DIVISION SIX SPORTS, INC. v. THE FINISH LINE, INC. OF DELAWARE

Filing 72

ORDER - denying 68 Motion to Alter or Amend Judgment ; Division Six has not clearly established a manifest error of law, and because its argument for reconsideration could have been raised earlier but was not, the Motion to Alter or Amend Judgment is DENIED. *** SEE ORDER ***. Signed by Judge Sarah Evans Barker on 12/12/2018. (CKM)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
DIVISION SIX SPORTS, INC.,
Plaintiff,
v.
THE FINISH LINE, INC. OF DELAWARE,
N/K/A THE FINISH LINE, INC.,
Defendants.

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No. 1:17-cv-03879-SEB-MJD

ORDER ON PLAINTIFF’S MOTION TO ALTER OR AMEND JUDGMENT
(DKT. 68)
Plaintiff (“Division Six”) sued Defendant (“Finish Line”) for breach of contract.
We granted Finish Line’s motion to dismiss the complaint for failure to state a claim on
which relief could be granted on the grounds that no contract bound the parties at the time
of Finish Line’s alleged breach, Dkt. 65 (“Order”), and entered final judgment. Dkt. 66.
Now before the Court is Division Six’s timely Motion to Alter or Amend Judgment, Dkt.
68, under Federal Rule of Civil Procedure 59(e). For the reasons below, the motion is
denied.
Standard of Decision
“A Rule 59(e) motion will be successful only where the movant clearly
establishes: ‘(1) that the court committed a manifest error of law or fact, or (2) that newly
discovered evidence precluded entry of judgment.’” Cincinnati Life Ins. Co. v. Beyrer,
722 F.3d 939, 954 (7th Cir. 2013) (quoting Blue v. Hartford Life & Accident Ins. Co., 698
F.3d 587, 598 (7th Cir. 2012)). Rule 59(e) “‘does not provide a vehicle for a party to
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undo its own procedural failures, and it certainly does not allow a party to introduce new
evidence or advance arguments that could and should have been presented to the district
court prior to the judgment.’” Id. (quoting Bordelon v. Chi. Sch. Reform Bd. of Trs., 233
F.3d 524, 529 (7th Cir. 2000)). Disposing of a Rule 59(e) motion is an exercise of the
district court’s sound discretion. Id. at 953 (citing Harrington v. City of Chicago, 433
F.3d 542, 546 (7th Cir. 2006)).
Analysis
We recite the relevant contractual provisions for reference but otherwise assume
the parties’ familiarity with the Order:
[PARAGRAPH 9] TERM OF AGREEMENT
The term of this Agreement shall be eighteen months (18)
commencing on March 1, 2001 (the Effective Date). The term
may be extended by the written agreement of the parties prior
to the expiration of the term or any extension thereof. If
within six (6) months prior to the end of the term, Finish Line
shall receive a bona fide, arm’s length written offer from any
third party to purchase the same or similar Finish Line
Products that Division Six Sports is purchasing under the
terms of this Agreement, then Division Six Sports shall have
a right of first refusal for an additional eighteen (18) month
period to extend this Agreement with Finish Line upon
materially identical consideration and terms set forth in such
third party’s written offer. . . . If Finish Line does not receive
a bona fide, arm’s length written offer at any time within six
months of the end of the term, then this Agreement will
automatically renew for an additional eighteen (18) month
term.
Dkt. 7 Ex. A, at 7–8 (internal subdivision omitted) (“the 2001 Agreement”).
The following amendment to the 2001 Agreement was offered by Finish Line by
letter and executed by Division Six:

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CONTRACT EXTENSION
Finish Line would be amenable to adding language to
Paragraph 9 of the Purchase Agreement to reflect a three year
(3) extension of the agreement (ie. through August 31, 2005).
In addition, should Finish Line not receive a bona fide, arm’s
length written offer from any third party at any time within
six months of the end of said extended term, then the
Agreement will automatically renew for an additional three
(3) year extension.
Dkt. 7 Ex. C, at 2 (“the 2002 Amendment”). All umodified terms remained in force and
were reaffirmed. Id.
The 2001 Agreement, as amended by the 2002 Amendment, was again amended
as offered by Finish Line by letter and executed by Division Six:
TERM EXTENSION
Finish Line would be amenable to adding language to
Paragraph 9 of the Purchase Agreement to reflect a new five
(5) year term extension, commencing September 1, 2008 and
ending December 31, 2013, (“Third Amendment Extended
Term”) unless sooner terminated pursuant to any provisions
of the Governing Agreements.
Dkt. 7 Ex. E, at 1 (“the 2008 Amendment”). All umodified terms remained in force and
were reaffirmed. Id.
The Order summarized the parties’ arguments on Finish Line’s motion to dismiss
as follows:
Finish Line argues that the 2001 Agreement, as amended by
the 2002 and 2008 Amendments, unambiguously expired on
December 31, 2013. Thus, it cannot be liable for breach of
contract in 2014 because in 2014 there was no contract for it
to breach.
Division Six counters that “the parties bargained for a
mutually beneficial process that would only end if Finish Line
got a deal from a third party that Division Six elected not to
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match. In essence, the [2001] Agreement was never going to
simply expire.” The Agreement would continually renew of
its own force for additional eighteen-month terms unless and
until Division Six declined to exercise an accrued right of
first refusal; the 2002 and 2008 Amendments only varied the
duration of the automatic extensions. . . . As a fallback
position, Division Six maintains that the 2001 Agreement is
ambiguous on this point.
Order 4–5 (citation omitted). We rejected Division Six’s perpetual-renewal argument and
adopted Finish Line’s position for substantially the reasons advanced by it. Id. at 6–8.
Division Six now contends that we committed manifest legal error (Division Six
characterizes it as factual error, but the Order perforce addressed only legal questions) in
failing to draw a logically necessary conclusion from the Order’s premises: Division Six
“assert[s] that [the Order] failed to consider the Agreement as a whole based on the
Court’s correct observation that the amendments to the Agreement added to the
Agreement[,]” Mot. 5, such that, “[a]bsent an unmet bona fide offer, the Agreement
automatically renewed [on December 31, 2013,] for an additional three-year extension, to
and including December 31, 2016.” Id. at 6.
Division Six now understands “adding language,” as that phrase is used in the
2002 and 2008 Amendments, to mean “deleting old language and adding new language in
its place,” producing the following redlined contract terms with the source of the
alteration noted in brackets:
The term of this Agreement shall be eighteen months (18)
commencing on March 1, 2001 (the Effective Date) [deleted
by the 2002 Amendment] extended by three (3) years (i.e.,
through August 31, 2005) [added by the 2002 Amendment
then deleted by the 2008 Amendment] extended by five (5)
years, commencing September 1, 2008 and ending December
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31, 2013, (“Third Amendment Extended Term”) unless
sooner terminated pursuant to any provisions of the
Governing Agreements [added by the 2008 Amendment]. The
term may be extended by the written agreement of the parties
prior to the expiration of the term or any extension thereof. If
within six (6) months prior to the end of the term, Finish Line
shall receive a bona fide, arm’s length written offer from any
third party to purchase the same or similar Finish Line
Products that Division Six Sports is purchasing under the
terms of this Agreement, then Division Six Sports shall have
a right of first refusal for an additional eighteen (18) month
[deleted by the 2002 Amendment] three (3) year [added by
the 2002 Amendment] period to extend this Agreement with
Finish Line upon materially identical consideration and terms
set forth in such third party’s written offer. . . . If Finish Line
does not receive a bona fide, arm’s length written offer at any
time within six months of the end of the term, then this
Agreement will automatically renew for an additional
eighteen (18) month term [deleted by the 2002 Amendment]
three (3) year extension [added by the 2002 Amendment].
See Mot. 2–3.
Two conclusions follow. First, Division Six has not pointed to any manifest error
of law. If “adding” is given its plain and ordinary meaning (as it must be under Indiana
contract-interpretation principles, Reuille v. E.E. Brandenberger Constr., Inc., 888
N.E.2d 770, 771 (Ind. 2008), for the amending language is itself contractual, see Hamlin
v. Steward, 622 N.E.2d 535, 539 (Ind. Ct. App. 1993)), this produces the following
contract terms, which read quite differently than does Division Six’s redlined version:
The term of this Agreement shall be eighteen months (18)
commencing on March 1, 2001 (the Effective Date). The term
may be extended by the written agreement of the parties prior
to the expiration of the term or any extension thereof. If
within six (6) months prior to the end of the term, Finish Line
shall receive a bona fide, arm’s length written offer from any
third party to purchase the same or similar Finish Line
Products that Division Six Sports is purchasing under the
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terms of this Agreement, then Division Six Sports shall have
a right of first refusal for an additional eighteen (18) month
period to extend this Agreement with Finish Line upon
materially identical consideration and terms set forth in such
third party’s written offer. . . . If Finish Line does not receive
a bona fide, arm’s length written offer at any time within six
months of the end of the term, then this Agreement will
automatically renew for an additional eighteen (18) month
term.
The term of the Agreement is extended for three (3) years
(i..e, through August 31, 2005). In addition, should Finish
Line not receive a bona fide, arm’s length written offer from
any third party at any time within six months of the end of
said extended term, then the Agreement will automatically
renew for an additional three (3) year extension.
The term of the Agreement is extended for five (5) years,
commencing September 1, 2008, and ending December 31,
2013, (“Third Amendment Extended Term”) unless sooner
terminated pursuant to any provisions of the Governing
Agreements.
See Dkt 7 Ex. A, at 7–8; Dkt. 7 Ex. C, at 2; Dkt. 7 Ex. E, at 1. Common sense, buttressed
by the principle expressio unius exclusio alterius, dictates that the 2001 Agreement as
finally amended, when read in this way, contains no automatic renewal provision.
In other words, Division Six has not persuaded us that it was manifestly wrong not
to interpret “adding language” as “deleting and in its place adding language.” Indeed,
when the parties intended to strike and replace language in the 2001 Agreement, they
clearly expressed that intent, as in this example from the 2008 Amendment: “Effective
October 1, 2008 and continuing through the remainder of the Third Amendment
Extended Term, Schedule 2 of the Governing Agreements shall be deleted in its entirety,
and the following rates shall apply[.]” Dkt. 7 Ex. E, at 2.

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Second, Division Six’s argument for reconsideration could and should have been
presented in opposition to Finish Line’s motion to dismiss. Division Six characterizes its
argument as a plea to “take the Court’s prior analysis to its natural and full conclusion.”
Reply Br. 3. However, as indicated above, Division Six has not persuaded us that its
interpretation of the 2001 Agreement necessarily, or even probably, flows from the
Order. Rather, Division Six’s argument for reconsideration is simply an alternative
reason for rejecting dismissal, the contours of which ought to have been clear, at the
latest, when Finish Line filed its brief in support of its motion to dismiss, arguing clearly
and cogently that “no automatic renewal right existed following the term” provided for
by the 2008 Amendment. Dkt. 23, at 9. In opposition to Finish Line’s motion, Division
Six chose to stand on its perpetual-renewal argument—and only that argument. But there
was then no bar whatsoever to making the argument Division Six makes now: that, even
if the 2001 Agreement did not renew itself in perpetuity, still the parties were bound by
2001 Agreement as amended by the 2008 Amendment in 2014, when Finish Line ceased
performing under the contract.
On Finish Line’s motion to dismiss, the parties contested the meaning of “the
term” as used in the 2001 Agreement. See Order 6. Now Division Six wishes to shift the
grounds of contestation to the meaning of “adding” as used in the 2002 and 2008
Amendments. It could and should have done so in the first instance.

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Conclusion and Order
Because Division Six has not clearly established a manifest error of law, and
because its argument for reconsideration could have been raised earlier but was not, the
Motion to Alter or Amend Judgment is DENIED.
IT IS SO ORDERED.

12/12/2018
Date: _______________

_______________________________
SARAH EVANS BARKER, JUDGE
United States District Court
Southern District of Indiana

Distribution:
Andrew W. Hull
HOOVER HULL TURNER LLP
[e-mail]
Ryan L. Isenberg
ISENBERG & HEWITT, P.C.
[e-mail]
Cathleen Marie Shrader
BARRETT & MCNAGNY LLP
[e-mail]
Christopher D. Wagner
HOOVER HULL TURNER LLP
[e-mail]

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