'s Refiled Complaint [Porter Pizza Box of Florida, Inc. v. Pratt Corrugated Holdings, Inc., 1:23-cv-1759-AT (N.D. Ga. 2023) (the "Renewal Action"), Doc. 1]. For the reasons discussed below, the Court GRANTS Pratt's Motion [Doc. 187], and DISMISSES Porter Pizza's Refiled Complaint [Renewal Action, Doc. 1] as untimely.
I. Background
Porter Pizza initiated this litigation in January 2018 by suing Pratt for breach of contract, based on Pratt's alleged failure to timely meet Porter Pizza's orders and pay $111,856 in rebates. (Compl., Doc. 1 ¶ 40). In January 2023, the Court held that Porter Pizza lacked standing to pursue its breach of contract claim against Pratt because Porter Pizza had assigned its right to receive the rebates under the Porter Pizza/Pratt contract to WestRock, the third-party entity that purchased Porter Pizza in 2017. (Doc. 156 at 11-14.) The Court thus found that Porter Pizza lacked a contractual right to the rebates when it initiated this litigation. See (Doc. 156 at 21); O.C.G.A. § 9-11-17(a) ("Every action shall be prosecuted in the name of the real party in interest.").
In an apparent attempt to remedy Porter Pizza's lack of standing, WestRock made a mid-litigation reassignment of the rebate rights back to Porter Pizza in a 2019 contract, which contained a retroactive effective date preceding the initiation of the original lawsuit. Nonetheless, the Court found that Porter Pizza did not cure its standing deficiency. While "Georgia law allows contracts to have retroactive effect between the parties to the contract, the retroactive date is not effective against third parties to the agreement." Minnifield v. Johnson & Freedman, LLC, 448 F. App'x 914, 916 (11th Cir. 2011); Outdoor Sys., Inc. v. Wood, 247 Ga.App. 287, 543 S.E.2d 414, 417 (2000) ("We find no case law to support the proposition that the retroactive date is effective against third parties to the agreement. And, such a rule would lead to anomalous results in this case."). Thus, the Court granted summary judgment to Pratt on Porter Pizza's breach of contract claim. (Docs. 156, 162.).
In April 2023, the Court granted Porter Pizza's unopposed motion for entry of partial final judgment regarding the dismissal of its breach of contract claim. (Doc. 179). Two days later, Porter Pizza filed a new lawsuit, raising the same breach of contract claim, which it characterizes as a renewal of its dismissed lawsuit under O.C.G.A. § 9-2-61. See (Refiled Compl., Renewal Action, Doc. 1 at 1-2). The Court consolidated the Renewal Action with this case, (Doc. 185), and Pratt moved to dismiss Porter Pizza's refiled claim, (Doc. 187). Pratt argues that Porter Pizza's claim is untimely under the applicable statute of limitations and that the Refiled Complaint fails to state a claim upon which relief can be granted under Fed. R. Civ. P. 12(b)(6).
Because the Court finds that Porter Pizza's breach of contract claim is untimely under the applicable statute of limitations, it need not otherwise address the sufficiency of the claim under Rule 12(b)(6). II. Legal Standard
Under Georgia law, a breach of contract claim is generally governed by a six-year statute of limitations. See O.C.G.A. § 9-3-24. But that provision does not apply to "actions for the breach of contracts for the sale of goods under Article 2 of Title 11." Id. "Rather, an action for breach of a contract for the sale of goods must be commenced within four years after the cause of action has accrued." Suzhou Allpro Certified Pub. Accts. Co. v. Sure Heat Mfg., Inc., No. 1:15-CV-03436-RWS, 2016 WL 11528968, at *3 (N.D. Ga. June 9, 2016) (citing O.C.G.A. § 11-2-725). "When the predominant element of a contract is the sale of goods, the contract is viewed as a sales contract and the UCC applies." S. Tank Equip. Co. v. Zartic, Inc., 221 Ga.App. 503, 471 S.E.2d 587, 588 (1996). As the Court previously noted, the contract at issue here is for the sale of goods—namely, pizza boxes—and is governed by the UCC. See (Doc. 191 at 2 n.1). Thus, Porter Pizza's breach of contract claim is governed by the four-year statute of limitations under O.C.G.A. § 11-2-725(1).
"State law concerning the applicable statute of limitations governs the outcome of this case because federal courts sitting in diversity must apply the controlling substantive law of the state. State statutes of limitations are substantive laws." Johnson v. Am. Meter Co., 412 F. Supp. 2d 1260, 1262-63 (N.D. Ga. 2004) (citations omitted).
If a timely claim is dismissed after the applicable statute of limitations has run, the claimant may nonetheless have the opportunity to once again pursue the claim in a renewal action. Georgia law provides that where a plaintiff files a lawsuit within the appliable statute of limitations period, and that action is later dismissed, the plaintiff may file a subsequent renewal action—even if the statute of limitations period has passed—if, among other things, the original action was not "void" and the requirements of the renewal statute are met. See Scott v. Muscogee Cnty., Ga., 949 F.2d 1122, 1123 (11th Cir. 1992) (per curiam); Hobbs v. Arthur, 264 Ga. 359, 444 S.E.2d 322, 323 (1994); Hancock v. Cape, 875 F.3d 1079, 1084 n.3 (11th Cir. 2017).
Since the contract at issue here was for the sale of goods and is governed by the UCC, Georgia's general renewal statute, O.C.G.A. § 9-2-61, would not apply. See O.C.G. § 9-2-61(b) ("This Code section shall not apply to contracts for the sale of goods covered by Article 2 of Title 11."). Instead, any renewal of Porter Pizza's breach of contract claim has to comply with the requirements of O.C.G.A. § 11-2-725(3). See Amin v. Mercedes-Benz USA, LLC, 301 F. Supp. 3d 1277, 1289 (N.D. Ga. 2018).
O.C.G.A. § 11-2-725(3) provides: "Where an action commenced within the time limited by subsection (1) of this Code section is so terminated as to leave available a remedy by another action for the same breach such other action may be commenced after the expiration of the time limited and within six months after the termination of the first action unless the termination resulted from voluntary discontinuance or from dismissal for failure or neglect to prosecute."
To the extent Porter Pizza claims that the Court's decision in Amin supports its position, it is mistaken. There, the question of whether void lawsuits could be renewed under O.C.G.A. § 11-2-725(3) was not raised or discussed. And the plaintiffs had been dismissed without prejudice from the original lawsuit for misjoinder, an amendable defect. See Amin, 301 F. Supp. 3d at 1282.
Because the right of renewal "is available only where the original action was a valid suit," a threshold question is whether there is a valid original action to renew or whether it is "void." See Mikell v. Certain Underwriters at Lloyds, London, 288 Ga.App. 430, 654 S.E.2d 227, 229 (2007) (citation omitted); see also Miller v. Georgia, 223 F. App'x 842, 846 (11th Cir. 2007) (per curiam) ("[T]he Georgia Supreme Court has held that, '[t]he privilege of dismissal and renewal does not apply to cases decided on their merits or to void cases . . . .' ") (quoting Hobbs, 444 S.E.2d at 323). Georgia courts have explained that "suits that cannot be corrected through amendment, like suits in which the plaintiff lacked standing, are 'void.' " Hancock, 875 F.3d at 1084 n.3 (citing Mikell, 654 S.E.2d at 229). Thus, where the original action was dismissed for lack of standing, the claimant has "no viable action to renew." Mikell, 654 S.E.2d at 229.
Federal Rule of Civil Procedure 12(b)(6) authorizes the Court to dismiss a complaint that fails to state a claim upon which relief can be granted. When ruling on a motion to dismiss, the Court must accept the complaint's factual allegations as true and must construe them in the light most favorable to the plaintiff. Alvarez v. Att'y Gen. for Fla., 679 F.3d 1257, 1261 (11th Cir. 2012).
For a renewal action to survive a motion to dismiss, the plaintiff must "show entitlement to file a renewal suit and that he followed the proper procedure to file a renewal suit." See Whitesell v. Georgia Power Co., 341 Ga.App. 279, 800 S.E.2d 370, 371 (2017); see also Deems v. Colgate-Palmolive Co., No. 4:19-CV-00105-HLM, 2019 WL 9633222, at *3 (N.D. Ga. Oct. 22, 2019) ("The plaintiff bears the burden of pleading . . . that his or her lawsuit falls within the safe harbor of the renewal statute."). Specifically, the renewal complaint must "show affirmatively that the former petition was not a void suit, that it is such a valid suit as may be renewed under [the renewal statute], that it is based upon substantially the same cause of action, and that it is not a renewal of a previous action which was dismissed on its merits so that the dismissal would act as a bar to the rebringing of the petition." Jester v. Emerson Climate Techs., Inc., 849 F. App'x 849, 853 (11th Cir. 2021) (per curiam) (quoting Whitesell, 800 S.E.2d at 371). "If the plaintiff fails to plead any of these preconditions to renewal, a court must dismiss the case." Deems, 2019 WL 9633222, at *3.
Where, as here, the renewal action is filed in the same court as the original action, the court considering a motion to dismiss may also "take judicial notice of the physical record from the original action in determining if the renewed action met the tests for renewal." Whitesell, 800 S.E.2d at 372 (citing Petkas v. Grizzard, 252 Ga. 104, 312 S.E.2d 107, 110 (1984)); see Deems, 2019 WL 9633222, at *3 n. 5.
III. Analysis
Porter Pizza does not dispute that its breach of contract claim is untimely under the four-year statute of limitations imposed by O.C.G.A. § 11-2-725(1). Instead, it argues that if the statute of limitations applies, its claim is timely under O.C.G.A. § 11-2-725(3), the renewal provision applicable to UCC breach of contract claims. Pratt disagrees. It asserts that because Porter Pizza's original suit was dismissed for lack of standing, it was void and cannot serve as the basis for a renewal action, which renders the refiled claim untimely under O.C.G.A. § 11-2-725(1).
On its face, the Refiled Complaint fails to "show affirmatively" that Porter Pizza's original action "was not a void suit" and "that it is such a valid suit as may be renewed" under the renewal statute. See Jester, 849 F. App'x at 853 (quoting Whitesell, 800 S.E.2d at 371). In the first sentence of the Refiled Complaint, Porter Pizza acknowledges that "[t]his is a renewal of an action dismissed for lack of standing." (Renewal Action, Doc. 1 at 1). Because "suits in which the plaintiff lacked standing[ ] are 'void,' " Hancock, 875 F.3d at 1084 n.3 (citing Mikell, 654 S.E.2d at 229), this statement is a concession that the original suit was void and ineligible for renewal under Georgia law.
Porter Pizza attempts to evade this fatal defect by arguing that the prohibition on renewing void actions should not apply because it is derived from caselaw concerning renewals under Georgia's general renewal statute, O.C.G.A. § 9-2-61. As support for why renewals under O.C.G.A. § 11-2-275 should be treated differently, Porter Pizza points to differences in the language of the statutes—namely, that the general renewal statute allows renewal actions when the party voluntarily dismissed the first suit, while the UCC renewal statute does not. This argument is unpersuasive.
To start, the bar on renewing void, invalid cases is not derived from, or tied to, the text of the general renewal statute. It is one of several extra-statutory, common-law rules that have governed Georgia renewal actions for more than a century. In Moss v. Keesler, 60 Ga. 44 (1878), the Georgia Supreme Court recounted the enactment and application of the early versions of the state's general renewal statute. It explained that the right of renewal only applied to cases dismissed on grounds "not affecting the real merits of the case" and where the plaintiff from the original action "brought another suit on the same cause of action." See id. at 47. The court also stated that the right of renewal did not apply where the original action was "a mere nullity," such as when the court did not have jurisdiction. See id. at 49.
Although none of these requirements were found in the text of the renewal statute, the court imposed them as necessary prerequisites to pursuing a renewal action. Today, Georgia courts continue to require renewal actions to satisfy these extra-statutory criteria, with the bar on renewing void, invalid actions directly traceable to the early prohibition on renewing claims constituting "a mere nullity." See Jester, 849 F. App'x at 853 (quoting Whitesell, 800 S.E.2d at 371); see also Lamb v. Howard, 150 Ga. 12, 102 S.E. 436, 437-38 (1920) (citing Moss, 60 Ga. at 49) (noting that a suit constituting "a mere nullity . . . cannot be the foundation for the right of renewal" before holding that the lawsuit in question could not "be treated as void" and "was sufficiently valid" to be renewed) (internal quotation marks omitted).
Accordingly, to the extent that Porter Pizza is arguing that the rule against renewing void actions should not apply to its UCC breach of contract claim, it is arguing that the enactment of O.C.G.A. §§ 9-2-61(b) and 11-2-725(3) changed the common law governing the renewal of such claims. Under Georgia law:
All statutes are presumed to be enacted by the legislature with full knowledge of the existing condition of the law and with reference to it. They are therefore to be construed in connection and in harmony with the existing law, . . . and their meaning and effect is to be determined in connection, not only with the common law and the constitution, but also with reference to other statutes and the decisions of the courts.Avnet, Inc. v. Wyle Lab'ys, Inc., 263 Ga. 615, 437 S.E.2d 302, 305 (1993) (cleaned up). Ultimately, "[s]tatutes are not understood to effect a change in the common law beyond that which is clearly indicated by express terms or by necessary implication." Id. (quoting Sears v. Minchew, 212 Ga. 417, 93 S.E.2d 746, 748 (1956)).
Here, nothing in the text of O.C.G.A. §§ 9-2-61(b) and 11-2-725(3)—which have not substantively changed since they were enacted in 1962—indicates in express terms that the common-law bar on renewing void actions does not apply to renewals of UCC breach of contract claims. Nor is such a conclusion necessarily implicated by these statutes. To the contrary, O.C.G.A. § 11-2-725(4) states, "This Code section does not alter the law on tolling of the statute of limitations . . . ." And the accompanying commentary adds that "this Article does not purport to alter or modify in any respect the law on tolling of the Statute of Limitations as it now prevails in the various jurisdictions." Id. (UCC Comment).
See Ga. L. 1962, p. 429 ("Title 3, Section 808 of the Code of Georgia of 1933, Nonsuit or dismissal, is hereby amended by adding the following proviso at the end thereof: Provided this section shall not apply to contracts for the sale of goods covered by Title 109A, Chapter 2"); Code 1933, § 109A-2-725(3), enacted by Ga. L. 1962, p. 156, § 1 ("Where an action commenced within the time limited by subsection (1) is so terminated as to leave available a remedy by another action for the same breach such other action may be commenced after the expiration of the time limited and within six months after the termination of the first action unless the termination resulted from voluntary discontinuance or from dismissal for failure or neglect to prosecute.").
This provision has also not substantively changed since it was enacted in 1962. See Code 1933, § 109A-2-725(4), enacted by Ga. L. 1962, p. 156, § 1 ("This section does not alter the law on tolling of the statute of limitations . . . .").
At the time O.C.G.A § 11-2-725(4) was enacted, it was well understood that the right of renewal "tolls" the statute of limitations to allow plaintiffs to renew their original action. See U.S. Cas. Co. v. Am. Oil Co., 104 Ga.App. 209, 121 S.E.2d 328, 330 (1961); Clark v. Newsome, 180 Ga. 97, 178 S.E. 386, 389 (1935). By cautioning that O.C.G.A § 11-2-725 should not be understood to "alter the law on tolling of the statute of limitations," O.C.G.A § 11-2-725(4) and the related commentary indicate that the enactment of the UCC renewal statute should not be understood to alter Georgia renewal law beyond what is clearly found in the statute's text. Because O.C.G.A § 11-2-725(3) does not state that Georgia's common-law bar on renewing void lawsuits no longer applies to UCC breach of contract claims, the Court will not impose such a rule.
* * *
In short, while O.C.G.A. §§ 9-2-61(b) and 11-2-725(3) changed which Georgia statute governs the renewal of UCC breach of contract claims, they did not—by their express terms or by necessary implication—exempt such claims from Georgia's common-law bar on renewing void lawsuits. Thus, renewal under O.C.G.A. § 11-2-725(3) "is available only where the original action was a valid suit." See Mikell, 654 S.E.2d at 229 (citation omitted). And where a UCC breach of contract claim "is dismissed for a defect that is nonamendable, there is no valid suit to be renewed." See id. Here, because Porter Pizza concedes that its original action was dismissed for lack of standing—a nonamendable defect—it is void and cannot be renewed under the UCC renewal statute. See Hancock, 875 F.3d at 1084 n.3 (citing Mikell, 654 S.E.2d at 229). And since the parties do not dispute that the Renewal Action was filed outside of the applicable statute of limitations, Porter Pizza's claim must be dismissed as untimely.
IV. Conclusion
For the foregoing reasons, the Court GRANTS Pratt's Motion [Doc. 187] and DISMISSES the Refiled Complaint [Renewal Action, Doc. 1] as untimely.
IT IS SO ORDERED this 25th day of July, 2023.