Sleepy's LLC v. Select Comfort Wholesale Corporation et al
MEMORANDUM AND ORDER: DENYING the 452 Motion in Limine to Exclude All Evidence of Secret Shops After Termination of the Dealer Agreement Because it is not Relevant to Plaintiff's Claims. (see M & O for additional details). Ordered by Stephen G. Crane, Special Master on 2/28/2012. c/m by ecf. (Mahon, Cinthia)
IN CLERK'S OFFICE
DISTRICT COURT E 0 N y
FZ3 2 8 Z012
LONG ISLAND OFFICE
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
MEMORANDUM & OJmER
07 CV 4018 (TCP)
SELECT COMFORT WHOLESALE CORPORATION,
SELECT COMFORT RETAIL CORPORATION and
SELECT- COMFORT CORPORATION,
Stephen G. Crane, Special Master
The undersigned, having been appointed Special Master pursuant
to Fed. R. Civ. P. 53(a) (1) (C) by order dated and filed January 10,
2012, of the Hon. Thomas C. Platt, United States District Judge, and
having heard oral argument on January 24
renders the following decision on the Defendants'
Motion to Exclude
Agreement Because it is not Relevant to Plaintiff's Claims.
For the following reasons the defendants' motion is DENIED.
The defendants claim that the contract terminated by way of
expiration on September 30, 2006, before any of the secret shops was
consequently, they argue that evidence of these post-
termination secret shops is not relevant to the Plaintiff's claims.
They contend that, even if relevant, the prejudice outweighs the
probative value of these reports,
and introduction of the shop
evidence will burden the court, confuse the issues and unnecessarily
lengthen the trial.
The defendants acknowledge at p. 6 of their moving memorandum
agreement was extended by conduct.
court skipped a critical step in its analysis, to wit: the language
of the Dealer Agreement in §9(e) which specifically provides that
conduct after termination "will not be construed as a waiver of the
termination of this Agreement or as an extension or continuation of
the term of this Agreement beyond the period specified in the notice
of termination; any such termination of this Agreement may only be
waived by an express written waiver of termination signed by the
Because the agreement terminated on September 30, 2006, not to
extended by conduct,
posit the defendants,
conducted beginning in November, 2006, are irrelevant to any breach
of the Dealer Agreement.
As a backup, the defendants claim that if
the agreement was extended by conduct, no basis exists to extend it
expiration in September and that they did not intend to extend the
Beyond the breach of contract
extend their argument to the plaintiff's breach of good faith and
fair dealing and unfair competition claims.
The plaintiff contends that the continuation of the contract
has already been litigated before District Judge Platt.
previously denied the defendants' motion to dismiss and their motion
for summary judgment finding issues of fact as to the extension of
the agreement; and, there is no justification to revisit the issue.
The plaintiff also observes that the Wind-Up Agreement dated April
18, 2007, between the same parties provided that they would operate
If the fact be found that the agreement terminated on
September 30, 2006, the plaintiff contends that the secret shops are
occurring since the beginning of the relationship.
argues that the shops are relevant to the claim for breach of the
At this point in its argument the plaintiff
raises the notion that some contract, if only for the sale of the
beds, was surely in effect throughout the relationship to support
this implied covenant.
Finally, it contends that the secret shops
are relevant to the unfair competition claim because the defendants
were engaged in a
scheme to misappropriate plaintiff's efforts,
through a policy of disparagement, to redirect consumers to purchase
from Select Comfort stores rather than Sleepy's.
as unfair competition is a tort independent of the contract.
The defendants reply.
They note the plaintiff's failure to
debate the contractual argument.
Thus, they remind the court that
conduct could not extend the agreement.
disingenuous because that agreement only refers to the plaintiff's,
obligation to operate according to the terms of the
Insofar as the plaintiff argues the existence of
a new contract for the sale of beds,
the defendants observe that
none was pleaded, and such a new contract would violate the statute
Finally, the defendants take issue with the plaintiff's
even if the agreement had expired before the secret
shops were conducted, they are relevant.
Evidence of events after
the expiration of the agreement could not affect prior sales citing
F.Supp.2d 235 1 239 (SONY 1999).
earlier determination that triable issues exist as to the extension
of the Dealer Agreement beyond its expiration on September 30, 2006.
As noted in two prior orders,
dated February 8 and February 21,
before Judge Platt who has not referred such motion to me for the
relief requested in this motion.
The undersigned has no reason to
decide the merits of the argument made before the District Judge on
two prior occasions, and does not reach the other arguments that are
alternatives to the extension-by-conduct theory.
Dated: February 27 1 2012
Central Islip, New York
The motion is,
PROOF OF SERVICE BY E-Mail
Re: Sleepy's, LLC vs. Select Comfort Wholesale Corporation, .et al.
Reference No. 1425010485
I, Virginia Corvey, not a party to the within action, hereby declare that on February 28,2012
served the attached Memorandum & Order re Defendants' Motion to Exclude All Evidence of Secret Shops
After Termination of the Dealer Agreement on the parties in the within action by electronic mail at New
York, NEW YORK, addressed as follows:
Mr. Rpbert :Cebay
Ms. Cinthia L. Mahon
United States District Court
Eastern District ofNew York
Long Island Courthouse I 00 Federal Plaza
Central Islip, NY 11722
I declare under penalty ofpetjury the foregoing to be true and correct. Executed at New York,
NEW YORK on February 28, 2012.
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