Payne v. Forest River, Inc.

• Decision Date: 12 November 2015
• Docket Number: CIVIL ACTION No. 3:13-cv-00679-JWD-RLB
• Parties: WENDELL PAYNE; CHRIS RIDDLE; XCURSION MARKETING GROUP, L.L.C., Plaintiffs, v. FOREST RIVER, INC. Defendant.
• Court: U.S. District Court — Middle District of Louisiana

WENDELL PAYNE; CHRIS RIDDLE; XCURSION MARKETING GROUP, L.L.C., Plaintiffs, v. FOREST RIVER, INC. Defendant.

CIVIL ACTION No. 3:13-cv-00679-JWD-RLB

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF LOUISIANA

November 12, 2015

ORDER ON DEFENDANT'S MOTION FOR PARTIAL SUMMARY JUDGMENT

I. INTRODUCTION

Before the Court is the Motion for Partial Summary Judgment ("Partial MSJ"), filed by Forest River, Inc. ("Defendant" or "Forest River"), asking this Court to dismiss the claims for breach of contract, claims predicated on the existence of a joint venture under Louisiana law, advanced by Mr. Wendell Payne ("Payne") and Mr. Chris Riddle ("Riddle") ("Individual Plaintiffs") as well as Xcursion Marketing Group, L.L.C. ("Xcursion Marketing") (collectively, "Plaintiffs"), the company founded by Payne and Riddle in 2011, pursuant to Federal Rule of Civil Procedure 56.¹ Defendant's substantive arguments appear in the Memorandum in Support of Motion for Partial Summary Judgment ("Supporting Memorandum"), (Doc. 55-4), and the Reply Memorandum in Support of Motion for Partial Summary Judgment ("Reply Memorandum"), (Doc. 65). Plaintiffs' arguments are put forth in the Plaintiffs' Memorandum inOpposition to Defendant's Partial Motion for Summary Judgment ("Opposition"), (Doc. 59), and Plaintiffs' Sur-Reply in Opposition to Defendant's Partial Motion for Summary Judgment ("Sur-Reply"), (Doc. 68). For the reasons more fully set forth below, the Court determines that Defendant has not satisfied the requirements erected by Rule 56. As such, it DENIES Defendant's Partial MSJ.

II. FACTUAL & PROCEDURAL BACKGROUND

A. Uncontested Facts

Officially incorporated on November 27, 1995, as an Indiana entity but a wholly owned subsidiary of Berkshire Hathaway, Inc., since September 2005, (see, e.g., Doc. 1 ¶ 4(d) at 32; Doc. 2), Defendant's multiple divisions manufacture numerous types of recreational and commercial vehicles under a variety of brands, (See, e.g., Doc. 59 at 10). One such division is "Forest River Marine, Inc."; its president and general manager is Mr. Thomas Ray McCuddy ("McCuddy"). (Doc. 55-3 ¶ 2 at 1; Doc. 1-2 at 45.) One such brand of boats is "Xcursion Pontoons" ("Xcursion"). FOREST RIVER, INC., http://www.forestriverinc.com/#&panel1-3 (last visited on Nov. 10, 2015). Formally founded on February 11, 2011, by Riddle and Payne, Xcursion Marketing is a Louisiana limited liability corporation domiciled at 11314 Sheets Road, Gonzalez, Louisiana, which filed its last required report on March 25, 2013. (See Doc. 1-1 ¶ 2 at 1; Doc. 59 at 3.) Since February 2011, Payne has served as its registered agent, and the Individual Plaintiffs have been its only two officers.

In January 2011, the Individual Plaintiffs devised the design for the Xcursion line. (Doc. 1-1 ¶ 2 at 1; see also Doc. 11 at 1; Doc. 59 at 19; Doc. 59-2 at 20.) Having thereafter "perfect[ed]" their blueprint, the Individual Plaintiffs met with Forest River's McCuddy inMiddlebury, Indiana, either by telephone or in person. (Doc. 1-1 ¶ 3 at 1; see also Doc. 11 at 1.) Soon afterward, in Ascension Parish, Louisiana, Defendant and Plaintiffs finalized their "verbal" contract. (Doc. 1-1 ¶ 4 at 1-2; see also, e.g., Doc. 11 at 1; Doc. 55-3 ¶ 5 at 1; Doc. 55-4 at 3.) By choice,² the Parties never reduced any contractual provision to writing. (See, e.g., Doc. 55-3 ¶¶ 6-7 at 2; Doc. 55-4 at 9-11, 14; Doc. 59 at 3.)

Still, this agreement's outline is clear: while Forest River acquired the rights to Xcursion, the Individual Plaintiffs were obligated to market Xcursion and entitled to four percent (4%) of the total sales of Xcursion pontoons. (Doc. 1-1 ¶ 4 at 1-2; see also Doc. 11 at 1.) With this arrangement set, the manufacturing and the marketing of the Xcursion boats commenced in May 2011. (Doc. 1-1 ¶ 5 at 2; see also, e.g., Doc. 11 at 2; Doc. 18-1 at 2; Doc. 55-3 ¶ 9 at 2; Doc. 55-4 at 4; Doc. 59-2 at 39.) Per a series of checks endorsed by Forest River and paid to the order of Xcursion Marketing, the latter's commission of 4% netted Riddle and Payne a total payment of $8,881.24 for July 2011, $19,772 for August 2011, $18,892 for September 2011, $41,804.72 for October 2011, $40,249.60 for November 2011, $21,349.92 for December 2011, $36,512.08 for January 2012, $35,215.24 for February 2012, $51,748.98 for March 2012, $80,105.84 for April 2012, $96,620.24 for May 2012, $106,518.64 for June 2012, and $84,793.56 for July 2012. (Doc. 1-2 at 12, 14, 16, 18, 20, 22, 29, 31; see also Doc. 55-4 at 5.) During these months, on at least one occasion, Defendant publicly described Harry Riddle, Riddle's father, (Doc. 59-2 at 89), as its "representative" for Texas, Arkansas, Oklahoma, and New Mexico. (Doc. 1-2 at 38.) This same publication held out Riddle as both the "Vice President" of "Xcursion Pontoons" and the "Vice President of Sales" for Forest River. (Id. at 38, 45.)

In the summer of 2012, citing the Xcursion line's unprofitability, Forest River attempted to renegotiate the Individual Plaintiffs' four percent commission to some lower value more consistent with its prior practice.³ (Doc. 1-1 ¶¶ 8-9 at 2; see also, e.g., Doc. 55-3 ¶ 11 at 3; Doc. 55-4 at 4.) Acrimony followed.⁴ (Doc. 1-1 ¶ 10 at 2; see also Doc. 11 at 2.) The Parties met in July 2012 in Middlebury, Indiana, in an attempt to dissolve this rancor. (Doc. 55-4 at 12.) Upon these negotiations' failure, Defendant terminated the contract in August 2012 and sent off a final check. (Doc. 1-1 ¶ 11 at 2-3; see also Doc. 55-3 ¶ 10 at 2; Doc. 55-4 at 2-3, 12-13.) Through November 7, 2015, moreover, Defendant has continued to sell Xcursion. FOREST RIVER MARINE, INC., http://www.xcursionpontoon.com (last visited on Nov. 10, 2015).

B. Contested Factual Issues

Although the Parties agree on the foregoing, Plaintiffs and Defendant disagree on two other issues. (See, e.g., Doc. 11 at 4-5; Doc. 55-4 at 1.)

First, the kind of legal relationship brought about by the Parties' verbal contract is contested. In Plaintiffs' view, the Parties established "a joint venture," a special type of quasi-partnership arrangement well-mined by a multitude of Louisiana courts. (Doc. 1-1 ¶ 4 at 1-2, ¶ 7 at 2; see also Doc. 11 at 3.) Conversely, Defendant refuses to characterize the Parties' relationship in these precise terms. (Doc. 14 at 4, ¶ 21 at 5; see also Doc. 55-3 ¶ 8 at 2.) Instead, Defendant describes the underlying contract as no more than "a sales commission agreement." (Doc. 55-3 ¶ 4 at 1, ¶ 10 at 2; see also, e.g., Doc. 65 at 2, 4.)

Second, the financial health of the Xcursion line is disputed. According to Plaintiffs, "Xcursion became an enormous success," "yield[ing] approximately $20,000,000 in gross sales" in its first year. (Doc. 1-1 ¶ 6 at 2.) By their reckoning, "[f]or the period of January 1, 2012 - December 31, 2012, Forest River slated itself to manufacture 900 boats at an approximate cost of $21,500.00 each." (Id. ¶ 7 at 2.) These sales "brought in substantial profits for [D]efendant," which is "in the process of attempting to sell the Xcursion line because of its profitability and success." (Id. ¶ 13 at 3.) In contrast, Defendant contends that "[b]etween April 2011 and April 2013, the business operations related [to the] . . . production, sale, and marketing of Xcursion pontoon boats operated at a net loss" in excess of $1,400,000. (Doc. 14 ¶¶ 19-20 at 5; see also Doc. 1-1 ¶ 13 at 3.) In particular, according to McCuddy, the Xcursion line has "lost a considerable amount of money" and possessed no more than the potential to "become a marginally profitable product line in 2013/2014." (Doc. 1-1 ¶ 13 at 3; see also Doc. 14 ¶¶ 22-23 at 5; Doc. 55-4 at 5.)

C. Procedural History

On April 11, 2013, Plaintiffs filed a complaint in the Twenty-Third Judicial District Court, located in the Parish of Ascension, of the State of Louisiana. (Doc. 1-2 at 6.) In October of 2013, Defendant sought to remove that action to this Court. (Doc. 1 at 1.) While Plaintiffs opposed removal, (Doc. 4), this Court allowed it on March 20, 2014. (Doc. 8.) As authorized by order, (Doc. 13), in response to Defendant's motion for leave to file an amended answer, (Doc. 10), the Amended and Restated Answer with Counter Claim by Forest River was tendered on May 21, 2014, (Doc. 14). Plaintiffs filed the Answer to Counter Claim Filed by Forest River on July 15, 2014. (Doc. 17.) After a flurry of discovery-related motions and orders, Defendantsubmitted the Partial MSJ on May 22, 2015. (Doc. 55.) Having received an extension, (Doc. 57), the Plaintiffs delivered the Opposition on June 22, 2015, (Doc. 59). The Reply Memorandum arrived fourteen days later. (Doc. 65.) Plaintiffs' Sur Reply was docketed on July 9, 2015. (Doc. 68.)

D. Parties' Arguments

1. Defendant's Position

Defendant makes two distinct arguments to support its ultimate conclusion: "The [P]laintiffs are not entitled to any additional commissions (or other amounts) based on the sales contract or any other agreement." (Doc. 55-4 at 2.)

The first line of reasoning is grounded in Article 2024 of the Louisiana Civil Code:⁵ "[B]ecause the sales contract had unspecified duration, it could be terminated by either party, with proper notice." (Doc. 55-4 at 2.) The Parties' contract, Defendant explains, falls into this Article's definition of an accord of "an unspecific duration," for "the term[s] of the agreement" remain "uncertain and undeterminable based on the intent of the [P]arties or the circumstances related to the contract." (Doc. 55-4 at 9 (citing Schultz v. Hill, 840 So. 2d 641, 644-45 (La. Ct. App. 2003)).) Plaintiffs may have thought the agreement would be "perpetual," but "have no factual or legal basis to show that the [P]arties reached this agreement"; furthermore, this "subjective" belief was "never" communicated to Forest River. (Doc. 55-4 at 9, 10; see also Doc. 65 at 2-3.) So far, Plaintiffs have "not provided any evidence to meet . . . [their] burden" of proving "the [P]arties reached an agreement as to the ['pe...