Curtis Lumber Co. Inc v. La. Pac. Corp.

• Decision Date: 24 August 2010
• Docket Number: No. 09-2602,09-2692.,09-2602
• Citation: 618 F.3d 762
• Parties: CURTIS LUMBER COMPANY, INC., doing business as Caldwell Lumber Company, Plaintiff-Appellant/Cross-Appellee,v.LOUISIANA PACIFIC CORPORATION, Defendant-Appellee/Cross-Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

618 F.3d 762

CURTIS LUMBER COMPANY, INC., doing business as Caldwell Lumber Company, Plaintiff-Appellant/Cross-Appellee,
v.
LOUISIANA PACIFIC CORPORATION, Defendant-Appellee/Cross-Appellant.

Nos. 09-2602, 09-2692.

United States Court of Appeals,
Eighth Circuit.

Submitted: June 16, 2010.
Filed: Aug. 24, 2010.

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Daniel Warren Van Horn, argued, Memphis, TN, for appellant.

Jeff Puryear, argued, Ryan Michael Wilson, on the brief, Jonesboro, AR, for appellee.

Before MELLOY, HANSEN, and SMITH, Circuit Judges.

MELLOY, Circuit Judge.

Louisiana Pacific Corporation (“LP”) is a national manufacturer of building materials. This case involves a rebate promotion that LP offered to builders and contractors who purchased a certain amount of LP's siding products. Curtis Lumber Company, Inc. (“Curtis Lumber”), a retail supplier of building materials, presented LP's rebate promotion to many of its customers. Eighty-two of those customers purchased or ordered LP's siding products with the expectation that LP would pay rebates worth up to $2,400. After the customers submitted rebate applications, LP demanded that the customers also submit proof that the siding products had been installed. That requirement surprised a large majority of the customers, many of whom cancelled orders with Curtis Lumber, refused to pay Curtis Lumber, or demanded a rebate from Curtis Lumber. In the end, Curtis Lumber allegedly lost over $100,000 as a result of LP's acts, but none of Curtis Lumber's customers suffered out-of-pocket expenses. Curtis Lumber brought this diversity action

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against LP. The district court granted summary judgment to LP on all of Curtis Lumber's claims, from which Curtis Lumber now appeals. LP asserts a conditional cross-appeal, claiming that Curtis Lumber lacks standing and is not the real party in interest for this dispute. We affirm in part and reverse in part.
I. Background

In late 2006 or early 2007, LP announced a rebate promotion for a line of siding products called SmartSide. The purpose of the promotion was to encourage builders and contractors to install SmartSide products. LP offered rebates for several types of siding products-trim ($500), soffit ($300), lap ($800), and panel ($800)-for a maximum rebate of $2,400. The rebate promotion applied to orders received and acknowledged between January 15, 2007 and May 18, 2007.

LP relied on wholesalers and retailers to market the rebate promotion, and for guidance, it distributed an information sheet listing the promotion's details. The information sheet listed two qualifications: (1) “This promotion is open to new Builders or Contractors who purchase at least one house worth of SmartSide products,” and (2) “Builder/Contractor will receive checks based upon purchases.” In addition, the information sheet stated that LP required invoice documentation for a rebate to be paid. LP also distributed an application for builders and contractors to complete and submit. Under the heading “Terms and Conditions,” the rebate application stated: “Please indicate products used and expected rebate, with a $2,400 maximum.” Following this instruction was a chart for an applicant to write in how much of each category of siding product he or she ordered.

Upon learning of the rebate promotion, Curtis Lumber solicited orders from its customers who were builders and contractors. By the promotion's deadline, Curtis Lumber sold SmartSide products to eighty-two of its customers with the expectation that LP would pay a rebate worth up to $2,400 to each customer. Most of the orders were close to $2,400, so the customers expected to receive the SmartSide products with little or no out-of-pocket cost. Curtis Lumber placed orders with LP's wholesale distributor, Boise Cascade, to fulfill its customers' orders. Curtis Lumber also helped most of the customers complete rebate applications and submit them to LP along with the required invoices. Curtis Lumber expected to make roughly $600 in profit on each $2,400 purchase of SmartSide products.

LP was suspicious of the rebate applications from Curtis Lumber's customers because they were submitted in batches, written in the same handwriting, and were at or near the minimum purchase amount for the maximum rebate. LP was also concerned because the applications were submitted with sequentially numbered invoices that did not indicate purchases of other building materials. These characteristics were unusual among the nearly 1,000 rebate applications LP received from builders and contractors across the country. Therefore, on June 25, 2007, LP sent a letter to all of the rebate applicants who purchased SmartSide products from Curtis Lumber, requesting the following information in order to process their rebates: (1) a picture of the home showing SmartSide products, (2) the street address of the newly sided home, and (3) responses to a short questionnaire. If a rebate applicant did not submit proof of use, then LP would not pay a rebate.¹

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Upon receiving LP's letter, rebate applicants complained to Curtis Lumber. A majority of the applicants purchased SmartSide products for future use and therefore had not yet installed the products. Curtis Lumber told the complaining customers not to respond to the June 25 letter since it believed LP should pay the rebates instead of imposing an additional requirement for the rebate promotion. On July 6, 2007, Curtis Lumber's counsel sent an email to LP, detailing the customers' complaints, requesting LP to process the rebates, and threatening to sue LP if it did not pay rebates to the customers.

In the end, only nine of Curtis Lumber's customers responded to the June 25 letter with proof of use. LP paid rebates to those nine customers along with one other customer who did not respond (Habitat For Humanity). The remaining seventy-two rebate applicants either cancelled their orders with Curtis Lumber, demanded a rebate from Curtis Lumber, or refused to pay invoices sent by Curtis Lumber. Curtis Lumber complied with its customers' requests. Forty-one orders of SmartSide products were cancelled prior to delivery. Curtis Lumber paid rebates to seventeen customers, “out of concern for losing [the customers'] other business and as a result of having presented this program to them.” Curtis Lumber was unable to collect the amount due on fourteen of the SmartSide sales. None of Curtis Lumber's customers incurred any out-of-pocket costs for which they were not reimbursed, and no customer has filed suit in connection with the SmartSide rebate promotion.

In April 2008, Curtis Lumber sued LP in Arkansas state court, asserting four causes of action: (1) breach of the Arkansas Deceptive Trade Practices Act (“ADTPA”), (2) negligent misrepresentation/constructive fraud, (3) equitable estoppel, and (4) intentional misrepresentation/fraud. Curtis Lumber alleged that LP's acts caused it to suffer just over $100,000 in damages, including lost profits from the cancelled sales, costs associated with carrying a large inventory of SmartSide products, the value of sales that Curtis Lumber was unable to collect, and costs of rebates paid to customers. Further, Curtis Lumber requested that LP pay attorneys' fees and punitive damages.

LP removed this case to federal court and moved for summary judgment on three grounds: (1) Curtis Lumber lacked standing and was not the real party in interest, (2) Curtis Lumber's claims were meritless, and (3) Arkansas law precludes the alleged damages. The district court rejected LP's threshold challenges but granted partial summary judgment, finding that the negligent misrepresentation/constructive fraud claim failed on the merits. The remainder of Curtis Lumber's claims survived because questions of material fact remained as to Curtis Lumber's fraud and ADTPA claims-specifically, whether LP's omission of a “proof of use” requirement in the rebate documents was a material omission, whether the omission was intentional, and whether it caused Curtis Lumber's damages. Also, the court held that Curtis Lumber could amend its complaint to allege promissory estoppel and two additional claims under the ADTPA. However, the court limited the available damages, concluding that Arkansas's voluntary payment rule prohibited Curtis Lumber from seeking the value of rebates or refunds paid to customers, and that the evidence was insufficient to support a punitive damages award.

LP then moved for reconsideration, contending that the district court overlooked the terms “products used ” in the rebate

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application. During a teleconference, the court acknowledged that it had given Curtis Lumber the benefit of a favorable inference on that question. Nonetheless, the court granted LP's motion for reconsideration, concluding that LP included a “use” requirement in its rebate program documents. As such, the court dismissed the remainder of Curtis Lumber's claims and also held that the voluntary payment rule precludes recovery of lost profits. Curtis Lumber appeals the dismissal of all of its claims and the district court's limitations on damages. LP conditionally cross-appeals the district court's determinations that Curtis Lumber has standing and is the real party in interest. Our discussion begins with LP's threshold challenges and then addresses the merits of Curtis Lumber's claims and the available damages.
II. AnalysisA. Standing

“Standing is a threshold inquiry and jurisdictional prerequisite that must be resolved before reaching the merits of a suit.” Medalie v. Bayer Corp., 510 F.3d 828, 829 (8th Cir.2007) (internal quotations omitted). Standing requires (1) an injury in fact (2) fairly traceable to the defendant's actions and (3) likely to be redressed by a favorable decision. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct....