Mdg Intern., Inc. v. Australian Gold, Inc.
| Decision Date | 17 March 2009 |
| Docket Number | No. 1:07-cv-1096-SEB-TAB.,1:07-cv-1096-SEB-TAB. |
| Citation | 606 F.Supp.2d 926 |
| Parties | MDG INTERNATIONAL, INC., Plaintiff, v. AUSTRALIAN GOLD, INC., Defendant. |
| Court | U.S. District Court — Southern District of Indiana |
Amanda C. Couture, Edward O'Donnell Delaney, Kathleen Ann Delaney, Delaney & Delaney LLC, Indianapolis, IN, for Plaintiff.
Peter Jon Prettyman, Richard A. Kempf, Thomas F. O'Gara, Taft Stettinius & Hollister LLP, Indianapolis, IN, for Defendant.
ORDER ADDRESSING MOTIONS FOR SUMMARY JUDGMENT
This cause is before the court on Defendant, Australian Gold, Inc.'s ("Australian Gold") Motion for Partial Summary Judgment on South Africa and the United Arab Emirates [Docket No. 37], filed on April 8, 2008; Australian Gold's Motion for Partial Summary Judgment on Mexico [Docket No. 39], filed on April 15, 2008; Australian Gold's Motion for Partial Summary Judgment on Cruise Ship Sales [Docket No. 97], filed on November 7, 2008; and Australian Gold's Motion for Partial Summary Judgment on MDG's Claim for Damages Arising from the Brazilian Recall [Docket No. 99], filed on November 7, 2008.
In the case at bar, Plaintiff, MDG International, Inc. ("MDG"), claims that Australian Gold breached the parties' initial contract by marketing products to competitors, including Starboard Cruise Services, and that Australian Gold committed fraud when it misled MDG about expiration dates on Australian Gold products. In its motions, Australian Gold contends that summary judgment should be entered against MDG on all claims arising out of purported South Africa and UAE contracts; the parties' contract in Mexico; Australian Gold's relationship with Starboard Cruise Services; and the recall of expired products in Brazil. For the reasons detailed in this entry, Defendant's Motion for Partial Summary Judgment on South Africa and the United Arab Emirates is GRANTED; Defendant's Motion for Partial Summary Judgment on Mexico is DENIED; Defendant's Motion for Partial Summary Judgment on Cruise Ship Sales is GRANTED; and Defendant's Motion for Partial Summary Judgment on Brazil Recall is GRANTED in part and DENIED in part.
Plaintiff MDG is a corporation organized under the laws of Florida with its principal place of business in Florida. Defendant Australian Gold is a corporation organized under the laws of Indiana with its principal place of business in Indiana. MDG distributes sun tanning products internationally; Australian Gold manufactures tanning products that it sells through distributors like MDG. On May 27, 1994, MDG and ETS (the corporate predecessor to Australian Gold) entered into a distributorship agreement ("the Agreement") to which Australian Gold is now a party.1
The Agreement granted MDG the exclusive rights to market, distribute, and sell Australian Gold products in defined territories, including South America, Mexico, Israel, Puerto Rico, and the Caribbean islands.2 The initial term of the Agreement lasted from September 23, 1993 to December 31, 1994. Thereafter, the Agreement renewed on an annual basis as to each territory, provided each party performed its part of the contract.3
Although South Africa was not mentioned in the Agreement, on July 6, 1995, Australian Gold sent a letter to MDG proposing the appointment of MDG as Australian Gold's exclusive distributor in South Africa. That letter stated:
Please accept this letter as a confirmation of our intention to appoint [MDG] as the exclusive distributor of Australian Gold Tanning Products in the country of South Africa. This appointment will be based on a mutually agreed upon quota assignment for this territory, and such quotas will be included in a contractual rider to be executed by July 30, 1995.
The "contractual rider" mentioned was never executed, nor were any quotas, or any other terms, established. MDG has never sold an Australian Gold product in South Africa.
On May 14, 2001, Australian Gold sent a second letter to MDG, this one regarding the appointment of MDG as Australian Gold's exclusive distributor in the UAE:
Please accept this as notification of our appointment of [MDG] as exclusive distributors of Australian Gold [products] to the . . . The United Arab Emirates . . . . Addendums to your legal contracts are being prepared. No "addendums" were ever executed by the parties, nor were any other terms prepared or established.
The Agreement executed on May 27, 1994, gave MDG the exclusive right to sell, market, and distribute Australian Gold products in Mexico. The minimum purchase requirement ("Mexico quota") during the Agreement's initial term was 106,000 units.4 Under the Agreement, each year, the Mexico quota increased to 110% of the preceding year's quota. In 2007, the Mexico quota was 332,673 units, but MDG purchased only 250,680 units for sale in Mexico that year.5
Although the Agreement established this specific quota, for fourteen years, Australian Gold only requested, and MDG only reported, information on total overall sales for all territories, never break-down calculations of specific territory sales. Moreover, Australian Gold never mentioned nor complained to MDG that MDG had failed to meet a territory quota. However, on February 12, 2007, Australian Gold notified MDG that MDG would be required to provide an accounting of its 2007 sales by territory. On April 14, 2008, Australian Gold notified MDG that it allegedly had failed to meet the Mexico quota for 2007.
During the course of the Australian Gold-MDG business relationship, Australian Gold also had a separate distribution and sales agreement with Starboard Cruise Services, which operates gift shops on cruise liners worldwide, including in the Caribbean Sea. Starboard sells Australian Gold products to ship passengers while the ships are in international waters. Nevertheless, because many of these ships dock at the ports of countries inside MDG's exclusive territory, MDG argues that Australian Gold's agreement with Starboard violated MDG's exclusive rights and thus was a breach of the Australian Gold-MDG Agreement.
The Agreement also gave MDG exclusive rights to sell, market, and distribute Australian Gold products in South America, including the country of Brazil. In 2004, MDG began working with Frajo Internacional de Cosmeticos ("Frajo"), through its owner, Frank Lund, with the aim of creating a joint venture for the distribution of Australian Gold products in Brazil. In 2006, Australian Gold and MDG recalled certain products from the Brazil market because those products were expired or would soon expire (the "Brazil Recall"). MDG has brought claims for expenses and lost profits, as well as fraud claims, for damages allegedly resulting from the Brazil Recall.
Summary judgment is appropriate when the record shows that there is "no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Disputes concerning material facts are genuine where the evidence is such that a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In deciding whether genuine issues of material fact exist, the court construes all facts in a light most favorable to the non-moving party and draws all reasonable inferences in favor of the non-moving party. See id. at 255, 106 S.Ct. 2505. However, neither the "mere existence of some alleged factual dispute between the parties," id. at 247, 106 S.Ct. 2505, nor the existence of "some metaphysical doubt as to the material facts," Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986), will defeat a motion for summary judgment. Michas v. Health Cost Controls of Illinois, Inc., 209 F.3d 687, 692 (7th Cir.2000).
The moving party "bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact." Celotex, 477 U.S. at 323, 106 S.Ct. 2548. The party seeking summary judgment on a claim on which the non-moving party bears the burden of proof at trial may discharge its burden by showing an absence of evidence to support the non-moving party's case. Id. at 325, 106 S.Ct. 2548.
Summary judgment is not a substitute for a trial on the merits, nor is it a vehicle for resolving factual disputes. Waldridge v. Am. Hoechst Corp., 24 F.3d 918, 920 (7th Cir.1994). Thus, after drawing all reasonable inferences from the facts in favor of the non-movant, if genuine doubts remain and a reasonable fact-finder could find for the party opposing the motion, summary judgment is inappropriate. See Shields Enter., Inc. v. First Chicago Corp., 975 F.2d 1290, 1294 (7th Cir.1992); Wolf v. City of Fitchburg, 870 F.2d 1327, 1330 (7th Cir.1989). But if it is clear that a plaintiff will be unable to satisfy the legal requirements necessary to establish her case, summary judgment is not only appropriate, but mandated. See Celotex, 477 U.S. at 322, 106 S.Ct. 2548; Ziliak v. AstraZeneca LP, 324 F.3d 518, 520 (7th Cir.2003). Further, a failure to prove one essential element "necessarily renders all other facts immaterial." Celotex, 477 U.S. at 323, 106 S.Ct. 2548.
Australian Gold argues first in its motion for summary judgment that any claim MDG has brought relating to South Africa and the UAE is foreclosed because no contract was ever formed as to either territory.6 Under Indiana law, "the existence or nonexistence of a contract turns on whether material...
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