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Scholl's 4 Seasons Motor Sports, Inc. v. Arctic Cat Sales

October 3, 2012

SCHOLL'S 4 SEASONS MOTOR SPORTS, INC. PLAINTIFF,
v.
ARCTIC CAT SALES, INC. DEFENDANT.



The opinion of the court was delivered by: Magistrate Judge Susan E. Cox

MEMORANDUM OPINION AND ORDER

Plaintiff Scholl's 4 Seasons Motor Sports, Inc. ("Scholl's") filed this action against defendant Arctic Cat Sales, Inc. ("Arctic Cat") alleging various causes of action, all of which were rejected by the district judge who originally presided over this case in a ruling entering summary judgment against Scholl's and in favor of Arctic Cat.*fn1 Arctic Cat counter-sued alleging two different theories of recovery against Scholl's. The first is that Scholl's breached its obligations under the 2008 and 2009 Dealer Agreement when it took inventory of Arctic Cat all-terrain vehicles (ATVs) and snowmobiles, but refused to pay the invoiced amounts. This breach, according to Arctic Cat, entitles it to the amount of the unpaid invoices ($74, 922.83), its attorneys' fees (unspecified) and interest calculated at the rate of 1.5% per month on the unpaid balances ($56,536.88 as of June 12, 2012.) In the alternative, Arctic Cat claims that Scholls was unjustly enriched as a result of Scholl's taking its product, but not paying for it.

Arctic Cat originally filed for summary judgment on its breach of contract claim as well but the district judge denied it because Arctic Cat failed to submit to the Court a signed Dealer Agreement between the parties or any evidence that such an agreement existed between the parties after 2007. As the Court will explain further below, Arctic Cat has never been able to adduce any proof that it ever signed these agreements with Scholl's for 2008 or 2009, although Arctic Cat sent them to Scholl's and Scholl's signed them.

The parties consented to our jurisdiction in this case and the matter ultimately was tried to the Court in June, 2012. The only witnesses at the trial were Ann Joppru, Arctic Cat's Credit Manager and Michael Scholl, the owner of Scholl's. After the bench trial, the Court asked both sides to submit proposed findings of fact and conclusions of law. Because neither side addressed the issue of an award of interest should Arctic Cat prevail - not on its breach of contract claim but instead on its claim for unjust enrichment - the Court also requested that supplemental authority on this point be provided.

The following are the Court's Findings of Fact and Conclusions of Law.

Findings of Fact

1. Arctic Cat Sales, Inc. is a Minnesota corporation with its principal place of business in Minnesota.

2. Scholl's 4 Seasons Motor Sports is an Illinois corporation with its principal place of business in Elgin, Illinois.

3. Arctic Cat is a distributor of ATVs and snow mobiles and related parts, oil, clothes and accessories.

4. Scholl's sells this same kind of equipment to its customers.

5. Scholl's and Arctic Cat previously had entered into so-called Dealer Agreements which governed the terms and conditions of the sale of Arctic Cat merchandise.

6. Such Agreements provided that Scholl's was to pay for any merchandise it ordered and that the "dealer shall reimburse Company for any and all finance charges, collection costs, attorneys' fees and expenses incurred by the Company in obtaining payment on any sums due the Company from Dealer."*fn2

7. In 2008, Arctic Cat sent Michael Scholl a Dealer Agreement which included this language. However, although Scholl admitted he signed the agreement, he never received a signed copy of it back from Arctic Cat despite frequent requests for that agreement.*fn3

8. Arctic Cat did not produce a signed Dealer Agreement for 2008, nor did any witness from Arctic Cat testify that s/he executed such an Agreement with Scholl's.

9. In 2009, Arctic Cat sent Michael Scholl a Dealer Agreement which included this language. However, although Scholl admitted he signed the agreement, he never received a signed copy of it back from Arctic Cat.*fn4

10. Arctic Cat did not produce a signed Dealer Agreement for 2009, nor did any witness from Arctic Cat testify that s/he ...


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