Haley v. Amazon.com Servs., LLC

Decision Date27 December 2022
Docket Number83010-4-I
Citation522 P.3d 80
Parties Jeff HALEY, Appellant, v. AMAZON.COM SERVICES, LLC, f/k/a Amazon.com Services, Inc., f/k/a Amazon Fulfillment Services, Inc., Respondent.
CourtWashington Court of Appeals

Daniel Robert Prince, Prince Legal, 2020 Maltby Rd. Ste 7, Bothell, WA, 98021-8669, for Appellant.

Ross Colin Siler, John Goldmark, Davis Wright Tremaine LLP, 920 5th Ave. Ste. 3300. Seattle, WA, 98104-1610, for Respondent.

OPINION PUBLISHED IN PART

Dwyer, J.

¶1 Summary judgment is a mechanism for dismissing claims that are unsupported by law or fact. It is not a tool for assessing the weight or credibility of a party's evidence.

¶2 Here, the trial court dismissed plaintiff Jeff Haley's complaint by granting a motion for summary judgment filed by defendant Amazon.com Services, LLC. In dismissing the complaint, the trial court declined to credit some of Haley's evidence because it was "self-serving," found that Haley's evidence was not credible, and made a series of findings resolving factual issues in Amazon's favor. Because material questions of disputed fact should not be resolved on summary judgment, we reverse.

I

¶3 Jeff Haley was the founder and president of OraHealth USA, Inc. (OraHealth). From 2004 until 2019, OraHealth manufactured a product called XyliMelts, an adhering disc designed to combat dry mouth. OraHealth sold its products wholesale to Amazon, which then sold OraHealth's products to the public.

¶4 On December 28, 2011, an employee of OraHealth agreed to a marketing development fund (MDF) agreement1 (the MDF Agreement) with Amazon, which took effect on January 1, 2012. Pursuant to this agreement, Amazon would deduct 10 percent of the net receipts from the sale of OraHealth products before remitting payment to OraHealth. The MDF Agreement stated that it would "automatically renew on the same terms for additional periods of one year each unless either Vendor or Amazon gives the other party written notice of non-renewal at least 60 days before the end of the term."

¶5 During 2012, Amazon made the 10 percent deduction from OraHealth's net receipts on a monthly basis. Haley sent an e-mail to Amazon employee Hiley Olsen in June 2012 objecting to the deductions and expressing his desire to obtain a lower MDF rate. Although OraHealth was unable to successfully negotiate a lower MDF rate, it did raise its prices by 6 percent in order to offset the monthly deductions.

¶6 From 2013 to 2015, Amazon made no deductions from OraHealth's net receipts. In January 2016, Amazon sent a notice to OraHealth via e-mail stating that it had conducted an audit and it intended to deduct $47,679.44 from the next disbursement of funds to OraHealth. This amount represented 10 percent of OraHealth's net proceeds for the entire 2014 calendar year. On or about March 1, 2016, OraHealth sent a letter to Amazon protesting the proposed deduction. Amazon did not respond to the letter and made the deduction.

¶7 In August 2016, Amazon sent another notice via e-mail to OraHealth stating that it intended to deduct $81,857.16 from the next disbursement. This amount represented 10 percent of OraHealth's net proceeds for the entire 2015 calendar year. OraHealth renewed its objection to this proposed deduction. Amazon made the deduction in October 2016 without resolving OraHealth's objection.

¶8 Amazon made no deductions from OraHealth's 2016 proceeds during the 2016 calendar year. It was not until March 2018 that Amazon deducted 10 percent of OraHealth's 2016 net proceeds from its disbursement, in an amount of $34,328.71.

¶9 In March 2017, Amazon requested that OraHealth accept the updated terms of its MDF Agreement in Vendor Central.2 A screenshot of the Vendor Central page dated March 11, 2017, shows the "New Base Accrual/Marketing Development Funds (MDF)" at "13.65% Base Accrual" and the "Current Base Accrual/Marketing Development Funds (MDF)" as "0.00% Base Accrual." OraHealth did not agree to the 13.65 percent rate and was able to negotiate an MDF rate of 6 percent for the remainder of the year.

¶10 In March 2018, Amazon again requested that OraHealth accept the updated terms of its agreements in Vendor Central. On March 8, 2018, Haley contacted Amazon to confirm the MDF rate for 2018. Amazon replied that the MDF rate was 20 percent. Haley insisted to Amazon that he had not accepted the 20 percent MDF rate and, in a series of e-mails that followed, attempted to negotiate a 6 percent MDF rate in line with the previous year's figure. Those negotiations ultimately failed. OraHealth then ceased selling its products to Amazon.

¶11 In May 2018, Amazon made a deduction of $28,017, representing 20 percent of OraHealth's net receipts for April 2018, from its disbursement to OraHealth.

¶12 Haley filed suit against Amazon on July 22, 2020, asserting claims for declaratory relief, unjust enrichment, accounts receivable, and violation of the Consumer Protection Act3 (CPA). Haley filed a motion for partial summary judgment on November 9, 2020, seeking entry of judgment on his claim for declaratory relief. In support of this motion, Haley submitted his declaration, testifying to the facts as he perceived them and attaching multiple documents. Therein, Haley asserted that:

I paid specific attention to the auto-renewal provision, and I contacted Amazon in October of 2012—more than 60 days before the end of the year. I recall submitting a form via Vendor Central instructing Amazon not to renew the 2012 MDF Agreement. I no longer have access to this written communication.
... I also followed up by phone to confirm that the MDF was not going to renew the following year. At least one Amazon representative acknowledged that they had received the email in May and confirmed that the 2012 MDF Agreement would not automatically renew.

¶13 Haley also testified that, as far as he could recall, the MDF Agreement did not appear in Vendor Central with the other agreements between OraHealth and Amazon that were in force between 2013 and 2017. Haley stated that had Amazon continued deducting 10 percent of OraHealth's net receipts into 2013, he would have both increased his prices and again notified Amazon in writing to not renew the MDF Agreement.

¶14 In response to Haley's motion, Amazon submitted a declaration from Gianmarco Vairo, a paralegal in Amazon's litigation department, stating that he had conducted a search of Amazon's records and was unable to "identify any additional documents or communications from Mr. Haley or any other OraHealth representative with Amazon between 2012 and when Amazon began assessing post-audit coop fee deductions in 2016 other than the email chain attached as Exhibit 1[4 ] to Ms. Olsen's declaration."

¶15 The trial court denied Haley's motion for partial summary judgment on December 4, 2020. In its 10-page order, the trial court entered a number of factual findings and related legal conclusions. On page three of its order, the trial court entered a finding that, "The Court finds that Mr. Haley never repudiated the 2012 Agreement." In the same paragraph, the trial court further found that "Mr. Haley changed OraHealth's pricing and shipping cost structure in acknowledgment that coop fees were required." In the following paragraph, the trial court made the express finding that Mr. Haley did not repudiate the 2012 MDF Agreement. That paragraph of the trial court's order reads as follows:

Mr. Haley claims that he repudiated the 2012 Agreement in communications with unidentified Amazon representative(s) in October 2012. Mot. at 6:3-7 ("Mindful of the automatic renewal clause in the 2012 MDF Agreement, Haley reached out to Amazon through Vendor Central and by phone around October 2012, and at least one Amazon representative affirmed that Haley had properly communicated a cancellation of the 2012 MDF Agreement for the following year."). But Mr. Haley offers no evidence supporting that he had any further communications with Amazon regarding the 2012 Agreement after his May and June 2012 emails with Ms. Olsen. See Haley Decl. ¶¶ 10-11. In any event, Mr. Haley's phone communications with Amazon would be ineffective to cancel the 2012 Agreement, which required advance "written notice" for any valid termination. Haley Decl. Ex. 2. The Court also notes that Mr. Haley never mentioned these purported October 2012 communications with Amazon in either of his two previously filed complaints in this action (Dkt. 1 & 22) or in the six complaints he brought in his 2017-18 action against Amazon concerning these same deductions. See OraCoat, Dkt. 1, 16, 18, 23, 26, 29B. [5 ] The Court finds that Mr. Haley did not effectively repudiate the 2012 Agreement in writing at any point in 2012.

¶16 On April 9, 2021, the parties filed dueling motions for partial summary judgment. Amazon asked the trial court to dismiss all of Haley's claims other than the account receivable claim for 2018. Haley, on the other hand, requested that the trial court enter judgment in his favor on his accounts receivable claims for 2014 through 2018. Both parties submitted affidavits and other evidentiary material in support of their arguments.

¶17 The trial court entered orders on both motions on May 7, 2021. In both orders, the trial court relied in part on its prior order denying Haley's first motion for partial summary judgment. First, in denying Haley's second motion for partial summary judgment, the trial court found that the motion was "an untimely and improper attempt to seek reconsideration of the Court's Order" on the first summary judgment motion. Second, in granting Amazon's motion for partial summary judgment, the trial court reiterated that it had previously made "findings" that it was now treating as conclusive. In paragraph three of the order, the trial court stated:

In its previous Order, the Court found and concluded that (1) "Amazon undisputedly exercised its express contract rights in conducting the audits and deducting for the overpayments that Mr. Haley
...

To continue reading

Request your trial
3 cases
  • Rogerson v. State
    • United States
    • Washington Court of Appeals
    • November 27, 2023
    ...on summary judgment, engaging in the same inquiry as did the trial court. Haley v. Amazon.com Servs., LLC, 25 Wn.App. 2d 207, 216, 522 P.3d 80 (2022). Summary judgment appropriate when "there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as......
  • Rathod v. Feely Indus.
    • United States
    • Washington Court of Appeals
    • July 31, 2023
    ...216, 225, 770 P.2d 182 (1989)). The burden then shifts to the nonmoving party to present evidence that an issue of material fact remains. Id. The party may accomplish this by setting forth facts and documents that would be admissible as evidence through depositions, answers to interrogatori......
  • Stocks v. Porter (In re C.A.S.)
    • United States
    • Washington Court of Appeals
    • December 27, 2022

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT