International Telecommunications Exchange Corp. v. MCI Telecommunications Corp.

Beasley, Presiding Judge. Appellee MCI Telecommunications Corporation (MCI) sells long-distance telephone services to appellant International Telecommunications Exchange Corporation (INTEX) which in turn resells such services to providers such as Telnet Communications, Inc. (Telnet). In this case, INTEX filed a complaint against Telnet in the State Court of DeKalb County for breach of a contract between INTEX and Telnet. INTEX seeks damages from Telnet, based on Telnet’s failure to pay for approximately $276,000 in long-distance services provided by INTEX to Telnet on the MCI network. Telnet answered and filed a counterclaim against INTEX on grounds that INTEX had breached the parties’ contract by cancelling it because of INTEX’s termination of a contract between INTEX and MCI. In its counterclaim, Telnet claims that as a result of INTEX’s breach of contract, Telnet suffered damages consisting of lost revenue and profits because it lost numerous customers and had to cover its obligations to remaining customers by securing replacement long-distance services at greater expense. INTEX thereafter filed a third-party complaint against MCI under OCGA § 9-11-14, alleging that any failure by INTEX to fulfill its obligations to Telnet was caused by MCI’s failure to fulfill its obligations to INTEX. INTEX sought to be indemnified by MCI for any damages it sustains as a result of Telnet’s counterclaim. MCI answered and moved to dismiss the third-party complaint under the abatement statute, OCGA § 9-2-44 (a), as well as OCGA § 9-2-5 (a), in that INTEX had made the identical claim against MCI as a counterclaim in a prior action by MCI against INTEX then pending in the State Court of Fulton County. In INTEX’s counterclaim in MCI’s action against it, INTEX sought “direct and consequential damages” in an unspecified amount as a result of MCI’s damaging INTEX’s relationships with its customers by failing to take the steps necessary to ensure that INTEX customers were “on-line.” The DeKalb State Court granted MCI’s motion to dismiss IN-TEX’s third-party complaint, finding that the claims asserted involve [417] the same issues and arise out of the same transaction as the claims asserted in the Fulton State Court action. We granted INTEX’s application for interlocutory appeal. “No plaintiff may prosecute two actions in the courts at the same time for the same cause of action and against the same party. ... If two such actions are commenced at different times, the pendency of the former shall be a good defense to the latter.” OCGA § 9-2-5 (a), supra. “[T]he pendency of a former action for the same cause of action between the same parties in the same or any other court having jurisdiction shall be a good cause of abatement.” OCGA § 9-2-44 (a), supra. Whenever a pending suit for the same cause of action has been pled, abatement is required as a matter of law. Cale v. Cale, 160 Ga. App. 434, 436 (287 SE2d 362) (1981). INTEX is prosecuting two actions against MCI. One, the Fulton counterclaim, is a direct action for damages based upon INTEX’s loss of customers as a result of MCI’s breach of contract. The other, the DeKalb third-party complaint, is a secondary action for indemnification based upon Telnet’s loss of customers as a result of INTEX’s breach of contract. The question is whether the Fulton counterclaim and the DeKalb third-party complaint are the same cause of action. Both instances present issues of liability and damages. If, in the Fulton action, MCI is adjudged not liable for breach of its contract with INTEX, it could not be held liable to INTEX in the DeKalb action. Thus, there is a common issue of liability in each action. If, however, MCI is adjudged liable to INTEX for breach of contract in the Fulton action, MCI would not be foreclosed from maintaining in the DeKalb action that it is not liable for damages sustained by Telnet. MCI could argue that such damages are too remote. Thus, additional liability issues may be raised in the DeKalb action. Compare Schoen v. Home Fed. Sav. &c. Assn. of Atlanta, 154 Ga. App. 68 (267 SE2d 466) (1980), where the issues in two actions were identical. Additionally, the issue of damages in each action is different, in that the loss of customers by INTEX and the loss by Telnet constitute two different sets of events occurring between different parties and at different times. See Poole v. Estfan, 206 Ga. App. 510, 511 (2) (426 SE2d 61) (1992); Burns v. Brickle, 106 Ga. App. 150 (126 SE2d 633) (1962); compare Ellis v. Kite, 107 Ga. App. 237 (129 SE2d 547) (1963); Jones v. Rich’s, Inc., 81 Ga. App. 841 (60 SE2d 402) (1950). In fact, INTEX’s claim against MCI for indemnification did not accrue and could not have been asserted until Telnet filed the instant suit against INTEX in the DeKalb State Court. See Ranger Constr. Co. v. Robertshaw Controls Co., 158 Ga. App. 179, 181-182 (279 SE2d 477) (1981). Although there are common issues in each action, the cause of action is not the same. In this situation, the DeKalb court does have the discretionary [418] power to stay proceedings with respect to the third-party complaint pending adjudication of the liability issue in the Fulton action. See Bloomfield v. Liggett & Myers, Inc., 230 Ga. 484, 485 (198 SE2d 144) (1973); Commercial Union Ins. Co. v. Hoover Treated Wood Products, 202 Ga. App. 35, 37 (413 SE2d 217) (1991). However, a mandatory dismissal or abatement is not authorized. The court’s grant of MCI’s motion for a dismissal, rather than a stay, is reversed. Decided August 15, 1994. Meadows, Ichter & Trigg, Lauren S. Antonino, R. Wade Marion-neaux, Jr., for appellant. Sutherland, Asbill & Brennan, William D. Barwick, Patricia A. Gorham, Lisa C. Foster, for appellee. Judgment reversed. Andrews and Johnson, JJ., concur. Scott J. Forster, for appellant. T. Joseph Campbell, District Attorney, Rebecca B. Tierce, Assistant District Attorney, for appellee.