Jonibach Mgmt. Trust v. Wartburg Enters., Inc.

• Decision Date: 30 September 2015
• Docket Number: Civil Action No. H–10–600.
• Citation: 136 F.Supp.3d 792
• Parties: JONIBACH MANAGEMENT TRUST, Plaintiff, v. WARTBURG ENTERPRISES, INC., Defendant.
• Court: U.S. District Court — Southern District of Texas

136 F.Supp.3d 792

JONIBACH MANAGEMENT TRUST, Plaintiff,

v.WARTBURG ENTERPRISES, INC., Defendant.

Civil Action No. H–10–600.

United States District Court, S.D. Texas, Houston Division.

Signed Sept. 30, 2015.

Phillip Robert Brinson, LeClairRyan, Adam Daniel Pollock, Serpe Jones Andrews Callender & Bell PLLC, Houston, TX, for Plaintiff.

Adam Q. Voyles, Lubel Voyles LLP, Lewis William Jost, Adair Myers PLLC, Houston, TX, for Defendant.

OPINION AND ORDER

MELINDA HARMON

, District Judge.

Pending before the Court in the above referenced cause, in which the sole remaining issue is a counterclaim filed by Defendant Wartburg Enterprises, Inc. ("Wartburg") against Plaintiff Jonibach Management Trust, a South African company trading as Bumbo International Trust, ("Bumbo"), alleging breach of an oral agreement between the two parties for Wartburg to distribute to retailers in the United States plastic baby seats products sold to Wartburg by Bumbo, is Bumbo's second motion for summary judgment (instrument # 152).

Standard of Review

Summary judgment under Federal Rule of Civil Procedure 56(c)

is appropriate when, viewing the evidence in the light most favorable to the nonmovant, the court determines that "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." A dispute of material fact is "genuine" if the evidence would allow a reasonable jury to find in favor of the nonmovant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

Where the nonmovant bears the burden of proof on a claim at trial, the movant must offer evidence that undermines the nonmovant's claim or point out the absence of evidence supporting essential elements of the nonmovant's claim; "the movant may, but does not have to, negate the elements of the nonmovant's case to prevail on summary judgment." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)

; Lujan v. National Wildlife Federation, 497 U.S. 871, 885, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990) ; Edwards v. Your Credit, Inc., 148 F.3d 427, 431 (5th Cir.1998).

If the movant meets its burden, the nonmovant must then present competent summary judgment evidence to support the essential elements of its claim and to demonstrate that there is a genuine issue of material fact for trial. National Ass'n of Gov't Employees v. City Pub. Serv. Board, 40 F.3d 698, 712 (5th Cir.1994)

. "[A] complete failure of proof concerning an essential element of the nonmoving party's case renders all other facts immaterial." Celotex, 477 U.S. at 323, 106 S.Ct. 2548. The nonmovant may not rely merely on allegations, denials in a pleading or unsubstantiated assertions that a fact issue exists, but must set forth specific facts showing the existence of a genuine issue of material fact concerning every element of its cause(s) of action. Morris v. Covan World Wide Moving, Inc., 144 F.3d 377, 380 (5th Cir.1998).

Conclusory allegations unsupported by evidence will not preclude summary judgment. National Ass'n of Gov't Employees v. City Pub. Serv. Board, 40 F.3d at 713

; Eason v. Thaler, 73 F.3d 1322, 1325 (5th Cir.1996). " ‘[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment ....’ " State Farm Life Ins. Co. v. Gutterman, 896 F.2d 116, 118 (5th Cir.1990), quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). "Nor is the ‘mere scintilla of evidence’ sufficient; ‘there must be evidence on which the jury could reasonably find for the plaintiff.’ " Id., quoting Liberty Lobby, 477 U.S. at 252, 106 S.Ct. 2505. The Fifth Circuit requires the nonmovant to submit " ‘significant probative evidence.’ " Id., quoting In re Municipal Bond Reporting Antitrust Litig., 672 F.2d 436, 440 (5th Cir.1982)

, and citing Fischbach & Moore, Inc. v. Cajun Electric Power Co–Op., 799 F.2d 194, 197 (5th Cir.1986). "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Thomas v. Barton Lodge II, Ltd., 174 F.3d 636, 644 (5th Cir.1999), citing Celotex, 477 U.S. at 322, 106 S.Ct. 2548, and Liberty Lobby, 477 U.S. at 249–50, 106 S.Ct. 2505.

Allegations in a plaintiff's complaint are not evidence. Wallace v. Texas Tech Univ., 80 F.3d 1042, 1047 (5th Cir.1996)

("[P]leadings are not summary judgment evidence."); Johnston v. City of Houston, Tex., 14 F.3d 1056, 1060 (5th Cir.1994) (for the party opposing the motion for summary judgment, "only evidence—not argument, not facts in the complaint—will satisfy' the burden."), citing Solo Serve Corp. v. Westowne Assoc., 929 F.2d 160, 164 (5th Cir.1991). The nonmovant must "go beyond the pleadings and by [his] own affidavits, or by depositions, answers to interrogatories and admissions on file, designate specific facts showing that there is a genuine issue of material fact for trial." Giles v. General Elec. Co., 245 F.3d 474, 493 (5th Cir.2001), citing Celotex, 477 U.S. at 324, 106 S.Ct. 2548.

The court must consider all evidence and draw all inferences from the factual record in the light most favorable to the nonmovant. Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)

; National Ass'n of Gov't Employees v. City Pub. Serv. Board, 40 F.3d at 712–13. The Court may not make credibility determinations nor weigh evidence. Deville v. Marcantel, 567 F.3d 156, 164 (5th Cir.2009), citing Turner v. Baylor Richardson Medical Center, 476 F.3d 337, 343 (5th Cir.2007).

Procedural History

From 2003–2010, Wartburg, inter alia, distributed to various retailers in the United States baby seats manufactured in South Africa, purchased by Bumbo, and resold to Wartburg. Since 2008 Wartburg also served as Bumbo's distributor for Wal–Mart, Toys "R" Us, and Babies "R" Us, Bumbo's largest retailers and most important American clients. The relationship between Wartburg and Bumbo deteriorated over time as Wartburg failed to make timely payments for products sent to it by Bumbo on credit. Bumbo decided to hire another distributor, but Wartburg objected, refused to distribute its Bumbo products to Wal–Mart, Toys "R" Us, and Babies "R" Us, and demanded to be Bumbo's exclusive distributor in this country.

On February 25, 2010, Bumbo filed this suit alleging breach of the distribution agreement and seeking specific performance, and the next day moved for a preliminary injunction (# 3), which was granted (# 8).¹ In granting the preliminary injunction requiring Wartburg to distribute its supply of Bumbo baby seats to the three major retailers allegedly pursuant to the parties' oral agreement and to post a $2000 bond, this Court found that "the clear course of dealing over several years" between the parties "strongly suggests an enforceable oral agreement." # 8 at p. 3.

On March 12, 2010, Wartburg filed counterclaims against Bumbo for breach of contract, fraud, and quantum meruit, amended on April 5, 2010. # 15, 31.

On June 18, 2010 Bumbo moved to dismiss all its own claims against Wartburg and to lift the temporary injunction (# 41) because Bumbo had found another distributor with adequate stock to meet the requirements of its United States retailers for the baby products and because Wartburg had informed Bumbo that its stock of Bumbo baby products was completely depleted, in other words because "the circumstances which prompted this lawsuit and necessitated the injunction have ... been resolved." # 41 at p. 1. On February 16, 2011 the Court granted with prejudice Bump's motion to dismiss its own claims, to lift the preliminary injunction, and to return to Bumbo the $2000 bond it had posted (# 86), thus leaving only Wartburg's counterclaims against Bumbo to be resolved.

The next day, February 17, 2011, the Court granted Bumbo's motion to dismiss (# 23) Wartburg's counterclaims for fraud and quantum meruit for failure to state a claim, but denied it as to Wartburg's counterclaims for breach of contract (# 87). Wartburg alleged three ways in which Bumbo had breached the parties' agreement: (1) by "refusing to sell and/or provide its baby products to Wartburg for sale to Wartburg's customers" (the "refusal of sale claim"); (2) by "taking over Wartburg's customer relationships" (the "customer relationships claim"); and (3) by "demand[ing] that Wartburg sell its inventory only to certain retailers," i.e., to Wal–Mart, Toys "R" Us, and Babies "R" Us (the "retailer limitation claim"). # 145 at p. 3. For clarity, the Court refers to them as separate claims since they were resolved differently.

On September 7, 2012, in ruling on Bumbo's first motion for summary judgment on the breach-of-contract counterclaims (# 107), this Court held that the statute of frauds barred Wartburg's attempt to enforce the parties' alleged oral distributorship agreement and granted final summary judgment (# 129 and 130) in favor of Bumbo on all three of Wartburg's breach-of-contract counterclaims. Citing the Texas statute of frauds, Texas Business & Commerce Code § 2.201(a)

("[A] contract for the sale of goods for the price of $500 or more is not enforceable ... unless there is some writing sufficient to indicate that a contract for sale had been made between the parties and signed by the party against whom enforcement is sought."), and Hugh Symons Group, plc v. Motorola, Inc., 292 F.3d 466, 469 (5th Cir.2002) [, cert. denied, 537 U.S. 950, 123 S.Ct. 386, 154 L.Ed.2d 295 (2002) ],² and changing its mind since entering the preliminary injunction,³ this Court decided that all three breach-of-contract counterclaims arose "not as a result of any initial oral agreement between the parties, but out of an alleged later oral modification" of the initial agreement (i.e., allegedly that Wartburg would have exclusive distributorship...