Neb. Furniture Mart, Inc. v. Guardsman U.S. LLC
| Decision Date | 22 July 2022 |
| Docket Number | 8:21-CV-192 |
| Parties | NEBRASKA FURNITURE MART, INC., Plaintiff, v. GUARDSMAN U.S. LLC, Defendant. |
| Court | U.S. District Court — District of Nebraska |
MEMORANDUM AND ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT
Nebraska Furniture Mart, Inc., (NFM) has sued Guardsman U.S. LLC (Guardsman) claiming that Guardsman owes it money under a “Retailer Agreement.” In the alternative, NFM seeks application of the doctrines of equitable estoppel and promissory estoppel to require Guardsman to pay the money NFM believes it is owed. Both parties have moved for summary judgment. Filing 24; Filing 27. For the reasons stated herein, the Court grants Guardsman's Motion and denies NFM's Motion.
NFM is a Nebraska corporation that operates a large furniture store in Omaha, Nebraska and has expanded to operate stores in several cities in the Midwest and Texas. Filing 25 at 3.[1]Along with selling furniture, NFM partners with a third-party vendor to offer customers protection plans for accidental stains and damage. Filing 25 at 3. Up until December 31, 2020, NFM's third-party vendor for furniture protection plans was Guardsman, a Delaware limited liability company. Filing 25 at 3.
On November 15, 2018, NFM and Guardsman entered into a “Retailer Agreement.” Filing 26-1 at 1-5. The Retailer Agreement provided for a term from November 15 2018, to December 31, 2020; mandated that NFM would only offer Guardsman protection plans; and outlined the terms under which NFM would sell Guardsman protection plans to customers and how Guardsman would handle claims. Filing 26-1 at 1-5. The Retailer Agreement also contained a survival clause providing, “Each term of this Agreement which expressly survives expiration or termination of this Agreement, or otherwise where the context reasonably requires, shall survive expiration or termination of this Agreement.” Filing 26-1 at 5. The Retailer Agreement further stated that it could only be amended by a written agreement signed by both parties. Filing 26-1 at 5. Contemporaneous with the Retailer Agreement, both parties executed a “POS Addendum,” which states that it is part of the Retailer Agreement. Filing 26-1 at 9.
This suit arises from a dispute over a section in the Retailer Agreement titled “Trade Program,” which states in full:
Guardsman offers an annual Trade Program in the amount of 5% of the cost of plans purchased by the Retailer [(NFM)]. The percentage amount is based on continuing sales in all categories (fabric, leather, hard surface case goods, area rugs, outdoor furniture, Gold, window treatment, carpet, adjustable bed and furniture care products). The Trade Program is subject to change if NFM changes vendors in any of the protection categories. The trade program dollars are to be re-invested in the Guardsman protection program to help increase the overall close ratio performance of the program. The Trade Program is paid annually and will not be issued if Retailer has a past due balance. Trade programs are subject to reevaluation on an annual (calendar year) basis and in the event any changes are made to the Trade Program, Guardsman agrees to provide retailer with notice detailing the proposed change(s) at least 30 days in advance of any change going into effect. In the event of a change to the Trade Program, within 20 days after Retailer Receiving notice of a change, Retailer may terminate this Agreement without penalty. If retailer Terminates this agreement subject to this section, the Agreement shall terminate in 90 days post Retailers [sic] election to terminate.
Filing 26-1 at 8 (emphasis added). Pursuant to the trade program governed by the above section, in January of 2020, Guardsman paid NFM five percent of the net sales of its protection plans purchased by NFM's customers in 2019 by check, which NFM used to fund incentives to its employees to encourage them to sell more Guardsman protection plans in 2020. Filing 25 at 6. After the expiration of the Retailer Agreement on January 1, 2021, NFM discontinued selling Guardsman protection plans, causing Guardsman to refuse to pay NFM five percent of the net sales of its protection plans made in 2020. Filing 25 at 3-6. This dispute concerns whether Guardsman must pay five percent of the net sales of its protection plans made in 2020 to NFM, which the parties agree equals $330,971.16. Filing 25 at 6.
During the term of the Retailer Agreement, Guardsman's Vice President of Sales, Kerry Lawless, signed two documents on Guardsman's behalf. On March 29, 2019, Lawless signed a “Vendor Participation Agreement,” which was effective from January 1, 2019, to December 31, 2019. Filing 26-3 at 1. The Vendor Participation Agreement is printed on NFM letterhead and states that Guardsman will give NFM “Anniversary Support” in the amount of $110,000 to be paid quarterly in $27,500 increments and a “Volume Rebate” in the amount of a “5% rebate based on net receiving.” Filing 26-3 at 1. According to NFM, the rebate delineated in the Vendor Participation Agreement refers to the five percent reimbursement provided in the “Trade Program” section of the Retailer Agreement and required Guardsman to pay an unconditional rebate to NFM. Filing 28 at 8, 18. Guardsman disputes the relevancy of the Vendor Participation Agreement because it is not an enforceable amendment or modification to the Retailer Agreement and is separate from the “Trade Program.” Filing 32 at 3, 10.
Additionally, on March 19, 2020, Lawless signed a document titled “Funding Program,” which has an effective date from January 1, 2020, to December 31, 2020. Filing 26-2 at 1-2. Similar to the Vendor Participation Agreement, the Funding Program document is printed on NFM letterhead and states that Guardsman will provide NFM with “Anniversary Support” in the amount of $125,000, to be paid quarterly in $31,250 increments, and a “Rebate Amount” of “5%.” Filing 26-2 at 1. Directly above the signature line, the Funding Program document states, “By signing this form, you confirm that all information stated above is accurate and will be upheld via the Vendor Master Agreement.” Filing 26-2 at 2. NFM argues that the Funding Program document “confirmed” Guardsman's obligation to pay the five percent of the net sales of Guardsman protection plans to NFM as an unconditional “rebate” for the year 2020. Filing 28 at 7, 14-16. Guardsman disputes the relevancy of the Funding Program document because it is not an enforceable agreement and did not amend the Retailer Agreement. Filing 32 at 1-2, 9-14.
On May 17, 2021, NFM filed suit against Guardsman, claiming that Guardsman breached the Retailer Agreement by refusing to pay NFM five percent of the net sales of the Guardsman protection plans for 2020. Filing 1. NFM also states in its Complaint that, by signing the Vendor Participation Agreement and the Funding Program document, Guardsman is equitably estopped from denying that the payment under the Trade Program is an unconditional rebate that must be paid to NFM. Filing 1 at 6-7. Alternatively, NFM also alleges that the doctrine of promissory estoppel, in conjunction with Guardsman signing the Vendor Participation Agreement and the Funding Program document, requires Guardsman to pay NFM five percent of the net sales of the Guardsman protection plans for 2020. Filing 1 at 7-8. On March 25, 2022, both parties cross-moved for summary judgment. Filing 24; Filing 27.
Under Rule 56 of the Federal Rules of Civil Procedure, “[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. (a). “ʻOnly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.'” Rusness v. Becker Cnty., 31 F.4th 606, 614 (8th Cir. 2022) (quoting Doe v. Dardanelle Sch. Dist., 928 F.3d 722, 725 (8th Cir. 2019), in turn quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). “The moving party bears the burden of showing the absence of a genuine dispute.” Glover v. Bostrom, 31 F.4th 601, 603 (8th Cir.) (citing Fed.R.Civ.P. 56(a)), reh'g denied, No. 20-2884, 2022 WL 1564097 (8th Cir. May 18, 2022). The party opposing summary judgment must “cit[e] particular materials in the record” or show that the “materials cited do not establish the ... absence of a genuine dispute.” Fed.R.Civ.P. 56(c)(1). On a motion for summary judgment, “a district court should ‘not weigh the evidence, make credibility determinations, or attempt to discern the truth of any factual issue.'” Avenoso v. Reliance Standard Life Ins. Co., 19 F.4th 1020, 1024 (8th Cir. 2021) (quoting Great Plains Real Est. Dev., L.L.C. v. Union Cent. Life Ins., 536 F.3d 939, 943-44 (8th Cir. 2008)). Instead, the court must view the evidence in the light most favorable to the non-moving party and afford that party all reasonable inferences supported by the evidence. Grinnell Mut. Reinsurance Co. v. Dingmann Bros. Constr. of Richmond, Inc., 34 F.4th 649, 652 (8th Cir. 2022); Pearson v. Logan Univ., 937 F.3d 1119, 1124 (8th Cir. 2019). “The Supreme Court's ‘repeated' admonition is that ‘the plaintiff, to survive the defendant's [summary judgment] motion, need only present evidence from which a jury might return a verdict in his favor.'” Doe by next friend Rothert v. Chapman, 30 F.4th 766, 772 (8th Cir. 2022) (quoting Anderson, 477 U.S. at 257).
Before the Court can address the parties' arguments in support of their Motions for Summary Judgment on NFM's breach-of-contract claim, it must first determine which states' substantive law governs this dispute....
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