Electrolux Home Prod v. Whitesell Corp
Filing
1445
ORDER granting 1419 Motion for Clarification. The Court concludes and iterates that there is no part remaining of Count III for payment of excess inventory to be asserted by Plaintiff Whitesell against any Defendant in the case. Signed by Chief Judge J. Randal Hall on 1/20/2021. (pts)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF GEORGIA
AUGUSTA DIVISION
'k
*
*
Plaintiff,
.Ji \ k
m\ JAN 20 p
5
WHITESELL CORPORATION,
'.nr
U.S. L
:
q q- q
JLErv,-
ui
J.
SO. u
CV 103-050
V.
*
ELECTROLUX HOME PRODUCTS, INC.,
HUSQVARNA, A.B., and HUSQVARNA
OUTDOOR PRODUCTS, INC.,
*
k
k
{
J
Defendants.
ORDER
The
relevant
contract between
the
parties for
purposes
of
this Order is the Strategic Partnership Agreement ("SPA") entered
into on December 14, 2000.
1. )
(Sec. Am. Compl., Doc. No. 578, Ex.
The SPA provided that the parties' supply relationship could
be terminated by any party after completion of the initial term of
their
relationship
if the terminating
party
provided
a
written
notice of termination not less than six months prior to the end of
such term.
(Id. 1 23.0.)
The time period between provision of a
notice of termination and the effective date of such termination
was called a
\v
phase-out period.
//
(Id. T 23.1)
During a phase-
out period, the parties had certain obligations to use good faith
and their best efforts to fully utilize the supplier's (Plaintiff
Whitesell Corporation's) product made for Defendants.
1
In Count III of the Second Amended Complaint, which is titled
\\
n
Breach
alleges
of
Contract (Failure
that
("Husqvarna")
Defendant
\\
to
Pay
For
Husqvarna
refused to take
all
Outdoor
of
//
required by Section 23.1 [of the SPA].
51. )
Inventory),
Whitesell
Products,
Inc.
Whitesell's Inventory as
(Sec. Am. Compl.,
145-
In its entirety. Count III alleges as follows:
1 146:
Section 23.1 of the [SPA] requires the parties
to cooperate in good faith to wind up and complete the
full utilization of Whitesell's inventory prior to the
end of the Phase-Out Period.
5 147:
Section 23.1 also requires EHP and [Husqvarna]
to take delivery and pay for all of Whitesell's inventory
during the Phase-Out Period.
1 148:
EHP and [Husqvarna] invoked Section 23.1 when
they sent their notices of termination in April 2008.
SI
149:
Though
EHP
ultimately
took
and
paid
for
substantially all of Whitesell's inventory of parts,
[Husqvarna] has refused to take all of Whitesell's
inventory as required by Section 23.1.
SI 150:
[Husqvarna's] failure and refusal to take and
pay for Whitesell's Inventory as required by Section
23.1 of the [SPA] constitutes a breach of its implied
covenant of good faith and fair dealing and O.C.G.A. §
11-1-203's statutory obligation of good faith in the
performance of the terms of the [SPA].
1 While only Defendant Electrolux Home Products, Inc. ("EHP") was
a signatory to the SPA, Defendant Husqvarna Outdoor Products, Inc.
became subject to the terms and conditions of the SPA when EHP
transferred its outdoor products division to Defendant Husqvarna,
A.B, which in turn transferred the business to Husqvarna Outdoor
Products, Inc.
2
SI 151: [Husqvarna's] failure and refusal to take and pay
for Whitesell's inventory as required by Section 23.1 of
the [SPA] has damaged Whitesell in a precise amount to
be determined at trial, interest, costs and attorney's
fees .
On
August
13,
2018,
Husqvarna
filed
a
motion
for
summary
judgment, claiming that as a matter of law it cannot be held liable
for its failure to pay for excess inventory related to the PhaseOut Period following its April 2008 notice of termination^ because
Whitesell intentionally lied about and failed to disclose its true
inventory
Ultimately,
position.
the
Court
agreed
and
Husqvarna's motion for summary judgment on March 25, 2020.
granted
(Doc.
No. 1401.)
At present, Husqvarna has returned to seek clarification that
the Court granted summary judgment with respect to the entirety of
Count III, and thus, no excess inventory claims remain in Count
III
for
Whitesell
to
assert
at
trial.
Whitesell
opposes
the
motion, explaining that the Court did not address or resolve its
claims for
unpaid excess inventory
occurring
after
November
1,
2008 against both Defendants Husqvarna and EHP.
This matter may be
resolved quickly and
Count III of the Second Amended Complaint.
with
reference to
The purpose of the
2 The notice of termination letter dated April 24, 2008 provided
written notice that Husqvarna intended to terminate the supply
agreement with Whitesell on November 1, 2008. (See Order of Mar.
25, 2020, Doc. No. 1401, at 4.)
Accordingly, the "Phase-Out
Period" subject to Husqvarna's motion for summary judgment was
April 24, 2008 to November 1, 2008.
3
heightened pleading standard announced by the Twombly/Iqbal cases^
is to ensure that a plaintiff pleads sufficient facts to give fair
notice to the opposing party that there is a plausible and factual
basis for the claim asserted.
The facts provided in Count III are
that Defendants triggered a phase-out period when they sent notices
of
termination
in
April
2008;
that
EHP
took
Whitesell's inventory of parts but Husqvarna
did
and
paid
for
not; and that
Husqvarna therefore breached 23.1 of the SPA by failing to take
and pay for Whitesell's inventory.-^
Husqvarna moved for summary
judgment based upon Whitesell's material breach (non-performance)
of its phase-out obligations related to the Phase-Out Period ending
on
November
Complaint.
1,
2008,
the
Whitesell
one
never
identified
in
announced,
the
Second
clarified,
Amended
or
even
mentioned that this Phase-Out Period was not the only phase-out
period relevant to its inventory claim.
Certainly, there are no
facts in Count III related to any other notice of termination or
failure of either Defendant to purchase any other inventory during
any
other
phase-out
period.
And,
to
reiterate
what
the
Court
concluded in its March 25, 2020 Order, there are no facts through
3 Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) , and Ashcroft
V. Iqbal, 556 U.S. 662 (2009).
4 Indeed, these are the same facts set forth in Whitesell's Facts
Common to All Counts section of the Second Amended Complaint, which
is titled "[Husqvarna] Ignores Its Obligations to Purchase
Inventory." (See Sec. Am. Compl. M 115-28 (identifying only the
Phase-Out Period ending on November 1, 2008).)
4
which EHP could be held liable for failure to pay for inventory
since Whitesell states that EHP met its phase-out obligation.^
In short, Count III of the Second Amended Complaint only put
Husqvarna on notice that it failed to pay for excess inventory
from one termination and one phase-out period created by its April
2008 notice of termination.
In fact, the case has been litigated
in this manner, which may be seen in Defendants' discovery requests
that relate only to the Phase-Out Period ending November 1, 2008,
and in its motion for summary judgment and Whitesell's responses
thereto.
To insert an unidentified phase-out period's inventory
into the case at this late date would be extremely prejudicial to
Defendants and is not supported by the allegations in the Second
Amended Complaint.®
Upon
the
foregoing.
Defendant
Husqvarna's
clarification (doc. no. 1419) is GRANTED.
motion
for
The Court concludes and
iterates that there is no part remaining of Count III for payment
5 (See Order of Mar. 25, 2020, at 1-2 n.l (finding that Count III
only alleges that Husqvarna failed to pay for excess inventory and
that, in any event, Whitesell waived any claim against EHP by
failing to raise it in its response and sur-reply to the motion
for summary judgment).)
® Whitesell would have the Court read additional excess inventory
claims into Paragraphs 150 and 151 of the Second Amended Complaint.
Those paragraphs, however, must be read in context. They are but
the claim of breach and claim for damages related to the PhaseOut Period identified in the paragraphs immediately preceding.
5
of excess inventory to be asserted by Plaintiff Whitesell against
any Defendant in the case.
ORDER ENTERED at Augusta, Georgia, this
c>Z
of January,
2021.
J. rANIJAL'HALL, CHIEF JUDGE
UNITED/STATES DISTRICT COURT
^OtfTmRN DISTRICT OF GEORGIA
6
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?