Carhartt, Inc. v. Innovative Textiles, Inc.
Filing
208
OPINION AND ORDER granting 148 Motion for Summary Judgment. Signed by District Judge Judith E. Levy. (WBar)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
Carhartt, Inc.,
Plaintiff,
v.
Innovative Textiles, Inc., and
Innovative Textiles, LLC,
Case No. 17-13604
Judith E. Levy
United States District Judge
Mag. Judge R. Steven Whalen
Defendants/
Third-Party
Plaintiffs,
v.
Gentry Mills, Inc.,
Third-Party
Defendant.
________________________________/
OPINION AND ORDER GRANTING GENTRY MILLS INC.’S
MOTION FOR SUMMARY JUDGMENT [148]
Before the Court is third-party Defendant Gentry Mills Inc.’s
motion for summary judgment against third-party Plaintiffs Innovative
Textiles, Inc., and Innovative Textiles, LLC1 (collectively, “Innovative”).
Innovative Textiles, Inc. transferred its assets to Innovative Textiles, LLC in
2015. In Innovative’s own words, “the distinction between these companies is not
1
On February 27, 2020, the Court heard oral argument on this motion.
For the reasons set forth below, Gentry Mills’ motion for summary
judgment is granted.
I.
Background
A. Factual Background
This case arises out of Innovative’s contractual relationship with
Plaintiff Carhartt, Inc. Between 2014 and 2016, Carhartt contracted with
Innovative for the development of a flame-resistant fleece fabric known
as Style 2015, which is the fabric at issue in this case. (ECF No. 148,
PageID.5962.) Carhartt used Style 2015 fabric to make garments for
workers in potentially flammable conditions, such as workers in the
electrical, oil, and petrochemical industries. (ECF No. 1, PageID.3.)
When Carhartt discovered that Style 2015 fabric failed certain flame
resistance testing, this lawsuit and Innovative’s third-party lawsuit
against Gentry Mills followed.
relevant to the issues addressed in this motion.” (ECF No. 157, PageID.6839.)
Accordingly, both Innovative Textiles, Inc. and Innovative Textiles, LLC will be
referred to as “Innovative.”
2
Although Carhartt contracted with Innovative to develop Style
2015 fabric, Innovative does not manufacture the fabric. (ECF No. 148,
PageID.5965–66.) Rather, it hires knitters to knit yarn into fabric and
finishers to finish the fabric. (Id.) For Style 2015, Innovative contracted
with Gentry Mills to perform the finishing. (ECF No. 157, PageID.6840.)
Innovative describes Gentry Mills’ fabric finishing process as
follows. First, the fabric arrived at Gentry Mills’ facility in a tube. (Id. at
6840–41.) Then it was scoured to remove knitting oils and contaminants.
(Id.) Gentry Mills formulated its own dyes, and used them to dye the
fabric. (Id.) Then, Gentry Mills applied an antimicrobial finish. (Id.)
Next, the fabric tube was cut and dried through a tenter frame. A tenter
frame is, as Innovative describes it, essentially a “giant oven” used for
drying and curing. (Id. at 6841.) Gentry Mills’ tenter frame used pre-set
and controlled temperature zones that the fabric passed through. (Id. at
6840–41.) After being run through the tenter frame, the fabric was
“napped” to give it a “fleece face.” (Id.) Gentry Mills then applied
additional chemicals to the fabric and ran it through the tenter frame
again to cure and dry it. Finally, Gentry Mills compacted, cut, and bagged
the fabric for shipping. (Id.)
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Carhartt relied on Innovative to conduct flame-resistance testing
before the finished Style 2015 fabric was shipped to Carhartt. 2 (ECF No.
148, PageID.5967.) To achieve this requirement, Innovative directed
Gentry Mills to send a portion of the finished fabric to a third-party lab
called Diversified Testing before shipping the fabric to Carhartt.3 (Id.)
Innovative contends that beginning sometime in approximately
2011, Carhartt requested that durable water repellant (“DWR”) be added
to its flame-resistant fabrics, including Style 2015. (ECF No. 157,
PageID.6843.) Innovative requested that Gentry Mills obtain samples
and conduct trials of DWR applications in order to meet Carhartt’s
demand. (Id.) Gentry Mills applied DWR to all Style 2015 fabric. (Id.)
However, DWR applications can increase fabric’s flammability. (ECF No.
157-7, PageID.6897–98.)
Innovative and Carhartt dispute certain facts related to Carhartt’s ability to
conduct its own product testing, and dispute whether the defects were latent. (See
ECF Nos. 141, 167.) However, the disputes between Innovative and Carhartt will be
addressed in a separate opinion and order and will not be set forth here unless
necessary to address Gentry Mills’ summary judgment motion.
2
Beginning in 2012, Innovative also obtained a certification for Style 2015
from Underwriters Laboratories, known as UL. UL conducted extensive testing to
satisfy the National Fire Protection Association Standard 2112. (ECF No. 141,
PageID.5744; ECF No. 167, PageID.7302–03.)
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On or around June 2016, Carhartt tested finished pieces of Style
2015 fabric and discovered that the pieces did not meet its flameresistance specifications. (Id. at PageID.5967.) Carhartt notified
Innovative, which then tested samples of Style 2015 fabric, including
samples manufactured as early as 2014, and found that the samples did
not pass the tests. (Id.) Gentry Mills experienced operation malfunctions
in its tenter frame machinery at some point in 2016, which affected its
temperature zones and corresponds in time to the discovery of the testing
failures. (ECF No. 157, PageID.6843.)
Carhartt issued a “voluntary product notification,” essentially a
voluntary recall, of the garments that had been made from Style 2015.
(ECF No. 148-13, PageID. 6118.) No one reported injuries from the
products made from Style 2015. (ECF No.141, PageID.5736.)
B. Procedural Background
After Carhartt sued Innovative, Innovative brought a third-party
complaint against Gentry Mills. (ECF No. 8.) The Court then granted
Gentry Mills’ motion to dismiss. (ECF No. 33.) Innovative moved to
amend its third-party complaint against Gentry Mills (ECF No. 34), and
the Court granted Innovative’s motion. (ECF No. 36.)
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Innovative’s amended third-party complaint included eight causes
of action against Gentry Mills. (ECF No. 37.) Gentry Mills moved for
reconsideration of the Court’s order granting Innovative leave to amend
its third-party complaint. (ECF No. 39.) The Court denied in part and
granted in part Gentry Mills’ motion for reconsideration. (ECF No. 53.)
The only count remaining is Innovative’s claim for breach of express
contract for finishing services against Gentry Mills.4 (Id.)
II.
Legal Standard
Summary judgment 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.” Fed. R. Civ. P. 56(a). The Court may not
grant summary judgment if “the evidence is such that a reasonable jury
could return a verdict for the nonmoving party.” Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986). The Court “views the evidence, all
facts, and any inferences that may be drawn from the facts in the light
Innovative filed a second amended third-party complaint against Gentry
Mills, which included all previously dismissed claims. (ECF No. 92.) Gentry Mills and
Innovative stipulated that the dismissed claims were restated in that complaint “only
to preserve any right to appeal that previous dismissal.” (ECF No. 121.) The Court
will not address claims in Innovative’s second amended third-party complaint that
were already dismissed.
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most favorable to the nonmoving party.” Pure Tech Sys., Inc. v. Mt.
Hawley Ins. Co., 95 F. App’x 132, 135 (6th Cir. 2004) (citing Skousen v.
Brighton High Sch., 305 F.3d 520, 526 (6th Cir. 2002)).
III. Analysis
Innovative’s operative complaint sets forth two theories in one
count for breach of express contract against Gentry Mills. (ECF No. 92,
PageID.3942.) Innovative’s first theory is that Gentry Mills failed to
include chemical additives in the DWR to overcome the increase in
flammability caused by DWR. (Id.) Innovative’s second theory of liability
is that Gentry Mills experienced operation malfunctions in its tenter
frame machinery at some point in 2016, which affected its temperature
zones and led to improper curing of the fabric. (Id.) For the reasons set
forth below, neither theory survives Gentry Mills’ motion for summary
judgment.
A.
Applicable Breach of Contract Law
As has previously set forth, North Carolina law applies to
Innovative’s only remaining claim for breach of contract. (ECF No. 53.)
The Court has previously ruled that the contract between Gentry Mills
and Innovative is a contract for services, not goods. The contract was
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specifically for the chemical treatment and finishing services for Style
2015. (See ECF No. 53, PageID.1614.) Under North Carolina law, a party
alleging a breach of contract must demonstrate (1) the existence of a valid
contract, (2) breach of the terms of the contract, and (3) damages.
Martinez v. Univ. of N. Carolina, 223 N.C. App. 428, 432 (2012) (quoting
Long v. Long, N.C. App. 664, 668 (2003)); Johnson v. Colonial Life & Acc.
Ins. Co., 173 N.C. App. 365, 370–71 (2005).
B.
Flame-Resistant Additives to DWR
Innovative’s first breach of contract theory can be dispensed with
because Innovative has conceded to its dismissal. Innovative’s position in
its complaint is that Gentry Mills “fail[ed] to include a flame-resistant
additive in the durable water repellant finish, and to ensure that flameresistant chemicals were applied and properly cured. . .” (ECF No. 92,
PageID. 3924.) In its brief and at the hearing, counsel for Innovative
conceded that it abandoned this claim.5 (ECF No. 157, PageID.6849.)
The Court notes that at the hearing, counsel for Gentry Mills’ indicated that
significant resources were spent in discovery defending against this claim. Further,
counsel for Gentry Mills indicated that Innovative’s unexpected abandonment of this
claim calls into question whether it should have voluntarily dismissed it before such
resources were spent earlier. Nevertheless, it is dismissed now.
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Accordingly, Gentry Mills’ motion for summary judgment on this claim is
granted and the claim is dismissed with prejudice.
C.
Tenter Frame Malfunction
Innovative’s second theory of liability is also unsuccessful.
Innovative argues that Gentry Mills’ operation malfunction in the tenter
frame breached the parties’ contract. Gentry Mills sets forth several
arguments in support of its motion for summary judgment which will be
addressed in turn.
As an initial matter, Gentry Mills’ contends that since the Court
already ruled that Innovative’s only remaining claim is for express
breach of contract in the Court’s order granting Innovative leave to
amend its third-party complaint, (ECF No. 53) any claims regarding
operation malfunctions in the tenter frame machinery
cannot be
sustained since they were not specified in the purchase orders. In the
earlier opinion and order, the Court held that Innovative had stated a
claim regarding “the application of the correct chemical and proper
curing process,” (ECF No. 53, PageID.1614) and also “machinery and
equipment failures in ‘heating zones’ that resulted in ‘inconsistencies and
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variations in the chemical and application and curing process.’”6 (Id.
(citing ECF No. 37.)) Gentry Mills argues that it correctly cured the
chemicals on the Style 2015 fabric despite its operation malfunctions in
the tenter frame machinery and that Innovative’s own representatives
testified that they do not have evidence otherwise. Gentry Mills argues
that when the operation malfunctions in the tenter frame machinery
occurred, it developed a solution. Gentry Mills representative Ashok
Dhingra, who is a plant manager and managing director for Gentry Mills,
testified in his deposition that when the operation malfunctions occurred,
[o]ne of the ways you can fix it is by compensating the
treatment time [. . .] We need to have a certain amount of
curing time to cure any chemical [. . .] [I]f one of the zones is
not working we will cut down the speed of finishing. By
cutting down the speed of the finishing we will give exactly
the same amount of curing time by reducing the speed of the
machine without affecting the treatment[.]
(ECF No. 148-6, PageID.6055.)
In response, Innovative first points to the allegations in its second
amended complaint regarding raised temperatures in the tenter frame.
Innovative’s second amended third-party complaint reflects these two claims
related to chemical additives and the curing process. (ECF No. 92.)
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(ECF No. 157, PageID.6851.) Innovative does not explain how an
allegation regarding a raised temperature is related to the operation
malfunctions in the tenter frame machinery. Moreover, allegations in a
complaint, without more, are not enough to overcome a motion for
summary judgment. Therefore, this argument is not successful.
Innovative also argues that Gentry Mills “ignores testimony
indicating the unexpected observation of increased temperatures or open
equipment doors” on the tenter frame, and cites to the deposition of
Richard Gibson, an Innovative employee.7 (Id.) The transcript portion
itself also indicates that Gibson was testifying regarding his theory that
failure to add chemical additives to DWR caused the testing failures—a
theory that has already been dismissed—when he mentioned that he
once saw, “[d]oors open, things like that” on the tenter frame. (ECF No.
157-9, PageID.6903.) Innovative never explains how or why allegations
regarding open doors in an unspecified time period have anything to do
Unfortunately, Innovative never explains who Richard Gibson is, and the
exhibit with portions of his deposition transcript fails to include any preliminary
background testimony so the Court could discover on its own who he is. The Court
learn that Gibson works in development for Innovative from a paragraph in the
middle Innovative’s expert report. (ECF No.157-15, PageID.6924.)
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with the operation malfunctions in the tenter frame machinery in 2016.
Therefore, there is no material question of fact for a jury to decide on this
theory of liability.
Next, Innovative argues that the Court should rely on its expert
report which, it alleges, “stands unrebutted, and at minimum creates a
genuine issue of material fact.” (ECF No. 157, PageID.6852.) However,
an expert report alone can rarely create a question of fact, particularly
when the expert’s opinion is conclusory. See Auto Techs. Int’l Inc. v.
Delphi Corp., 776 F. Supp. 2d 469, 478 (E.D. Mich. 2011) (“While an
expert's declaration may be of use to a court in deciding whether there is
a genuine dispute of material fact, such a declaration is not necessarily
capable of creating a genuine dispute and thereby defeating a motion for
summary judgment on its own. . . Thus, in evaluating the motions for
summary judgment, the court looks to whether the underlying facts are
in genuine dispute, not to whether Plaintiff's expert's reading of the prior
art creates a dispute.”)
Additionally, Innovative’s co-founder John Wasylyk acknowledged
in his deposition that he does not know the root cause of the testing
failures:
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Q: Has Innovative come to a conclusion as to the cause
of these test failure results?
A: No.
(ECF No. 148-4, PageID.6005.) He also testified that he had “no direct
evidence” that a processing problem at Gentry Mills caused the testing
failures. (Id. at 6011.) Innovative has not provided any other deposition
testimony or evidence that the mechanical issue at Gentry Mills breached
the parties’ contract or otherwise caused the test failure.
Although when deciding motions for summary judgment, the Court
must “assume the truth of the non-moving party’s evidence, drawing all
inferences in a light most favorable to that party,” Mullins v. Cryanek,
805 F.3d 760, 765 (6th Cir. 2015), Innovative does not set forth any
evidence in support of its theory that the operation malfunctions in the
tenter frame machinery breached the parties’ contract. (ECF No. 157.)
Accordingly, Gentry Mills’ motion for summary judgment is granted and
this claim is dismissed.
IV.
Conclusion
For the reasons set forth above, the Court GRANTS Gentry Mills’
motion for summary judgment. Innovative’s third-party claims against
Gentry Mills are dismissed with prejudice.
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IT IS SO ORDERED.
Dated: April 27, 2020
Ann Arbor, Michigan
s/Judith E. Levy
JUDITH E. LEVY
United States District Judge
CERTIFICATE OF SERVICE
The undersigned certifies that the foregoing document was served
upon counsel of record and any unrepresented parties via the Court’s
ECF System to their respective email or First Class U.S. mail addresses
disclosed on the Notice of Electronic Filing on April 27, 2020.
s/William Barkholz
WILLIAM BARKHOLZ
Case Manager
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