M. Leff Radio Parts, Inc. v. Mattel, Inc.
| Decision Date | 08 December 1988 |
| Docket Number | Civ. A. No. 84-2084. |
| Citation | 706 F. Supp. 387 |
| Parties | M. LEFF RADIO PARTS, INC., a Corporation, Plaintiff, v. MATTEL, INC., a corporation; and John Doe # 1 Through John Doe # 10, Individuals and/or Corporations, Defendants. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
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Kevin P. Lucuas, James P. Hollihan, Manion Alder & Cohen, P.C., Pittsburgh, Pa., for plaintiff.
Reed, Smith, Shaw & McClay, Roger C. Wiegand and Gail M. Foote, Pittsburgh, Pa., for Mattel, Inc.
Plaintiff's complaint was referred to United States Magistrate Gary L. Lancaster in accordance with the Magistrates Act, 28 U.S.C. § 636(b)(1), and Rules 3 and 4 of the Local Rules for Magistrates.
On November 8, 1988, the Magistrate filed his Report and Recommendation, which concluded that Defendant's motion for partial summary judgment should be granted. Objections to the Magistrate's Report and Recommendation were filed by Plaintiff on November 22, 1988. After de novo review of the pleadings and documents in the case, together with the Report and Recommendation and objections thereto, the following order is entered this 8th day of December, 1988:
IT IS HEREBY ORDERED that Defendant's motion for partial summary judgment is granted.
The Report and Recommendation filed by Magistrate Lancaster is adopted as the Opinion of the Court.
GARY L. LANCASTER, United States Magistrate.
Plaintiff, M. Leff Radio Parts, Inc. ("Leff"), filed this civil action against Mattel, Inc. and ten John Doe Defendants ("Mattel"). Plaintiff's five count complaint alleges: 1) breach of contract; 2) wrongful interference with contractual relations; 3) fraud, misrepresentation and deceit; 4) mistake; and 5) violations of federal antitrust laws. Plaintiff seeks damages in excess of $10,000.00 and certain equitable relief. Mattel has moved for partial summary judgment and, for the reasons set forth below, the motion should be granted.
Leff is a Pennsylvania corporation with its principal place of business in Braddock, Pennsylvania. Leff's primary business is the distribution of electronic parts and equipment. Mattel, a manufacturer of children's toys, is a Delaware corporation with its principal place of business in California.
In the late 1970's, Mattel entered what was then the booming consumer market in home video games. Video games are comprised of two components: a console which is attached to a television and serves as the computer; and interchangeable cartridges which house the programs for the individual games. Mattel's console-cartridge system was introduced under the name of "Intellivision." Mattel sold Intellivision either directly to retailers, or to distributors who resold the games to retailers. One such distributor was Plaintiff, who began selling Intellivision in 1980.
Beginning in late 1982, the high consumer demand for home video games declined precipitously. The turndown in consumer demand was universal; all companies engaged in the manufacture and distribution of home video games suffered immediate and drastic losses. Mattel attempted to minimize its losses by, among other things, making substantial layoffs in the workforce; replacing the upper-level management of the Intellivision division; and overall scaling back on its operations. However, after the first three fiscal quarters of 1983—from February 1983 to October 1983 —Mattel's losses had already totalled $283,527,000.00. Consequently, Mattel's Board of Directors determined that the Intellivision division was unsalvageable1 and, in February of 1984, Mattel sold the Intellivision division and got out of the home video game business.
Although Plaintiff's multiple legal claims are discussed in detail infra, broadly stated, Plaintiff contends that during the relevant period, Mattel's authorized agents misrepresented to Plaintiff that, despite its recent losses, Mattel intended to remain in the home video game market. Consequently, Plaintiff continued to buy Intellivision products in the belief that Mattel would continue to support those products with research, development, and advertising. However, when Mattel sold the business, it also stopped providing support services. Consequently, Plaintiff's inventory became unsalable.
Further, in excess of 90% of Plaintiff's sales of Intellivision products were to the G.C. Murphy Company. From the inception of their relationship, G.C. Murphy and Plaintiff agreed that all sales to G.C. Murphy would be on a "sale or return," basis, i.e. G.C. Murphy could return any unsold Intellivision product to Plaintiff for credit. Pursuant to the arrangement, after Mattel sold its Intellivision division, G.C. Murphy returned approximately $240,000.00 worth of unsold Intellivision products to Plaintiff. Plaintiff contends that it had a parallel oral agreement with Mattel that any products returned by G.C. Murphy to Plaintiff could, in turn, be returned by Plaintiff to Mattel. Mattel now refuses to honor the oral agreement.
Plaintiff seeks both to return the unsold products in its inventory for credit against its outstanding balance owed to Mattel,2 and damages caused by Mattel's alleged misrepresentations.
Summary judgment is proper when the pleadings and evidence on file show that "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. Rule 56(c). A "material fact" is one whose resolution will affect the ultimate determination of the case. R.C. Bigelow, Inc. v. Unilever N.V., 689 F.Supp. 76 (D.Conn.1988). A genuine dispute about a material fact arises when "the evidence is such that a reasonable jury could return a verdict for that party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986).
Titan Sports, Inc. v. Comics World Corp., 690 F.Supp. 1315, 1318 (S.D.N.Y.1988) (citing authorities).
To demonstrate entitlement to summary judgment, the Defendant, as the moving party, is not required to refute the essential elements of the Plaintiff's cause of action. The Defendant need only point out the absence or insufficiency of the Plaintiff's evidence offered in support of those essential elements. Celotex, 477 U.S. at 322-323, 106 S.Ct. at 2552-2553; Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Houser v. Fox Theatres Management Corp., 845 F.2d 1225, 1229 (3d Cir.1988). Once that burden has been met, the Plaintiff must identify affirmative evidence of record which supports each essential element of his cause of action. Anderson, 477 U.S. at 256-57, 106 S.Ct. at 2514-15.
Factual specificity is required of one who opposes a motion for summary judgment because summary judgment is designed to go beyond the pleadings to assess whether a genuine issue of material fact exists and whether a trial is necessary. Celotex, 477 U.S. 317, 106 S.Ct. 2548. Therefore, in order to defeat a properly supported motion for summary judgment, a Plaintiff can not merely restate the allegations of his complaint, Farmer v. Carlson, 685 F.Supp. 1335 (M.D.Pa.1988), nor can he rely on self-serving conclusions unsupported by specific facts in the record. Plaintiff must point to concrete evidence in the record which supports each essential element of his case. Celotex, 477 U.S. at 322-23, 106 S.Ct. at 2552-53. If the Plaintiff fails to provide such evidence, then he is not entitled to a trial and Defendant is entitled to summary judgment as a matter of law.
Thus, the mere existence of some alleged factual dispute between the parties will not defeat a motion for summary judgment. See Graham v. Collier, 688 F.Supp. 146, 147 (D.Del.1988). Rather, where the party with the burden of proof fails to demonstrate the existence of an element essential to his case, "there can be `no genuine issue as to any material fact,' given a complete failure of proof concerning an essential element of the non-moving party's case, necessarily renders all other facts immaterial." Celotex, 477 U.S. at 322-23, 106 S.Ct. at 2553.
With these concepts in mind, we turn to the merits of Defendant's motion.
Plaintiff contends that Mattel breached an oral agreement that any unsold products returned by G.C. Murphy to Plaintiff could, in turn, be returned by Plaintiff to Mattel. Mattel has moved for summary judgment on the basis that "sale or return" agreements are subject to the statute of frauds as incorporated in the Uniform Commercial Code—Sales ("U.C.C."), 13 Pa.C. S.A. §§ 2101-2725, and, thus, "not enforceable ... unless there is some writing sufficient to indicate that a contract for sale had been made between the parties." Id. § 2201(a).
The operable section of the U.C.C. is Section 2326, which provides:
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