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AEP Energy, Inc. v. Vemulapalli

Court of Appeals of Ohio, Second District, Montgomery

January 12, 2018

AEP ENERGY, INC. Plaintiff-Appellee
SASIKALA VEMULAPALLI, et al. Defendant-Appellant

         Civil Appeal from Common Pleas Court T.C. NO. 2016-CV-1123

          ELIZABETH L. MOYO, Atty. Reg. No. 0081051 and ALLEN T. CARTER, Atty. Reg. No. 0085393, Porter Wright Morris & Arthur, LLP, Attorneys for Plaintiff-Appellee.

          CHRISTOPHER J. PAGAN, Atty. Reg. No. 0062751, Attorney for Defendants-Appellants.


          DONOVAN, J.

         {¶ 1} This matter is before the Court on the May 3, 2017 Notice of Appeal of Sasikala Vemulapalli, and Moraine Inn, LLC. (together, "Defendants"). Defendants appeal from the April 5, 2017 decision of the trial court overruling their Civ.R. 60(B) motion for relief from judgment. Defendants filed the motion for relief after the trial court granted default judgment in favor of AEP Energy, Inc. ("AEP") in the amount of $66, 931.26. We hereby affirm the judgment of the trial court.

         {¶ 2} AEP filed a complaint against Vemulapalli and 2455 Dryden LLC on February 29, 2016. The complaint provides that AEP provided retail electric supply and related services to Vemulapalli, who owned and operated the Moraine Inn & Suites, located at 2455 Dryden Road, and that 2455 Dryden LLC owned the real property where the Inn is located. According to the complaint, Vemulapalli's manager signed a written contract for the services in August 2014, pursuant to which AEP agreed to provide, and Vemulapalli agreed to pay for, electric supply. A copy of the August 21, 2014 contract is attached to the complaint, and it identifies Vemulapalli as "Customer and is signed by "A. Taylor, " who is identified as "Manager." The complaint provides that copies of AEP's pertinent electronic billing and payment data are also attached.

         {¶ 3} The complaint provides that "under the terms of the Agreement, 'Later payments shall incur interest charges at a rate of interest equal to a per annum rate of eighteen percent (18%) or the maximum allowed under applicable law, whichever is less. * * * Customer shall be liable for all costs incurred by AEP Energy, including attorneys' fees, for collections on accounts greater than thirty (30) calendar days past due.' " AEP alleged that Vemulapalli terminated the agreement in August 2015, 24 months prior to the end of its term. According to the complaint, AEP sent Vemulapalli a termination statement, which "sets forth the early termination fees, comprised of AEP Energy's lost margins and termination costs, calculated pursuant to Section X(A) of the Agreement." A copy of the termination statement is attached to the complaint. The complaint provides that as of February 6, 2016, the unpaid balance of $44, 051.49 is due and owing, "exclusive of additional late payment interest after such date and costs of collection, including but not limited to attorneys' fees and costs."

         {¶ 4} On April 20, 2016, Vemulapalli and 2455 Dryden LLC filed a motion to dismiss, pursuant to Civ.R. 12(B)(6), asserting in part that AEP's "claims for breach of contract and related claims cannot lie due to the operation of the statute of frauds, " that AEP "cannot state a claim for relief sounding in quasi contract when a contract exists, " and that AEP "has failed to name indispensable parties to this action pursuant to Civ.R. 12(B)(7), " namely Manager Amber Taylor.

         {¶ 5} On April 29, 2016, AEP filed an amended complaint, adding Moraine Inn, LLC, as a party and asserting that "Moraine Inn, LLC operates Moraine Inn & Suites." According to the amended complaint, "Moraine Inn, LLC, through its owner and operator Vemulapalli and through its manager Amber Taylor, had knowledge of the terms of the agreement between Vemulapalli and AEP Energy, and accepted and paid for Electric Supply under the Agreement."

         {¶ 6} On May 25, 2016, the trial court overruled in part and granted in part the motion to dismiss. The court noted that "because the Agreement is in writing, the time requirement set forth in the Statute of Frauds does not apply." The court noted that while AEP failed to name Moraine Inn LLC in its original complaint, AEP added Moraine Inn LLC as a party in its amended complaint. The court noted that both "parties agree that Amber Taylor, the individual who signed the Agreement, was the manager of Moraine Inn & Suites and "therefore, the Court finds that she likely had the authority to sign documents" on Moraine Inn, LLC's behalf. The court noted that "there is no evidence currently before the Court to establish that Ms. Taylor was not authorized to sign the Agreement, as manager of [Moraine Inn & Suites]. Therefore, the Court finds Plaintiffs arguments with respect to the Statute of Frauds to be unpersuasive." The court further found that, "because Plaintiff has raised a claim relating to the breach of a written contract, its claim for quantum meruit must be dismissed." Regarding Appellant's assertion that AEP failed to name indispensable parties, the court concluded that because Taylor managed Moraine Inn and Suites, "and possibly acting on its behalf when she signed the Agreement, the Court finds that [AEP] sufficiently remedied this aspect of Defendant's Motion to Dismiss by naming" Moraine Inn LLC.

         {¶ 7} On June 2, 2016, AEP filed a motion for reconsideration of the May 25, 2016 decision, asserting that because AEP "timely amended its complaint as a matter of course, the Court should not have addressed the merits of Defendants' Motion to Dismiss." AEP asserted that a "12(B) motion * * * is not the appropriate stage at which to limit a party's pursuit of alternative theories." Finally, AEP asserted that it "did not bring a contract claim" against 2455 Dryden, LLC, so the Court's decision had the effect of dismissing that Defendant.

         {¶ 8} On June 15, 2016, Defendants filed a motion for additional time to answer the amended complaint, with a "proposed Answer attached.

         {¶ 9} On June 20, 2016, the trial court overruled the motion to reconsider, noting that the "parties are entitled to raise alternative claims, " and further noting that "the parties to the present action agree that a written contract exists." The court noted that "all of Plaintiff's claims are based upon the written contract at issue, and Plaintiff did not argue or demonstrate that its claim for quantum meruit was based upon a separate transaction, outside of the written contract between the parties." According to the court, the "fact that [AEP] drafted its Amended Complaint in a way that may require the dismissal of Defendant 2455 Dryden, LLC is not sufficient grounds for reconsideration of the Court's original ruling. Therefore, the May 25, 2016 Decision shall stand."

         {¶ 10} On June 20, 2016, the court issued an "Entry Granting Motion for Additional Time to Answer Plaintiffs Amended Complaint, " giving Defendants until June 23, 2016 to file an Answer. On June 28, 2016, the court issued a "Notice (Default), " noting that Appellants were "in default for answer or appearance." The Notice provides that failure to respond within 14 days "may result in the administrative dismissal of this action." On the same day Defendants filed an answer, along with a "Motion Deeming Answer Filed." On July 8, 2016, the court issued an entry deeming the answer timely filed.

         {¶ 11} On July 12, 2016, the court scheduled a pretrial scheduling conference for July 29, 2016, and on August 4, 2016 it issued a final pretrial order. On August 26, 2016, AEP moved the court for an extension of the summary judgment deadline from September 2, 2016 to October 3, 2016, noting that discovery was served on Defendants on August 3, 2016, with responses due on August 31, 2016. AEP asserted that their "ability to prepare for the September 2, 2016 deadline has been hampered by Defendants' multiple requests to extend their Answer deadline." The court granted the motion on September 1, 2016, extending the summary judgment deadline until October 4, 2016.

         {¶ 12} On September 20, 2016, a "Motion of Plaintiff AEP Energy, Inc. for Status Conference Regarding Discovery Impasse and for Appropriate Sanctions" was filed. The motion provides that Defendants:

1. Refused to work with AEP Energy's counsel to schedule Defendants' depositions;
2. Refused to appear at properly noticed depositions;
3. Missed the deadline to respond and not otherwise provided AEP Energy with so much as partial responses to AEP Energy's requests for production and interrogatories; and
4. Served only unsigned responses to AEP Energy's requests for admissions.

         Attached to the motion is the Affidavit of Allen T. Carter, counsel for AEP, AEP's discovery requests to Defendants, and email correspondence between counsels for the parties.

         {¶ 13} The court ordered a telephone status conference on September 26, 2016. On that date, counsel for Defendants filed a "Motion to Withdraw as Counsel and Motion to Continue Deadlines." The court scheduled a hearing on the motion for October 3, 2016.

         {¶ 14} On September 30, 2016, AEP filed a motion to compel discovery and for an order deeming as admitted the matters contained in AEP's requests for admissions. Attached is the affidavit of Allen T. Carter.

         {¶ 15} On October 11, 2016, the court issued a "Proposed Entry and Order that provides:

(1) Defendants' counsels' Motion to Withdraw is GRANTED. Defendants have until November 3, 2016, for new counsel to enter an appearance on the record in this case.
(2) Plaintiffs Motion to Compel is GRANTED. Defendants have until October 17, 2016 to serve responses, verified by each party and signed by counsel or the party to whom the requests are directed to Plaintiffs interrogatories and document requests. Defendants must appear for the depositions properly noticed to take place on October 20, 2016, or on a date that is otherwise agreeable to ...

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