United States District Court, W.D. North Carolina, Charlotte Division
C. Mullen, United States District Judge.
matter is before the Court upon Defendant's Motion to
Dismiss this declaratory judgment action pursuant to Rule
12(b)(6) of the Federal Rules of Civil Procedure. The motion
has been fully briefed and is ripe for disposition.
Inc., f/k/a TrustHouse Services Group, Inc.
(“Elior”), is a food services company based in
Charlotte that provides food to correctional facilities
throughout the US. (Compl. ¶¶ 7, 14). CAG Food
Services, LLC (“CAG”), is a food services
supplier based in Florida. (Id. at ¶¶ 8,
16). Shaver Foods, LLC (“Shaver”), is a food
services supplier based in Arkansas. (Id. at
¶¶ 18-26). From the beginning of its operation, CAG
contracted with Shaver to “receive CAG customer orders
on behalf of CAG, fulfill those orders, and directly bill
CAG's customer [sic].” (Def.'s Br., Ex. A., at
¶ 11). Shaver would deliver the products, collect
money from the clients, and pay CAG a commission for the
sale. (Id. at ¶ 12).
September 1, 2011, Elior contracted with “CAG and its
CAG Shaver Foods Operations” to make CAG and Shaver the
“primary supplier of grocery products for Elior's
clients.” (Compl. ¶ 16). The contract was for one
year, with automatic yearly renewals unless a party to the
contract terminated it in writing. (Id. at ¶
17). All notices were to be sent to Shaver's
headquarters. (Id. at ¶ 18). Throughout
performance of the contract, Elior “was invoiced by,
and paid Shaver directly.” (Id. at ¶ 20).
Shaver would then supply and deliver products to Elior.
(Id. at ¶ 21).
2018, CAG and Shaver terminated their relationship.
(Id. at ¶ 27). CAG informed Elior that Shaver
“would no longer be fulfilling orders for Elior on
behalf of CAG, ” but that “CAG wished to continue
its contractual relationship with Elior.” (Def.'s
Br., Ex. A., at ¶ 32). Elior thereafter informed CAG
that CAG would “no longer receive any correspondence
regarding Elior and Shaver.” (Compl. ¶
31). CAG informed Elior that Elior “do[es] not have a
contract with Shaver Foods, only CAG Food Services.”
(Def.'s Br., Ex. A., at ¶ 34). Thereafter,
“Elior refused to continue to use CAG as its primary
supplier . . . in breach of the [contract].”
(Id. at ¶ 36).
December 2018 through January 2019, the parties exchanged
several letters discussing the status of their contractual
relationship. Elior maintained that it never had a
contractual relationship with CAG. CAG threatened litigation
over Elior's alleged breach if a resolution could not be
found. Eventually, on January 30, CAG informed Elior that
they would be proceeding with litigation. However, roughly an
hour before, Elior filed the instant action seeking a
judgment declaring that it is not obligated to use CAG as its
primary supplier. CAG filed its breach of contract claim in
federal district court in the Northern District of Georgia on
February 14. CAG now moves to dismiss the instant action.
have discretion to decline to exercise jurisdiction over
declaratory judgment actions. See 28 U.S.C. §
2201(a) (“[A]ny court . . . may declare the
rights of other legal relations of any interested party
seeking such declaration.”) (emphasis added). See
also Wilton v. Seven Falls Co., 515 U.S. 277, 288 (1995)
(“In the declaratory judgment context, the normal
principle that federal courts should adjudicate claims within
their jurisdiction yields to considerations of practicality
and wise judicial administration.”). The Fourth Circuit
has stated that district courts may decline adjudication of
declaratory judgment actions when they have “good
reason” to do so. Volvo Const. Equip. N. Am., Inc.
v. CLM Equip. Co., Inc., 386 F.3d 581, 594 (4th Cir.
2004) (quotations omitted). Courts are only “obliged to
rule on the merits of a declaratory judgment action when
declaratory relief ‘will serve a useful purpose in
clarifying and settling the legal relations in issue,'
and ‘will terminate and afford relief from the
uncertainty, insecurity, and controversy giving rise to the
proceeding.'” Id. at 594 (quoting
Aetna Cas. & Sur. Co. v. Quarles, 92 F.2d 321,
325 (4th Cir. 1937)).
judgment actions are generally inappropriate in disputes
involving only past conduct. See, e.g., Davison
v. Plowman, 247 F.Supp.3d 767, 782 (E.D. Va. 2017),
aff'd, 715 Fed.Appx. 298 (4th Cir. 2018)
(“Declaratory relief, however, is reserved for forward
looking actions.”) (quotations omitted); Gallant v.
Deutsche Bank Nat. Tr. Co., 766 F.Supp.2d 714, 719 (W.D.
Va. 2011) (“[D]eclaratory judgments are . . .
unavailable in situations where . . . claims and rights
asserted have fully matured, and the alleged wrongs have
already been suffered.”) (quotations omitted).
asserts that a declaratory judgment action is improper
because there is no future relationship between the parties
that could yield damages because the breach of contract
claims are fully matured. Elior argues that CAG has not
entered into any stipulations denying any future damages from
the purported breach and makes no affirmative claim that the
parties are no longer in a contractual relationship.
CAG's complaint in the Georgia action, however, it
specifically describes the contractual term as ending August
31, 2018. (Def.'s Br., Ex. A, ¶ 45). Additionally,
it only requests damages “for [Elior's] breach of
the [a]greement for July and August, 2018.”
(Id. at p. 10). To clear up any additional
ambiguity, CAG has now “stipulate[d] that the Agreement
between it and [Elior] terminated on August 31, 2018.”
(Def.'s Reply, at p. 2).
“courts have repeatedly recognized that [a] declaratory
judgment serves no useful purpose when it seeks only to
adjudicate an already-existing breach of contract claim,
” the Court will dismiss this action. Metra Indus.,
Inc. v. Rivanna Water & Sewer Auth., No.
3:12-CV-00049, 2014 WL 652253, at *2 (W.D. Va. Feb. 19, 2014)
(quotations and citations ...