United States District Court, W.D. Washington, Seattle
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANT'S MOTION FOR PARTIAL SUMMARY JUDGMENT
L. ROBART UNITED STATES DISTRICT JUDGE
the court is Defendant Ericsson Inc.'s
(“Ericsson”) motion for partial summary judgment.
(See MPSJ (Dkt. # 165).) Specifically, Ericsson asks
the court on summary judgment to (1) cap Plaintiff United
Capital Funding Corp.'s (“United Capital”)
potential damages at $107, 298.84; (2) declare that United
Capital cannot recover prejudgment interest; and (3) declare
that United Capital cannot recover any attorney's fees.
(See Id. at 2.) United Capital opposes
Ericsson's motion. (See Resp. (Dkt. # 179).) The
court has considered the motion, all submissions in support
of and opposition to the motion, the relevant portions of the
record, and the applicable law. Being fully advised,
court GRANTS in part and DENIES in part Ericsson's
2012, Ericsson and non-party Prithvi Solutions, Inc.
(“Prithvi”) entered into a Master Services
Agreement whereby Prithvi agreed to (1) provide staffing
services to Ericsson, and then (2) issue invoices for those
services for Ericsson to pay. (6/18/15 McCombs Decl. (Dkt. #
55) ¶ 2, Ex. 1; 1/17/19 Pierce Decl. (Dkt. # 166) ¶
2, Ex. 1 (“UC Pretrial Statement”) ¶
3(f)-(h); 3/4/19 Baker Decl. (Dkt. # 181) ¶ 5, Ex. 3
(attaching Master Services Agreement).) Article 24 of the
Master Services Agreement states that the Agreement
“shall be construed and enforced in accordance with and
governed by the laws of the State of Texas, without regard to
its conflict of law provisions.” (3/4/19 Baker Decl.
¶ 5, Ex. 3 at 26.)
Capital is in the factoring business, which entails
contracting to purchase accounts receivable from a client.
(Compl. (Dkt. # 1) ¶ 7; UC Pretrial Statement ¶
3(a).) The client's invoices generally provide the terms
of the accounts receivable, and the client generally pays a
factoring fee to United Capital. (See Compl. ¶
7.) On September 27, 2010, Prithvi and United Capital entered
into a Factoring Agreement, under which United Capital
purchased Prithvi's invoices for services Prithvi
provided to Ericsson. (Id. ¶ 12; UC Pretrial
Statement ¶¶ 3(a)-(c), (i); 3/4/19 Baker Decl.
¶ 5, Ex. 1 (attaching the Factoring Agreement).) United
Capital states that between March 11, 2013, and May 29, 2014,
Ericsson paid $3, 418, 711.96 to United Capital in accordance
with Prithvi's assignment of its accounts receivable to
United Capital. (See 3/4/19 Baker Decl. ¶ 11.)
2013, former Third-Party Defendant Kyko Global, Inc.
(“Kyko”) obtained a judgment against Prithvi. (UC
Pretrial Statement ¶ 3(q).) On May 5, 2014, Kyko applied
to King County Superior Court for a writ of garnishment to be
issued to Ericsson. (Id. ¶ 3(r).) On May 6,
2014, Kyko served Ericsson with a writ of garnishment.
(Id. ¶ 3(s).) On May 12, 2014, Ericsson
answered the Writ of Garnishment stating that it was indebted
to Prithvi in the amount of $189, 640.84. (Id.
¶ 3(u).) On June 12, 2014, the King County Superior
Court entered judgment and ordered garnishee Ericsson to pay
Kyko $189, 640.84, which Ericsson did. (See Id.
¶¶ 3(x), (y).)
November 24, 2014, United Capital filed the present suit
against Ericsson. (See Compl. (Dkt. # 1).)
Specifically, United Capital alleges that Ericsson owes
United Capital $184, 539.50, which sum represents the total
of 22 unpaid Prithvi invoices dated March 24, 2014, to May 2,
2014. (Id. ¶¶ 12-16.) United Capital's
complaint seeks “judgment in the amount of $184,
539.50, together with prejudgment interest, costs and as may
be allowed, reasonable attorney's fees.”
(Id. at 6; see also Id. ¶ 16
(“Ericsson owes United [Capital] the sum of $189,
539.50 plus prejudgment interest at the rate prescribed by
law.”); id. ¶ 18 (“To the extent
the substantive laws of the [s]tate of Texas may apply to
this claim, United [Capital] is entitled to be reimbursed for
all of its attorney's fees incurred pursuant to Tx. Civ.
Proc. & Rem. Statute 38.001.”).) In its response to
Ericsson's present motion, however, United Capital argues
that it is entitled to recover $189, 640.84, which is the sum
that Ericsson paid to Kyko in the garnishment proceeding and
approximately $5, 000.00 more than United Capital claimed in
its complaint. (Resp. at 6.)
denies that it owes $184, 539.50 to United Capital.
(See Am. Answer (Dkt. # 20) ¶ 15.) Ericsson
pleaded affirmative defenses, including that it had paid the
$189, 640.84 it owed to Prithvi via the garnishment
proceeding. (Id. ¶ 23 & Counterclaim ¶
6.) Ericsson also counterclaimed alleging that it had already
paid United Capital more than $3, 000, 000.00, including
overpayments while the writ of garnishment was pending.
(Id. Counterclaim ¶¶ 8-9.)
18, 2015, Ericsson moved for summary judgment on United
Capital's claim. (1st Ericsson MSJ (Dkt. # 52).) In
support of that motion, Ericsson filed two declarations from
employees calculating the amount that Ericsson paid to United
Capital. (See 6/18/15 McCombs Decl. (Dkt. # 55);
6/18/15 Sanchez Decl. (Dkt. # 54).) Ericsson provided
testimony that it paid $189, 640.84 in response to the writ
of garnishment, and then continued paying on the same
invoices after the garnishment because its accounting
department inadvertently failed to create a “payment
block” in its computer system for some of the invoices
that Ericsson paid through the garnishment. (6/18/15 McCombs
Decl. ¶ 6.) Ericsson further provided testimony and
evidence indicating that it paid $82, 342.00 to United
Capital's bank account following the May 5, 2014,
garnishment. (See id.) Accordingly, Ericsson argues
in its present motion that United Capital's maximum
possible recovery against Ericsson is $107, 298.84 ($189,
640.84, presently claimed by United Capital (see
Resp. at 6), minus $82, 342.00). (See MPSJ at 2.)
16, 2015, United Capital filed its own motion for summary
judgment seeking resolution of its claim and Ericsson's
counterclaim. (UC MSJ (Dkt. # 74).) In a supporting
declaration, United Capital's Chief Financial Officer
testified that Ericsson owed United Capital $182, 474.50 for
the 22 invoices listed in the complaint. (7/16/15 Baker Decl.
(Dkt. # 76) ¶ 25.) This is a different amount than the
$184, 539.50 listed in United Capital's complaint.
(Compare Id. with Compl. ¶¶ 12-16.) In its
response to Ericsson's present motion for partial summary
judgment, United Capital asserts that it is entitled to
recover the entire $189, 640.84 that Ericsson paid to Kyko.
(Resp. at 6.) However, United Capital also provides testimony
that it made an inadvertent “scriveners error” in
calculating the amount Ericsson allegedly owes and
subsequently determined the Ericsson owes United Capital a
total of $190, 566.30 for the 22 invoices listed in its
complaint. (Id. (citing 3/4/19 Baker Decl. ¶
32).) Thus, over the course of the litigation, United Capital
has asserted at least four different amounts that Ericsson
December 15, 2015, the court granted summary judgment in
favor of Ericsson on United Capital's claim as well as on
Ericsson's counterclaim. (12/15/15 SJ Order (Dkt. # 98).)
In so ruling, the court determined as a preliminary matter
that Washington law applies to this litigation:
[United Capital] argues that Texas law should apply to this
dispute because it was the choice of law in the contract
between Ericsson and Prithvi ..... However, this litigation
is only tangentially related to the contract between Ericsson
and Prithvi which was to be governed by Texas law and the UCC
..... Rather, this litigation pertains to [United
Capital's] attempt to attack a garnishment judgment from
King County Superior Court based on an assignment of rights
that occurred in Washington from a Washington resident .....
Accordingly, the Court applies Washington law and the UCC.
(Id. at 4 (docket citations omitted).)
Capital appealed. (See Not. of App. (Dkt. # 123).)
The Ninth Circuit reversed the district court's grant of
summary judgment to Ericsson but affirmed the ...