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Bayer Clothing Group, Inc. v. Sears

August 7, 2008

BAYER CLOTHING GROUP, INC., PLAINTIFF,
v.
SEARS, ROEBUCK & CO., DEFENDANT.



The opinion of the court was delivered by: Samuel Der-Yeghiayan United States District Court Judge

MEMORANDUM OPINION

SAMUEL DER-YEGHIAYAN, District Judge

This matter is before the court on Defendant Sears, Roebuck & Co.'s ("Sears") motion for summary judgment and Sears' motion to strike. For the reasons stated below, we grant the motion for summary judgment in its entirety and we deny the motion to strike as moot.

BACKGROUND

Plaintiff Bayer Clothing Group, Inc. ("Bayer") alleges that it was a private-label clothing designer and manufacturer that sold clothes to retailers. In November 2003, Bayer and Sears allegedly discussed a deal under which Bayer would design and manufacture pants and suit coats for Sears' line referred to as the "Structured Suited Separates Program" ("Program"). In January 2004, Sears allegedly notified Bayer that it had been selected to supply the clothing for the Program and the parties entered into an Agreement in regard to the Program ("Agreement"). The Program was allegedly scheduled to begin in 155 stores in the Fall of 2004, and in 300 additional stores in the Spring of 2005. On January 14, 2004, Sears allegedly orally gave Bayer an order for initial quantities of clothing for the Program and asked Bayer to start buying materials to manufacture the clothing. On February 19, 2004, Sears allegedly signed an order for Bayer to make 73,425 units for the Fall of 2004, which were scheduled to ship from August 2004 to November 2004. On May 17, 2004, Sears allegedly sent Bayer a writing reducing the order to 67,123 units.

On June 9, 2004, Sears placed an order for its Spring of 2005 launch of the Program. Sears allegedly signed a written order for an additional 57,459 units to be shipped from December 2004 to May 2005. On August 18, 2004, Sears also allegedly ordered 34,133 units and on October 14, 2004, Sears allegedly ordered an additional 25,273 units. Bayer contends that at that point Sears had ordered a total of 183,988 units and owed Bayer $7,914,572.

According to Bayer, several months after Bayer started shipping to Sears, Sears notified Bayer that there had been a high rate of returns and exchanges of the Program clothing. Sears allegedly believed that the clothing did not conform to the specifications required by Sears, and Sears suspended planned shipments and told Bayer to stop manufacturing clothing for the Program. Sears allegedly agreed to conduct a formal audit to determine whether the garments shipped by Bayer conformed to Sears' specifications. Bayer claims that in March 2005, an audit was conducted and Bayer's clothing passed the audit. Bayer contends that despite the audit results, Sears never fully lifted the suspension of the Program. According to Bayer, as a result, Bayer did not manufacture 69,063 units that had been ordered, leaving Bayer with significant amounts of material that it purchased specifically for the Program. Bayer also claims that Sears did not accept shipment of all the manufactured garments for the Program. Bayer brought the instant action and includes in its complaint a breach of contract claim. Sears now moves for summary judgment and moves to strike certain materials and responses.

LEGAL STANDARD

Summary judgment is appropriate when the record, viewed in the light most favorable to the non-moving party, reveals that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). In seeking a grant of summary judgment, the moving party must identify "those portions of 'the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)(quoting Fed. R. Civ. P. 56(c)). This initial burden may be satisfied by presenting specific evidence on a particular issue or by pointing out "an absence of evidence to support the non-moving party's case." Id. at 325. Once the movant has met this burden, the non-moving party cannot simply rest on the allegations in the pleadings, but, "by affidavits or as otherwise provided for in [Rule 56], must set forth specific facts showing that there is a genuine issue for trial." Fed. R. Civ. P. 56(e). A "genuine issue" in the context of a motion for summary judgment is not simply a "metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Rather, a genuine issue of material fact exists when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Insolia v. Philip Morris, Inc., 216 F.3d 596, 599 (7th Cir. 2000). The court must consider the record as a whole, in a light most favorable to the non-moving party, and draw all reasonable inferences that favor the non-moving party. Anderson, 477 U.S. at 255; Bay v. Cassens Transport Co., 212 F.3d 969, 972 (7th Cir. 2000).

DISCUSSION

Sears argues that it is entitled to summary judgment because Sears merely gave Bayer estimates or forecasts rather than orders and that under the terms of the Agreement, Bayer agreed to assume any risk for relying upon such "estimates or forecasts."

I. Whether Sears Gave Bayer Orders

Sears argues that it did not breach the Agreement since the alleged orders that Bayer contends Sears failed to honor were only "estimates or forecasts." It is undisputed that the Agreement provides that "[a]ny estimates or forecasts of Sears

[sic] future needs for Merchandise which may be provided to Seller by Sears are for long range planning purposes only and shall not in any way represent a commitment of Sears." (R SF Par. 8). The Agreement further provides that "Sears shall have no responsibility for any ...


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