AGV Sports Group, Inc. v. LeMans Corporation
MEMORANDUM OPINION. Signed by Judge George Levi Russell, III on 8/12/13. (mps, Deputy Clerk)
AGV Sports Group, Inc. v. LeMans Corporation
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
AGV SPORTS GROUP, INC.
Civil Action No. GLR-11-16
THIS MATTER is before the Court on Plaintiff AGV Sports
Group, Inc.’s (“AGVSG”) Motion for Partial Summary Judgment (ECF
(“LeMans”) for breach of contract, or, in the alternative, under
a theory of promissory estoppel.
In particular, AGVSG asks this
Court to enter partial summary judgment on two issues, affirming
distribution agreement between December 14, 2006, and August 31,
See Local Rule 105.6 (D.Md. 2011).
for Partial Summary Judgment will be denied because disputed
material facts exist as to whether an exclusive distribution
AGVSG is a Maryland corporation that designs, distributes,
and licenses AGV Sport and AGVSPORT brand motorsports apparel,
including boots, gloves, jackets, and accessories.
LeMans is a
accessories, and apparel from various vendors, including AGVSG.
LeMans began distributing AGV products in 1989, at which time
AGVSG did not yet exist.
Rather, at that time, LeMans did
business with AGV SpA, an Italian company, through its United
States importer and designated resident agent, Michael Parrotte.
entity, which designs and markets an apparel line under the AGV
name pursuant to a license from AGV SpA.
In 1994, AGVSG and LeMans entered into a written exclusive
distribution agreement (the “Initial Agreement”) for a term of
three years, which, in the absence of sufficient notification,
would automatically renew up to three times, each time for a
agreement, it continued through the fall of 2006.
At that time,
the parties were close to reaching an agreement (the “Licensing
Agreement”) that would grant LeMans an exclusive license and
virtual ownership of the AGVSport trademark in the United States
Unless otherwise noted, the facts contained herein are
taken from the Complaint, Motion for Summary Judgment, Response
in Opposition, and Reply.
AGVSG contends that, during negotiations over the
Licensing Agreement, the parties continued their relationship
pursuant to the terms of the Initial Agreement, via an “Interim
Agreement,” which continued the exclusive distributorship.
Nonetheless, LeMans allegedly instructed
Agreement, as its finalization was imminent.
Thus, in reliance
on the Licensing Agreement, and in anticipation of orders from
LeMans, AGVSG prepared product designs for the next three riding
sales manager, and laid off about half its office staff.
Conversely, LeMans contends that, while negotiations were
fully the extent of its rights to assign an exclusive license to
Accordingly, LeMans became uneasy over finalizing the
LeMans asserts that, by November 2007, it
became clear that AGVSG would not be able to assign an exclusive
license to LeMans and concluded that the Licensing Agreement
would not be viable.
distribution, warehousing, advertising, marketing, and sublicensing duties from AGVSG, while AGVSG would concentrate on
(Compl. ¶ 12, ECF No. 1).
In any event, after December 13, 2006, LeMans alleges that
the parties continued to conduct business on a purchase orderby-purchase order basis.
To this end, AGVSG avers that, between
together to prepare LeMans’s product order for the beginning of
the 2008 season, supposedly agreeing that LeMans would place an
order totaling $750,000.00 in wholesale value.
AGVSG that they would submit a formal purchase order for the
order, and, in fact, contacted AGVSG about three weeks later,
Licensing Agreement nor the 2008 product order.
resolution before a U.S. Magistrate Judge, AGVSG filed its first
Motion for Partial Summary Judgment.
(ECF No. 18).
filed its Response on August 29, 2011 (ECF No. 19), but AGVSG
later withdrew its first Motion for Partial Summary Judgment
dispositive motions, AGVSG filed its second Motion for Partial
Summary Judgment on December 10, 2012.
filed its Response on January 16, 2013 (ECF No. 55), and AGVSG
filed its Reply on February 4, 2013 (ECF No. 56).
Standard of Review
Under Federal Rule of Civil Procedure 56, the Court must
grant summary judgment if the moving party demonstrates that
there is no genuine issue as to any material fact, and that the
In reviewing a motion for summary judgment, the Court views
the facts in a light most favorable to the non-moving party.
properly made and supported, the opposing party has the burden
of showing that a genuine dispute exists.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986).
“[T]he mere existence of some alleged factual dispute between
motion for summary judgment; the requirement is that there be no
genuine issue of material fact.”
Anderson, 477 U.S. at 247-48.
A “material fact” is a fact that might affect the outcome
of a party’s case.
Id. at 248; JKC Holding Co. v. Wash. Sports
Ventures, Inc., 264 F.3d 459, 465 (4th Cir. 2001).
affect the outcome of the suit under the governing law will
properly preclude the entry of summary judgment.”
U.S. at 248; Hooven-Lewis v. Caldera, 249 F.3d 259, 265 (4th
A “genuine” issue concerning a “material” fact arises when
the evidence is sufficient to allow a reasonable jury to return
a verdict in the nonmoving party’s favor.
Anderson, 477 U.S. at
Rule 56(c) requires the nonmoving party to go beyond the
pleadings and by its own affidavits, or by the depositions,
answers to interrogatories, and admissions on file, designate
specific facts showing that there is a genuine issue for trial.
nonmoving party “cannot create a genuine issue of material fact
through mere speculation or the building of one inference upon
Beale v. Hardy, 769 F.2d 213, 214 (4th Cir. 1985).
AGVSG’s Motion for Summary Judgment regarding the existence
of an Interim Agreement for an exclusive distributorship between
the parties will be denied because disputed material facts exist
as to whether the Interim Agreement was formed.
AGVSG seeks to enforce the alleged Interim Agreement as an
“exclusive dealing” contract under Section 2-306 of the Uniform
Commercial Code (“UCC”), Md. Code Ann., Com. Law § 2-306 (West
Section 2-306 defines an exclusive dealing contract as
“[a] lawful agreement by either the seller or the buyer for
exclusive dealing in the kind of goods . . . .”
a contract, the principal is expected to refrain from supplying
any other dealer or agent within the exclusive territory.
id., cmt. 5.
An essential element of contract formation is “‘a
manifestation of agreement or mutual assent by the parties to
the terms thereof . . . [and] the minds of the parties must be
in agreement as to its terms.’”
Cnty. Comm’rs for Carroll Cnty.
v. Forty W. Builders, Inc., 941 A.2d 1181, 1209 (Md.Ct.Spec.App.
2008) (quoting Safeway Stores, Inc. v. Altman, 463 A.2d 829, 831
Because LeMans “is a body corporate [it] must act by its
duly authorized executive or agent.”
N. Am. Accident Ins. Co.
conferring such authority, it is a question of fact whether a
purported agent had the authority to enter a particular contract
on behalf of a corporation.
A. 780, 782 (Md. 1932).
Kennedy v. Mut. Life Ins. Co., 159
The party seeking enforcement of such
contract bears the burden of proving this fact.
prevail on summary judgment, AGVSG must establish that there are
no disputes of material fact that LeMans and AGVSG were bound to
falls within the meaning of UCC § 2-306, and which AGVSG and
meeting of the minds.
between December 14, 2006, and August 31, 2009.
Supp. Partial Summ. J. [“Pl.’s Mot.”] at 1, 4, ECF No. 49-1).
The record shows that the Initial Agreement terminated by its
own terms on December 13, 2006.
(Ex. A [“Initial Agreement”] ¶
further specifies that any amendment to the agreement, including
(Parrotte Dep. 130:2-7, June 8, 2011, ECF No. 55-3).
exclusive distribution agreement AGVSG alleges existed between
the parties must have been a new, oral agreement.
In support of
relies solely on the sworn testimony of five LeMans employees.3
(See Pl.’s Mot. at 4-10):
In the background section of its second Motion, AGVSG
points to pages 4-7 of LeMans’s Opposition to AGVSG’s first
Motion for Partial Summary Judgment, indicating that LeMans (i)
admitted to being the exclusive U.S. distributor of AGVSG
manufacturer, and (iii) would pay AGVSG an agreed upon
Jeff Hart, LeMans’s Purchasing Manager, stated
that “[a]fter December 13, 2006, LeMans simply
operated as an exclusive distributor of the AGV
Sport product line on a purchase order-by
Affidavit”] ¶ 6, ECF No. 19-8).
subsequent deposition, Mr. Hart further testified
statements made by Michael [Parrotte] that we
would not be the exclusive distributor.”
Dep. 76:3-5, July 25, 2012, ECF No. 49-4);
Greg Blackwell, LeMans’s Vice President of Sales,
testified that “to [his] knowledge,” LeMans was
the exclusive distributor of AGV Sports product
until August 31, 2009.
(Blackwell Dep. 8:15-17,
July 24, 2012, ECF No. 49-5);
distributor as of May 5, 2009, in the United
States for AGV Sport products.
9:9-12, July 24, 2012, ECF No. 49-6);
Lou Lopez, LeMans’s National Sales Manager,
distributor of AGV Sports products.
8:22-24, July 24, 2012, ECF No. 49-7); and
exclusive distributor for AGV Sports products
through August 2009.
(Collins Dep. 29:20-23,
July 24, 2012, ECF No. 49-8).
(See Pl.’s Motion at 3).
In reviewing LeMans’s
Opposition, marked as Exhibit A to Plaintiff’s Motion, the only
statement it directly supports is that LeMans would place orders
directly with the manufacturer. Nowhere does the document state
that LeMans is the exclusive distributor, and it states that
after 2007, the parties never agreed upon a commission.
Def.’s Opp’n to Pl.’s Mot. Summ. J. at 5, ECF No. 19).
did not include these assertions in the argument section of its
Accordingly because AGVSG’s reliance on the
document is unfounded, the Court will summarily dismiss this
Although the foregoing testimony may support the contention
that LeMans operated as an exclusive distributor of the AGV
Sport product line through August 31, 2009, AGVSG never alleges
on whose authority the Interim Agreement was created.
merely lists the testimony of LeMans employees, who may have
lacked the authority to bind LeMans to the purported Interim
products upon expiration of the Initial Agreement, a modicum of
scrutiny reveals that LeMans’s employees dispute whether there
between the parties.
Mr. Holzhuter, for example, testified that
parties and that their relationship was governed only by the
terms of individual purchase orders4 that LeMans issued directly
to product manufacturers after the Initial Agreement expired:
The terms of the purchase orders support LeMans’s
contention that genuine issues of material fact exist as to
whether the parties formed an Interim Agreement. Specifically,
LeMans reserved the right to rescind the purchase order and
place the order elsewhere. (See Def.’s Mem. Opp’n to Pl.’s Mot.
Partial Summ. J. [“Def.’s Resp.”] Ex. H [“Purchase Order”] ¶ 13,
ECF No. 55-9).
That an exclusive dealing contract existed
amidst this clause strains credulity.
Similarly, the purchase
order contained integration clauses and rejected all prior
courses of dealing, course of performance, and discussions
whether oral or written.
(Id. ¶ 10) (“This Order contains all
representations and agreements between LeMans and Seller with
The terms were included in our purchase orders
that would have been sent out regarding the
purchases of product that we made.
Did the agreement terminate at some point?
Our purchase orders?
The distribution agreement?
I’m not sure what distribution agreement you’re
Well, under what term was LeMans the distributor
as of May 5, 2009?
We would issue purchase orders to purchase AGV
. . . .
What was the end of the 2009 selling season?
Fall of 2009.
Was the end of the agreement August 31, 2009?
I’m not sure what agreement you’re referring to.
The exclusive distribution agreement.
regard to the subject matter hereof and, as such, shall
supersede all prior courses of dealing, usage of trade, course
of performance, negotiations, discussions and understandings,
whether oral or written.”).
Maryland law generally recognizes
the validity and effect of integration clauses. See, e.g.,
Pumphrey v. Kehoe, 276 A.2d 194, 199 (Md. 1971) (noting that an
integration clause, “although not absolutely conclusive, is
indicative of the intention of the parties to finalize their
complete understanding in the written contract”); Kasten Constr.
Co. v. Rod Enters., Inc., 301 A.2d 12, 17-18 (Md. 1973)
(explaining that courts generally should not look beyond the
contract to evidence of prior statements or agreements,
especially when the contract contains an integration clause).
The request from AGV Sports, as I understood it,
was that we would carry the product into the,
into the start of the 2010 selling season.
that is typically related to when new catalogs or
new products are released. And without reviewing
a number of documents, I don’t recall the exact
date that would have occurred in 2009.
(Holzhuter Dep. 8:20-10:4, ECF No. 55-10) (emphasis added).
Similarly, Mr. Collins testified that the parties did not
discuss exclusivity after the Initial Agreement expired or agree
to such an arrangement:
And what, what was it that determined that the
exclusive distributorship would last until August
Well, I don’t know that we specifically said that
it was going to be an exclusive distributorship.
I don’t know if that ever came up.
the way it had been.
But I think Michael
[Parrotte] had asked for us to continue selling
it until the 2010 season which in reality, for
apparel begins in the fall of 2009.
(Collins Dep. 30:18-31:2, ECF No 55-11) (emphasis added).
Lopez also testified that he never saw such an agreement:
What was the agreement that LeMans had with AGV
Sport until the end of the relationship.
I’ve never seen the agreement that AGV Sport and
(Lopez Dep. 9:11-14, ECF No. 55-12) (emphasis added).
The existence of an Interim Agreement is further belied by
Mr. Parrotte’s testimony:
Was there ever a written agreement of any sort
between LeMans and AGV Sport that required LeMans
to help AGV Sport meet its minimums for other
It’s not a written agreement. . . .
So is the answer no?
I don’t believe so.
You don’t believe that the answer is no, or you
don’t believe there was a written agreement-
I don’t believe the answer is no.
Okay. So what is the written agreement that
LeMans has with AGV Sport to help AGV Sport meet
its minimum for other customers?
I think the 1994 contract is clear.
And that’s where the agreement arises from?
I think that the general business dealings, the
company, the cooperation, the agreements and
relationship that I had with Jeff Fox, everything
from 1994 until May 2007 worked along those
(Parrotte Dep. 405:7-406:19).
A cursory review of the record reveals that the foregoing
contention flies in the face of the Initial Agreement, which
provided that “[a]cceptance of any order from LeMans or any sale
made to LeMans by AGV Sport after notice of termination or after
renewal or extension hereof nor as a waiver of such notice of
(See Initial Agreement ¶ 13(c)).
parties’ business relationship after termination of the Initial
Agreement is similarly debilitating to AGVSG’s claim:
[W]e were in this limbo where we were supposed to be
starting the licensing agreement but we were really
still doing the work under the distribution agreement.
We were sort of this in this [sic] quasi-hybrid, stuck
in two worlds between the two agreements waiting for
LeMans to figure out what they want to do.
(Parrotte Dep. 274:11-17).
employees and that of Mr. Parrotte, coupled with the text of the
purchase-order agreements between the parties, create a genuine
dispute of material fact as to whether there was a meeting of
obligations related to exclusive dealings are also in dispute.
For the foregoing reasons, this Court will, by separate
order, DENY AGVSG’s Motion for Partial Summary Judgment (ECF No.
Entered this 12th day of August, 2013
George L. Russell, III
United States District Judge
Having determined that genuine issues of material fact
exists as to the formation of the Interim Agreement, the Court
will dispense with analysis of the parties’ arguments regarding
the enforceability of the Interim Agreement under the statute of
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