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Owens Trophies, Inc. v. Bluestone Designs & Creations

United States District Court, N.D. Illinois, Eastern Division

February 7, 2017

OWENS TROPHIES, INC. f/k/a R.S. OWENS AND COMPANY, INC., Plaintiff,
v.
BLUESTONE DESIGNS & CREATIONS, Defendant.

          MEMORANDUM OPINION AND ORDER

          ROBERT W. GETTLEMAN UNITED STATES DISTRICT JUDGE.

         Plaintiff Owens Trophies, Inc. filed a one-count fourth amended complaint against defendant Bluestone Designs & Creations alleging breach of contract. Defendant answered the complaint and filed a counterclaim seeking declaratory relief. Plaintiff filed a motion for summary judgment as to defendant's counterclaim, after which defendant filed a motion to voluntarily dismiss its counterclaim, which this court granted. Defendant then filed the instant motion seeking summary judgment pursuant to Fed.R.Civ.P. 56. Plaintiff filed a motion to strike portions of defendant's Local Rule 56.1 statement for violating Fed.R.Civ.P. 56 and L.R. 56.1. For the reasons discussed below, defendant's motion is granted and plaintiff's motion is denied.

         BACKGROUND[1]

         Plaintiff is a design firm that began working with defendant, a manufacturer of trophies and awards, to produce various items beginning in 2004. In January 2007, plaintiff presented, and both parties signed, a Manufacturing and Supply Agreement (“the Contract”). The first recital of the Contract states that it “ shall be made effective as of January 1, 2005.” The term provision in the Contract, however, states that it “shall be effective for a period of five years from April 1, 2006 until April 1, 2011.” Additionally, the Contract contained a clause that prohibited defendant from providing “to anyone ... other than [plaintiff], any Work which [plaintiff] has provided to [defendant] . . . .” This prohibition was to remain in place for two years after the termination or expiration of the Contract. One of the items defendant manufactured for plaintiff, the Emmy Award statue (“the Emmy Award”), is the subject of this lawsuit. Plaintiff had a “longstanding” arrangement to produce the Emmy Award for both the National Academy of Television Arts and Sciences and the Academy of Television Arts and Sciences (“the Academy”). Defendant, along with its factory partner in China, began producing the Emmy Award for plaintiff, who then sold it to the Academy, in 2005. In 2010, the Academy notified plaintiff that a competitor had quoted the Academy a price well below plaintiff's price for producing the Emmy Award. Plaintiff matched the competitor's price and increased donations to the Academy, but the Academy subsequently advised plaintiff that some of its chapters would be acquiring the Emmy Award through another source. Plaintiff learned that the aforementioned competitor was this alternate source, and that defendant was producing the Emmy Award for this competitor. After learning this, plaintiff and defendant continued their relationship for approximately four years, at which point plaintiff filed the instant complaint alleging breach of contract against defendant.

         DISCUSSION

         I. Legal Standard

         A movant is entitled to summary judgment pursuant to Fed.R.Civ.P. 56 when the moving papers and affidavits show that there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Once a moving party has met its burden, the nonmoving party must go beyond the pleadings and set forth specific facts showing there is a genuine issue for trial. See Fed.R.Civ.P. 56(c); Becker v. Tenenbaum-Hill Assoc., Inc., 914 F.2d 107, 110 (7th Cir. 1990). The court considers the record as a whole and draws all reasonable inferences in the light most favorable to the party opposing the motion. See Green v. Carlson, 826 F.2d 647, 651 (7th Cir. 1987).

         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). The nonmoving party must, however, “do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). “The mere existence of a scintilla of evidence in support of the [nonmoving party's] position will be insufficient; there must be evidence on which the jury could reasonably find for the [nonmoving party].” Anderson, 477 U.S. at 252.

         II. Analysis

         Defendant argues that it is entitled to summary judgment for three reasons: (1) the Emmy Award was not within the scope of the Contract because it did not qualify as a “Work”; (2) assuming the Contract did apply to the Emmy Award, plaintiff is barred from recovery because it did not exercise either of the two breach of contract remedies provided for in the Contract; and (3) defendant was excused from performance because plaintiff materially breached the Contract first by refusing to accept a shipment of 500 Emmy Awards and by failing to live up to its payment obligations.[2] The court need address only the first argument.

         According to defendant, it was not contractually obligated to sell the Emmy Award exclusively to plaintiff because it did not qualify as a “Work” under the Contract. The term “Work” is, unfortunately, not defined in the Contract. Consequently, defendant's argument that the Emmy Award was not a “Work” is premised on provisions in the Contract that spell out the process through which an item could become a “Work.” The Contract contained the following provisions:

(1) [Plaintiff] shall inquire with [defendant] as to its capability to manufacture, in accordance with all standards and conditions identified herein and any others that may be agreed hereinafter, [plaintiff]'s total requirements of a designated Work in the Territory during the term . . . . [Plaintiff] shall provide [defendant] with all materials and information that [plaintiff] believes are reasonable and necessary to evaluate [defendant]'s capability to manufacture and supply the designated Work in Accordance with this agreement.
(2) Within a reasonable period of time but no later than forty-five days thereafter, [defendant] shall provide [plaintiff] with a fully compliant prototype of the designated Work.
(3) In furtherance of [plaintiff]'s evaluation, [defendant] shall provide [plaintiff] with any additional information which [plaintiff], in its sole discretion, deems necessary to evaluate [defendant]'s capabilities with respect the Work [sic] under ...

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