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Intermatic Inc. v. J. Baxter Brinkmann International Corp.

October 11, 2011

INTERMATIC INC.
v.
J. BAXTER BRINKMANN INTERNATIONAL CORP.



Name of Assigned Judge Sitting Judge if Other or Magistrate Judge Frederick J. Kapala than Assigned Judge

CASE TITLE

DOCKET ENTRY TEXT:

Defendant's motion to strike requests for consequential and incidental damages [41] is denied as moot. Defendant's motion to dismiss Count III of plaintiff's amended complaint [47] is denied.

O[ For further details see text below.] Docketing to mail notices.

STATEMENT

Plaintiff, Intermatic Incorporated, filed a three-count complaint against defendant, J. Baxter Brinkmann International Corporation, alleging that defendant committed fraud and breached the parties' contractual agreement regarding a sale of plaintiff's assets and defendant's continued purchase of certain products from plaintiff. Now before the court are defendant's motions to strike requests for consequential and incidental damages and to dismiss Count III of plaintiff's amended complaint.

I. BACKGROUND

As described in further detail in this court's order dated March 14, 2011, in April and May 2009, plaintiff and defendant entered negotiations for defendant to purchase the assets of plaintiff's Malibu Lighting Products division ("Malibu"). Malibu manufactured and sold low-voltage lighting products for outdoor residential use, and its largest customer was Home Depot. The negotiations resulted in two agreements between the parties: the Asset Sale Agreement, by which defendant purchased the assets of Malibu, and the Supply Agreement, a requirements contract by which defendant agreed to purchase from plaintiff all power packs associated with Malibu products that were not "kitted" with Malibu products.

Plaintiff filed a three-count complaint on May 21, 2010. In Count I, plaintiff alleged that defendant breached the Supply Agreement by unilaterally changing the power pack specifications, inducing Home Depot to accept the new specifications, and terminating the Supply Agreement. In Count II, plaintiff alleged that defendant breached the Supply Agreement by changing the specifications for the power pack products, failing to purchase 100% of its requirements for power pack products from plaintiff, and reducing its requirements for power pack products in bad faith. In Count III, plaintiff alleged that defendant committed fraud when it entered the Supply Agreement with no intent to honor the agreement, purported to enter the agreement in good faith, and entered the Supply Agreement to induce plaintiff into entering the Asset Sale Agreement.

In its previous order, the court denied defendant's motion to dismiss plaintiff's complaint as to Counts I and II, and granted defendant's motion to dismiss the complaint as to Count III without prejudice. The court granted plaintiff thirty days within which to file an amended complaint to properly allege damages with the specificity required by Federal Rule of Civil Procedure 9(b). Plaintiff timely filed its amended complaint, and defendant moves to strike plaintiff's requests for consequential and incidental damages and to dismiss Count III of plaintiff's complaint.

II. ANALYSIS

A. Defendant's Motion to Strike

In its motion to strike plaintiff's requests for consequential and incidental damages, defendant contends that plaintiff's requests for consequential and incidental damages related to its facility in Juarez, Mexico should be stricken because plaintiff expressly disclaimed such damages in the Supply Agreement. In its response, plaintiff agrees not to pursue "any contract or fraud damages derived from 'loss of the cost absorption, savings, and manufacturing efficiencies that would be realized from Intermatic's Juarez, Mexico manufacturing facility" and ...


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