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Apex Digital, Inc. v. Sears, Roebuck & Co.

United States Court of Appeals, Seventh Circuit

November 20, 2013

APEX DIGITAL, INCORPORATED, Plaintiff-Appellant,
v.
SEARS, ROEBUCK & COMPANY, Defendant-Appellee.

Argued Sept. 10, 2013.

Page 963

Siobhan M. Murphy, Lewis Brisbois Bisgaard & Smith LLP, Chicago, IL, for Plaintiff-Appellant.

Mark E. Enright, Hal R. Morris, Arnstein & Lehr LLP, Chicago, IL, for Defendant-Appellee.

Before KANNE, WILLIAMS, and TINDER, Circuit Judges.

KANNE, Circuit Judge.

This suit was brought by Apex Digital, Incorporated, to collect money for goods they sold to Sears, Roebuck & Company. Apex alleged that Sears breached their contract by refusing to pay the total amount it owed to Apex for goods delivered. Sears argued that this action was barred by the four-year statute of limitations set forth in Section 2-725 of the Uniform Commercial Code (the " UCC" ). Both parties moved for summary judgment. The district court found that Apex failed to file suit within the requisite time period and granted Sears' motion for summary judgment. Apex filed this timely appeal. For the reasons set forth below, we affirm the decision of the district court.

I. BACKGROUND

A. The Universal Terms and Conditions

Apex and Sears entered into the Sears Roebuck & Co. Universal Terms and Conditions (the " UTC" ) agreement on September 12, 2003. The purpose of the agreement was to allow Sears, a retailer, to place orders for goods with Apex, a manufacturer of electronics.[1] The UTC covered all merchandise sold by Apex to Sears and " appl[ied] to, and is incorporated into, all other Vendor Agreements." The vendor agreements were to " contain the entire understanding of [Apex] and Sears with respect to the subject matter of such Vendor Agreements[.]" Furthermore, the UTC stated that the agreements " may not be supplemented or modified by course of dealing, course of performance, any oral communication between the parties, or any responses by [Apex], ... unless such response is in writing and executed or consented to in writing by Sears." According to the UTC, the vendor agreements and purchase orders constituted a single agreement between the parties.

B. Payment of Invoices

Following the delivery of goods, Apex sent electronic invoices to Sears. Though not explicitly written in the UTC, both parties' records reflect a " Net 60" payment term, meaning payment was due sixty days from the date of the invoice. The parties' actions also indicate that they were operating under this payment arrangement. Apex accounted for its invoices to be due sixty days after issuance of each invoice. Sears' Business Exchange sets forth the payment terms between Sears and Apex as " Net 60 Receipt of Goods."

Upon receipt of an invoice from Apex, Sears' accounts payable system confirmed the terms of the invoice and then paid Apex according to the " Net 60" payment term, though Sears did not always pay the

Page 964

full amount owed. Sears withheld money for expected returns and other deductions to which it believed that it would be entitled in the future. Deductions that were disputed by Apex were labeled " charge-back deductions" on Apex's Invoice Report. Apex ...


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