SEE, Inc. v. See Concept SAS

Filing 26

OPINION and ORDER denying 22 deft's MOTION for Summary Judgment without prejudice. Signed by District Judge Nancy G. Edmunds. (CBet)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

SEE, INC., a Michigan corporation,
Plaintiff,
Case No.16-13261
v.
Honorable Nancy G. Edmunds
SEE CONCEPT SAS, a French company,
and AMEICO, INC., a Connecticut
corporation,
Defendants.
/
OPINION AND ORDER DENYING DEFENDANT'S MOTION FOR SUMMARY
JUDGMENT WITHOUT PREJUDICE [22]
This case involves two eyeglass sellers that cannot see eye-to-eye regarding their
settlement obligations. Plaintiff SEE, Inc. alleges that Defendant See Concept SAS
breached the terms of their settlement, and Defendant contests that claim. The matter now
before the Court is Defendant's motion for summary judgment. For the reasons below,
Defendant's motion is DENIED without prejudice to summary judgment on other grounds.
I.

Background
The settlement at issue resulted from a lawsuit that Plaintiff commenced in January

2015. In that suit, which was also before this Court, Plaintiff claimed that Defendant was
selling eyeglasses under a SEE CONCEPT trademark that infringed Plaintiff's SEE marks.
See 2:15-cv-10047-NGE-RSW. Plaintiff specifically alleged trademark infringement, unfair
competition, and a violation of the Michigan Consumer Protection Act. All of those claims
were then resolved in October 2015 when the parties agreed to settle the case. The
parties stipulated to an order of dismissal, which the Court entered later that month.

As to the settlement agreement itself, the parties have not submitted a copy, so the
Court must rely on the parties' claims regarding its terms According to the parties, the
agreement requires Defendant to "[d]iscontinue all use" of its SEE CONCEPT mark in the
United States after January 31, 2016 and in the rest of North America after April 30, 2016.
(Dkt. 15-1, at 1.) The agreement further provides that a breaching party has ten days to
cure its breach after it receives a notice of breach. (Dkt. 6 at ¶ 35; Dkt. 22, at 10.)
Seven months after the parties memorialized their settlement, Plaintiff sent Defendant
a letter on May 31, 2016, claiming that Defendant was in breach (the "Notice of Breach").
This Notice of Breach specifically alleged that: (1) Defendant's website was still available
to users in North America and was replete with the SEE CONCEPT mark; and (2)
Defendant continued to use the SEE CONCEPT mark on numerous social media websites.
(Dkt. 15-1, at 1.) The Notice of Breach also outlined steps Defendant could take to cure
what Plaintiff termed "material breaches of the Settlement Agreement." (Id. at 2.) These
steps included: (1) discontinuing the use of SEE CONCEPT in North America; (2) removing
SEE CONCEPT from all websites and social media sites that can be accessed in North
America; (3) confirming that it was no longer selling products bearing the SEE CONCEPT
mark in North America; and (4) informing Plaintiff of the new name Defendant planned to
use. (Id.) The Notice of Breach further emphasized that Plaintiff would seek to enforce the
settlement agreement if Defendant did not comply. (Id. at 1.)
Seven days later, on June 7, 2016, Defendant's principal, Charles Brun, initiated a
sequence of email correspondence with Plaintiff's principal, Richard Golden. (Dkt. 15-2.)
He insisted that Defendant had complied with all of Plaintiff's requests: "[W]e confirm [to]
you that we are totally respecting the settlement agreement and all the mentioned dates
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and requests." (Id. at 25.) Brun elaborated: "Since the 31st of January 2016, we have
blocked all the online sales to the US and since the 30th of April 2016, we have blocked
all the online sales to Canada and Mexico. . . . Concerning the social networks and
especially our Facebook page, this is a worldwide page and we also totally avoid [talking]
about the US, Canada or Mexico[.]" (Id.)
Three days after that, on June 10, Golden replied, contesting Brun's claim that
Defendant was in "full compliance" with the settlement agreement. (Id. at 24.) Golden
stated that Plaintiff had evidence of Defendant's informing customers in North America that
they could buy Defendant's glasses online as recently as June 5, 2016. (Id.) He added
that Plaintiff would offer Defendant a "solution" outlining steps that must be taken
immediately to avoid enforcement of the agreement. (Id.) Furthermore, Golden reiterated
that Plaintiff would file a lawsuit in this Court if Defendant did not comply.
Pursuant to that email, Plaintiff's counsel sent a letter to Defendant's counsel on June
23, which restated verbatim the demands that Plaintiff made in the Notice of Breach. (Dkt.
18-4, at 3.) This letter added that if Defendant did not comply with Plaintiff's demands
within ten days, Plaintiff would file an action to enforce the settlement agreement. (Id.)
Meanwhile, direct correspondence between Brun and Golden continued, although it
was decidedly one-sided for a while. Beginning on June 14, Brun sent a series of emails
that went unanswered for three weeks. These emails informed Golden of the trademark
Defendant would use in the future, continued to maintain that Defendant had not breached
the settlement agreement, and requested further clarification regarding the alleged
breaches. (Dkt. 15-2, at 15-21.) Brun never mentioned the June 23 letter.

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Finally, on July 5, Golden acknowledged receiving Brun's messages. Three days
later, on July 8, Golden presented a "solution" to "resolve the matter amicably." (Id. at 12.)
He did not mention the June 23 letter, and the proposed "solution" diverged slightly from
the demands issued in the Notice of Breach and the June 23 letter. Specifically, Golden
proposed that Defendant would need to agree to the following within seven days to resolve
the matter: (1) cease any behavior characterized as "passive selling"; (2) block North
American access to Defendant's website, as well as any other websites containing the
mark SEE CONCEPT that are owned or controlled by Defendant; (3) block North America
from accessing all social media sites controlled by Defendant and containing the mark SEE
CONCEPT; and (4) confirm that Defendant was no longer selling any SEE CONCEPT
branded goods to anyone in North America. (Id.) Seven days later, Brun replied, claiming
that Defendant had fully complied with Defendant's proposal. (Id. at 11-12.)
The parties next exchanged a series of emails in which they disputed whether
Defendant had actually ceased selling its products in the United States in accordance with
the settlement agreement. (Id. at 1-10.) That argument never resolved, so Plaintiff filed
this lawsuit on September 9, 2016, alleging breach of contract and reasserting the claims
from the parties' previous lawsuit. Then, on November 23, 2016, Defendant filed a motion
to dismiss Plaintiff's claims under Federal Rule of Civil Procedure 12(b)(6). (Dkt. 15.)
Defendant's motion argued that Plaintiff's claims should be dismissed either because (1)
Defendant cured the alleged breaches within the ten day cure period or (2) the parties
agreed to waive the ten day cure period. In support, Defendant submitted copies of the
Notice of Breach, the email correspondence between Brun and Golden, and an affidavit

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from Brun. Plaintiff responded on December 19, 2016 with exhibits of its own, including,
but not limited to, a declaration from Golden and a copy of the June 23 letter from Plaintiff.
On January 5, 2017, given the nature of Defendant's arguments and the parties'
submissions, the Court converted Defendant's motion to dismiss into one for summary
judgment. (Dkt. 21.) The Court further ordered supplemental briefing related to whether
Defendant was entitled to summary judgment on the grounds alleged in Defendant's motion
to dismiss, and it instructed the parties to submit all relevant evidence. (Id.) Now, having
received the parties' supplemental briefing (neither party submitted additional evidence),
the Court issues this Opinion and Order.
II.

Applicable Standard
Summary judgment under Federal Rule of Civil Procedure 56(a) is proper when 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.” Id. When reviewing the record, “the court must
view the evidence in the light most favorable to the non-moving party and draw all
reasonable inferences in its favor.” U.S. S.E.C. v. Sierra Brokerage Servs., Inc., 712 F.3d
321, 327 (6th Cir. 2013) (internal citation omitted). “[S]ummary judgment will not lie if the
dispute about a material fact is ‘genuine,’ that is, if the evidence is such that a reasonable
jury could return a verdict for the nonmoving party.” Id. (citing Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986)).
III.

Analysis
Defendant moves for summary judgment on two bases. First, Defendant argues that

the record establishes that it cured the alleged breaches within the ten day cure period.

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Alternatively, Defendant argues that the correspondence between Brun and Golden shows
that Plaintiff agreed to waive the cure period.
Plaintiff responds that the correspondence between Brun and Golden is inadmissible
under Federal Rule of Evidence 408, which prohibits the use of settlement communications
to prove or disprove the validity or amount of a disputed claim. Plaintiff next maintains that,
even if the correspondence is admissible, Defendant has not shown that it is entitled to
summary judgment. For the reasons below, the Court finds that Defendant is not entitled
to summary judgment regardless of whether the correspondence is admissible.
A. Whether Defendant Cured the Alleged Breaches within the Cure Period
Defendant first argues that it is entitled to summary judgment because the undisputed
evidence establishes that it cured the alleged breaches within the ten day cure period.
More specifically, Defendant contends that it complied with the cure provision by
addressing each demand included in Golden's July 8 "solution" within seven days. But it
is undisputed both that Defendant received Plaintiff's Notice of Breach on May 31 and that
the only evidence related to Defendant's conduct over the next ten days is Brun's June 7
email.1 Accordingly, for Defendant's theory to succeed, the Court would need to find one
of the following: (1) that the May 31 Notice of Breach did not trigger the cure period; (2) that
Brun's June 7 email demonstrates that Defendant cured the breaches; or (3) that Brun's
June 7 email extended the period for cure. The Court finds none of the above.
First, the Court finds a genuine issue of fact as to whether the May 31 Notice of
Breach supplied effective notice, thereby commencing the cure period. See K&M Joint

1

Brun's affidavit says nothing about the breaches alleged, both of which relate to
Defendant's marketing. The affidavit only discusses Defendant's sales. (See Dkt. 15-3.)
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Venture v. Smith Intern., Inc., 669 F.2d 1106, 1111 (6th Cir. 1982) ("[T]he question of
whether any notice was given, and if so, what the notice consisted of and when it was
given, is one of fact."). "[F]or a notice of breach to be effective, it must 'objectively' put the
allegedly breaching party on 'notice that a cure period [is] being triggered' and that 'drastic
legal repercussions' will result from a failure to cure."2 In re 4Kids Entm't, Inc., 463 B.R.
610, 682 (Bankr. S.D.N.Y. 2011) (quoting Gil Enterprises, Inc. v. Delvy, 79 F.3d 241, 246
(2d Cir. 1996)). Here, the May 31 Notice of Breach alleged specific material breaches of
the settlement agreement, issued specific demands for cure, and informed Defendant that
Plaintiff would sue if Defendant did not comply. In light of these facts, a reasonable jury
could find that the Breach of Notice was effective, thus starting the cure period on May 31.
Next, the Court finds that Brun's June 7 email neither establishes that Defendant
cured the breaches nor indicates that Defendant somehow extended the period for cure.
The Court bases these findings on its interpretation of the cure provision, which the parties
agree is governed by Michigan law. (Dkt. 25, at 9.)
Under Michigan law, "[t]he terms of [a] contract are accorded their plain and ordinary
meaning." Hastings Mut. Ins. Co. v. Safety King, Inc., 778 N.W.2d 275, 292 (Mich. App.
2009). To determine a provision's plain and ordinary meaning, courts "may resort to a
dictionary such as Webster's[.]" Tenneco, Inc. v. Amerisure Mut. Ins. Co., 761 N.W.2d 846,
869 (Mich. App. 2008) (citing Citizens Ins. Co. v. Pro-Seal Service Group, Inc., 730 N.W.2d
682, 686 (Mich. 2007)). If the court finds that the plain meaning is unambiguous, it "must

2

Although the parties agree that Michigan law governs their contract, the Court borrows
a standard from a case applying New York law because it was unable to find a Michigan
case announcing a clear standard for what constitutes an effective notice of breach. The
Court also believes that the standard cited is a sensible test.
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interpret and enforce the contract as written because an unambiguous contract reflects the
parties' intent as a matter of law." Hastings Mut. Ins. Co., 778 N.W.2d at 292 (citing In re
Smith Trust, 745 N.W.2d 754, 758 (Mich. 2008)).

Furthermore, courts must avoid

interpreting language in a way that renders it meaningless. Klapp v. United Ins. Group
Agency, Inc., 663 N.W.2d 447, 453 (Mich. 2003) ("[C]ourts must also give effect to every
word, phrase, and clause in a contract and avoid an interpretaion that would render any
part of the contract surplusage or nugatory.").
Here, the parties have not defined "cure" in their settlement agreement, but the Court
concludes that the cure provision has a plain and unambiguous meaning that must be
enforced as a matter of law. Hastings Mut. Ins. Cor., 778 N.W.2d at 292. Specifically, the
Court finds that the provision plainly requires a party to correct, eliminate, or rectify a
breach, and a variety of sources support this interpretation. Dictionaries agree that curing
connotes correction, elimination, or rectification. See MERRIAM-WEBSTER'S COLLEGIATE
DICTIONARY 284 (10th ed. 1999) (defining cure as "to deal with in a way that eliminates or
rectifies"); THE AMERICAN HERITAGE DICTIONARY 323 (11th ed. 2003) (defining cure as "to
get rid of" or "to remedy"). And the UCC, which governs contracts for the sale of goods,
uses the term consistently with those meanings. It designates the right to "cure" as the
right of a seller to correct a non-conforming delivery of goods by making a conforming
delivery within the contract period. U.C.C. § 2-508(1). Furthermore, courts in other
contexts have defined curing as "taking care of the triggering event." In re Taddeo, 685
F.2d 24, 26 (2d Cir. 1982) (interpreting the meaning of "curing a default" under the
Bankruptcy Code).

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Having construed the cure provision to require correction, elimination, or rectification
of breaches, the Court finds that Brun's June 7 email does not establish that Defendant
cured the alleged breaches. All Brun's email does is contest Plaintiff's allegations. It does
not show that Defendant corrected, eliminated, or rectified any alleged breaches.
Therefore, Defendant is not entitled to summary judgment on the issue of whether it cured
the alleged breaches within ten days of the Notice of Breach.
The Court also rejects Defendant's suggestion that Brun's email somehow extended
the period for cure. First, the plain meaning of the cure provision forecloses that argument.
The settlement agreement requires a party to cure after receiving a notice of breach, rather
than simply respond. Or, as Plaintiff explains, the parties agreed to a "breach and cure"
provision, not a "breach and response" provision. Moreover, the Court cannot read the
provision as Defendant proposes because doing so would render the parties' contractual
right to enforce the agreement following a notice of breach "surplusage or nugatory."
Klapp, 663 N.W.2d at 453. Indeed, under Defendant's theory, a breaching party could
delay all attempts to enforce the settlement agreement simply by responding ad infinitum.
That would effectively deprive the nonbreaching party of its contractual right to enforce the
agreement, and the Court cannot adopt a reading that renders a provision meaningless.
Id. In light of the foregoing, Defendant is not entitled to summary judgment regarding
whether it cured the alleged breaches within the cure period.
B. Whether Plaintiff Waived the Cure Period
Defendant next argues that it is entitled to summary judgment because the
correspondence between Brun and Golden establishes that Plaintiff waived its right to
enforce the settlement agreement. The Court again disagrees with Defendant. Under
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Michigan law, waiver is the voluntary and intentional abandonment of a known right.
Quality Products and Concepts Co. v. Nagel Precision, Inc., 666 N.W.2d 251, 258 (Mich.
2003). A litigant establishes waiver by presenting "clear and convincing evidence that a
contracting party, relying on the terms of the prior contract, knowingly waived enforcement
of those terms." Id. "[W]aiver may be shown by express declarations or by declarations
that manifest the parties' intent and purpose," and it must be explicit. Sweebe v. Sweebe,
712 N.W.2d 708, 712 (Mich. 2006) (addressing waiver of interest in ERISA plan proceeds).
Here, there is a genuine issue of fact as to whether Plaintiff waived its right to enforce
the settlement agreement. Defendant's only evidence of waiver lies in the correspondence
between Golden and Brun, where they discuss a potential "solution" to their dispute. Read
in the light most favorable to the Plaintiff, these communications do not establish that
Plaintiff intentionally and knowingly waived its right to sue for breach of contract. To the
contrary, these emails indicate that Plaintiff believed it could bring a lawsuit at any time and
was seeking only to negotiate terms to avoid further litigation. As other courts have noted,
"generally, negotiations that could resolve issues of non-performance but that do not result
in a resolution do not constitute waiver because they do not manifest a clear intent to waive
the right of performance." Travel Re-Insurance Partners, Ltd. v. Liberty Travel, Inc., 2012
WL 1623855, at *12 (D.N.J. May 9, 2012); see also Ballard v. Parkstone Energy, LLC, 522
F. Supp. 2d 695, 710 (S.D.N.Y. 2007) (denying motion for summary judgment and finding
that evidence of settlement discussions, even if admissible, did not support finding of
waiver); Kamalnath v. Mercy Mem. Hosp. Corp., 487 N.W.2d 499, 503 (Mich. App. 1992)
("Mere discussions and negotiation, including unaccepted offers, cannot be a substitute for
the formal requirements of a contract."). Given the above, Defendant has not established
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that Plaintiff waived the right to enforce the settlement agreement, and Defendant is not
entitled to summary judgment on this ground.
IV.

Conclusion
For the reasons stated above, Defendant's motion for summary judgment is DENIED

without prejudice to summary judgment on other grounds.
SO ORDERED.

s/Nancy G. Edmunds
Nancy G. Edmunds
United States District Judge
Dated: February 28, 2017
I hereby certify that a copy of the foregoing document was served upon counsel of record
on February 28, 2017, by electronic and/or ordinary mail.
s/Carol J. Bethel
Case Manager

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