Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

G.P.P., Inc. v. Guardian Protection Products, Inc.

United States District Court, E.D. California

May 9, 2017

G.P.P., INC. d/b/a GUARDIAN INNOVATIVE SOLUTIONS, Plaintiff,
v.
GUARDIAN PROTECTION PRODUCTS, INC., RPM WOOD FINISHES GROUP, INC., Defendants. GUARDIAN PROTECTION PRODUCTS, INC., Counterclaimant,
v.
G.P.P., INC. d/b/a GUARDIAN INNOVATIVE SOLUTIONS, Counter-defendant.

          ORDER DENYING DEFENDANTS' SUCCESSIVE MOTION FOR PARTIAL SUMMARY JUDGMENT (DOC. 184)

          SHEILA K. OBERTO, UNITED STATES MAGISTRATE JUDGE

         Pending before the Court is the Successive Motion for Partial Summary Judgment (“Defendants' Motion”) brought by Defendant and Counterclaimant Guardian Protection Products, Inc. (“Guardian”) and Defendant RPM Wood Finishes Group, Inc. (Doc. 184.) For the reasons provided herein, the Court DENIES the Motion. (Id.)

         I. BACKGROUND

         The Court fully described the background for this case in its January 18, 2017 Order Granting in Part and Denying in Part the Parties' Motions for Summary Judgment (the “January Order”). (Doc. 133.) As such, the Court shall not repeat the full background for this matter.

         A. The Agreements and the Product Language

         As is relevant here, Guardian and Plaintiff/Counter-defendant G.P.P., Inc. d/b/a Guardian Innovative Solutions (“GIS”) are parties to six warehousing distributor agreements (collectively, the “Agreements”), “which grant GIS the exclusive right to distribute ‘Guardian Products' in” the geographic areas covered by those Agreements. (Doc. 98, Ex. 2 ¶ 12.) Specifically, the Agreements provide that GIS has distribution rights to certain Guardian products in the following geographic areas: (1) certain counties in Pennsylvania (the “Pennsylvania Agreement”), (Doc. 120, Ex. 1); (2) Ohio (the “Ohio Agreement”), (id., Ex. 3); (3) Indiana (the “Indiana Agreement”), (id., Ex. 5); (4) the remaining counties in Illinois, Iowa, and certain counties in Missouri (the “Midwest Agreement”), (id., Ex. 6); (5) Alabama (the “Alabama Agreement”), (id., Ex. 7); and (6) Tennessee (the “Tennessee Agreement”), (id., Ex. 9).[1] All of the Agreements “are governed by California law.” (Doc. 98, Ex. 2 ¶ 13.)

         With the exception of the Pennsylvania Agreement, the Agreements all provide the following pertinent description of “Guardian Labeled Distributor Products”: “It is understood that unless specifically noted by a mutually agreed upon Addendum hereto, Guardian Labeled Distributor Products shall be only those items indicated in Exhibit ‘B' which is attached hereto” (the “Product Language”). (Doc. 120, Ex. 5 ¶ 8; id., Ex. 6 ¶ 8; id., Ex. 7 ¶ 8; id., Ex. 9 ¶ 8; see also id., Ex. 3 ¶ 8 (providing an identical statement regarding “Guardian Labeled Distributor Products” in the Ohio Agreement, with the exception that the “Exhibit ‘B'” is described as “a part of this Agreement”).) The Ohio, Indiana, Midwest, Alabama, and Tennessee Agreements in the record do not include an “Exhibit ‘B'” providing a list of products that qualify as “Guardian Labeled Distributor Products, ” or an addendum otherwise describing what constitutes these products. (See id., Exs. 3, 5-7, 9.) Unlike the other Agreements, the Pennsylvania Agreement does not include any description of which products qualify as “Guardian Labeled Distributor Products.” (See id., Ex. 1.)

         B. EFPPs and the Price Lists

         “[I]n June of 2009, ” Guardian “began selling” electronic furniture protection plans (“EFPPs”). (Doc. 184, Ex. 2 ¶ 2.) These EFPPs are electronic warranties provided by Guardian and underwritten by AIG and/or Chartis. (See, e.g., Doc. 92, Ex. 3 at 272:23-273:1; Doc. 130, Ex. 3.) Guardian permitted GIS to purchase EFPPs for resale and counted GIS's sales of EFPPs towards GIS's quotas under the Agreements. (See, e.g., Doc. 125, Ex. 6 at 202:23-203:20; see also Doc. 98, Ex. 2 ¶ 21 (stating that “[t]he numbers cited in Guardian's notices of breach of the Alabama, Florida, and Tennessee Agreements included the sale of [EFPPs]”).)

         Guardian and its distributors, including GIS, devoted resources to convert from the sale of paper warranties to EFPPs. (See, e.g., Doc. 127, Ex. 6 at 2; Doc. 148, Ex. 1 at 248:12-250:24.) GIS “lost several key accounts during this [conversion] process.” (Doc. 127, Ex. 6 at 2).

         Additionally, during the course of their relationship, Guardian sent certain correspondences to GIS and other distributors that included lists of Guardian products. (See, e.g., Doc. 184, Exs. 7- 10; Doc. 196.) The parties have identified certain of these lists of products that GIS may or may not argue are “Addend[a]” under the Agreements (the “Price Lists”).[2] (See, e.g., Doc. 184, Exs. 7-10; Doc. 196.) GIS also contends―and Defendants have not contested―that EFPPs are included in at least some of these Price Lists. (See, e.g., Doc. 185, Ex. 2 ¶ 24.)

         C. The Bob's Discount Furniture Agreement

         In addition to the Agreements, GIS contends in this litigation that certain discussions between representatives of Guardian and GIS in 2010 regarding Guardian's sales of products to a third party, Bob's Discount Furniture, in areas covered by the Agreements resulted in a binding contract (the “Bob's Discount Furniture Agreement”). (See, e.g., Doc. 123 at 23-26.) Under the purported Bob's Discount Furniture Agreement, Guardian paid commissions to GIS in exchange for Guardian selling products to Bob's Discount Furniture in these areas. (See, e.g., Doc. 128; Doc. 165, Ex. 5 at 84:7-85:5.)

         The parties have only referenced a single product that Guardian allegedly sold to Bob's Discount Furniture in the areas covered by the Agreements―“private-label products . . . under the brand name ‘Bob's Goof Proof.'” (Doc. 103, Ex. 5 ¶ 3. See generally Doc. 185 at 9 (providing GIS's assertion that “Bob's Goof Proof warranties are the same as ordinary EFPPs”).) “Guardian first began selling private-label products under the brand name ‘Bob's Goof Proof' on May 28, 2010 . . . .” (Doc. 184, Ex. 2 ¶ 3.)

         Subsequent to the parties' 2010 discussions, Guardian “made $40, 741.55 in commission payments to” GIS “[f]or nearly four years from 2011 to 2014, ” which were “based on 5% of sales made by Guardian to Bob's Discount Furniture stores.” (Doc. 98, Ex. 2 ¶ 26.) In November 2014, Guardian unilaterally terminated these commission payments to GIS. (Doc. 125, Ex. 2 at 114:1-6.)

         D. Pertinent Procedural Background

         By its order entered on March 14, 2017, the Court ordered “that the parties may conduct additional discovery regarding the Product Language under the Ohio, Indiana, Midwest, Alabama, and Tennessee Agreements, as well as the meaning of ‘Guardian Labeled Distributor Products' under the Pennsylvania Agreement” (cumulatively, the “Additional Discovery”). (Doc. 177 at 3.)

         On May 3, 2017, GIS and Defendants each filed their briefs in response to the Court's May 1, 2017 order. (Docs. 191 & 192.) In these briefs, the parties identified the Price Lists that are at issue for purposes of Defendants' Motion. (See Doc. 191 at 2; Doc. 192 at 1-2.)

         In its order entered on March 31, 2017, the Court permitted the parties to file second or successive summary judgment motions. (Doc. 183 at 3.) However, the Court “specifically tailored” this “opportunity for additional summary judgment motions” to “the expanded factual record in this case relating to the Additional Discovery.” (Id. at 3-4.) Consequently, “if a party could have raised a motion for summary judgment during the initial summary judgment round in this case before the Additional Discovery, they [could] not raise that motion during this second round of summary judgment.” (Id. at 4 (citations omitted).) Given the present posture of this case, the Court also set limits on the briefing schedule and length of briefs associated with this second round of summary judgment motions. (See Id. at 3 & 6.)

         Defendants filed Defendants' Motion on April 20, 2017. (Doc. 184.) GIS filed its opposition to Defendants' Motion on April 27, 2017, (Doc. 185), and Defendants filed their reply in support of this motion on May 2, 2017, (Doc. 190). The Court then heard oral argument regarding Defendants' Motion on May 4, 2017. (Doc. 194.) As such, Defendants' Motion is ready for disposition.

         II. LEGAL STANDARD

         “Federal Rule of Civil Procedure 56 governs motions for summary judgment, ” Smith v. Union Pac. R.R. Co., No. 2:12-cv-00656-TLN-CKD, 2013 WL 5718874, at *2 (E.D. Cal. Oct. 16, 2013), and provides, in part, that “[t]he court shall grant summary judgment if 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). In evaluating a motion for summary judgment, the court “must draw all reasonable inferences supported by the evidence in favor of the non-moving party and then decide whether any genuine issues of material fact exist.” Guidroz-Brault v. Mo. Pac. R.R. Co., 254 F.3d 825, 829 (9th Cir. 2001). “A fact issue is genuine ‘if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'” Id. (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). “A material fact is one that may affect the outcome of the case under the applicable law.” Cotta v. Cty. of Kings, 79 F.Supp.3d 1148, 1156 (E.D. Cal. 2015) (citing Liberty Lobby, Inc., 477 U.S. at 248).

         “A party seeking summary judgment bears the initial burden of informing the court of the basis for its motion and of identifying those portions of the pleadings and discovery responses that demonstrate the absence of a genuine issue of material fact.” Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)); see, e.g., Fed.R.Civ.P. 56(c)(1)(A) (stating that a party seeking summary judgment must support their motion by “citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials”). “The exact nature of this responsibility, however, varies depending on whether the issue on which summary judgment is sought is one in which the movant or the nonmoving party carries the ultimate burden of proof.” Cotta, 79 F.Supp.3d at 1157 (citations omitted). “Where the moving party will have the burden of proof on an issue at trial, the movant must affirmatively demonstrate that no reasonable trier of fact could find other than for the moving party.” Soremekun, 509 F.3d at 984. On the other hand, a moving party that does not carry “the ultimate burden of persuasion at trial” must “either produce evidence negating an essential element of the nonmoving party's claim or defense or show that the nonmoving party does not have enough evidence of an essential element to carry its ultimate burden of persuasion at trial.” Nissan Fire & Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1102 (9th Cir. 2000) (citations omitted).

         “If a moving party fails to carry its initial burden of production, the nonmoving party has no obligation to produce anything, even if the nonmoving party would have the ultimate burden of persuasion at trial.” Id. at 1102-03 (citations omitted). “In such a case, the nonmoving party may defeat the motion for summary judgment without producing anything.” Id. at 1103 (citation omitted).

         However, “[i]f the moving party meets its initial burden, the non-moving party must set forth, by affidavit or as otherwise provided in Rule 56, ‘specific facts showing that there is a genuine issue for trial.'” Soremekun, 509 F.3d at 984 (quoting Liberty Lobby, Inc., 477 U.S. at 250). Stated differently, “[i]n order to avoid summary judgment, a non-movant must show a genuine issue of material fact by presenting affirmative evidence from which a jury could find in its favor.” F.T.C. v. Stefanchik, 559 F.3d 924, 929 (9th Cir. 2009) (citing Liberty Lobby, Inc., 477 U.S. at 257). “A non-movant's bald assertions or a mere scintilla of evidence in his favor are both insufficient to withstand summary judgment.” Id. (citing Galen v. Cty. of L.A., 477 F.3d 652, 658 (9th Cir. 2007)); see, e.g., Soremekun, 509 F.3d at 984 (“Conclusory, speculative testimony in affidavits and moving papers is insufficient to raise genuine issues of fact and defeat summary judgment.” (citations omitted)); F.T.C. v. Publ'g Clearing House, Inc., 104 F.3d 1168, 1170 (9th Cir. 1997) (“Once the [moving party] has made a prima facie case for summary judgment, the [non-moving party] cannot rely on general denials; [they] must produce significant probative evidence that demonstrates that there is a genuine issue of material fact for trial.” (citing Liberty Lobby, Inc., 477 U.S. at 249-50)).

         “In judging evidence at the summary judgment stage, the court does not make credibility determinations or weigh conflicting evidence.” Soremekun, 509 F.3d at 984. “That remains the province of the jury or fact finder.” Cotta, 79 F.Supp.3d at 1157 (citation omitted). “Rather, [the court] draws all inferences in the light most favorable to the nonmoving party.” Soremekun, 509 F.3d at 984 (citing T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630-31 (9th Cir. 1987)). “The evidence presented by the parties must be admissible.” Id. (citing Fed.R.Civ.P. 56(e)).

         III. GUARDIAN'S FIRST COUNTERCLAIM

         Defendants first argue that summary judgment is warranted on Guardian's First Counterclaim to the extent this claim seeks declaratory judgment that EFPPs are not covered by the Agreements.[3] (See Doc. 184 at 9-19.) Specifically, Defendants argue that EFPPs are not “Guardian Labeled Distributor Products” under the Product Language, which―with the exception of the Pennsylvania Agreement―is provided in each of the Agreements. (See Id. at 9-17.) GIS argues in response that (1) EFPPs are covered by the Product Language, (2) the parties modified the Agreements to include EFPPs through their course of conduct, and (3) Guardian is estopped from arguing that EFPPs are not covered by the Agreements. (See Doc. 185 at 10-18.) The Court shall address each of these issues, in turn.

         A. The Agreements' Product Language

         Defendants argue that summary judgment is warranted on Guardian's First Counterclaim because EFPPs are not covered products under the terms of the Product Language. (See Doc. 184 at 9-17.) The Court disagrees with Defendants' position.

         “Under California law, the interpretation of a written contract is a matter of law for the court even though questions of fact are involved.” Britz Fertilizers, Inc. v. Bayer Corp., 665 F.Supp.2d 1142, 1159 (E.D. Cal. 2009) (quoting Southland Corp. v. Emerald Oil Co., 789 F.2d 1441, 1443 (9th Cir. 1986)). “The basic goal of contract interpretation is to give effect to the parties' mutual intent at the time of contracting.” Founding Members of the Newport Beach Country Club v. Newport Beach Country Club, Inc., 109 Cal.App.4th 944, 955 (2003) (citations omitted). “When a contract is reduced to writing, the parties' intention is determined from the writing alone, if possible.” Id. (citation omitted). “Unless the words in a contract are used in a technical manner or are defined in the contract, the words of a contract are to be understood in their ordinary and popular sense.” Britz Fertilizers, Inc., 665 F.Supp.2d at 1159-60 (citations omitted). “When interpreting a contract, ‘[t]he whole of a contract is to be taken together' with ‘each clause helping to interpret the other.'” Id. at 1160 (quoting Cal. Civ. Code § 1641). “In addition, a court ‘may not read the contract in a manner that leads to an absurd result.'” Id. (quoting Kassbaum v. Steppenwolf Prods., Inc., 236 F.3d 487, 491 (9th Cir. 2000)).

         In this case, with the exception of the Pennsylvania Agreement, each of the Agreements includes the following Product Language: “It is understood that unless specifically noted by a mutually agreed upon Addendum hereto, Guardian Labeled Distributor Products shall be only those items indicated in Exhibit ‘B' which is attached hereto.” (Doc. 120, Ex. 5 ¶ 8; id., Ex. 6 ¶ 8; id., Ex. 7 ¶ 8; id., Ex. 9 ¶ 8; see also id., Ex. 3 ¶ 8 (providing an identical statement regarding “Guardian Labeled Distributor Products” in the Ohio Agreement, with the exception that the “Exhibit ‘B'” is described as “a part of this Agreement”).) Thus, the Product Language provides the following two distinct descriptions of “Guardian Labeled Distributor Products”: (1) “only those items indicated in Exhibit ‘B' which is attached hereto, ” (2) “unless specifically noted by a mutually agreed upon Addendum hereto.”[4] (Id., Ex. 5 ¶ 8; id., Ex. 6 ¶ 8; id., Ex. 7 ¶ 8; id., Ex. 9 ¶ 8; see also id., Ex. 3 ¶ 8 (providing that, absent a pertinent addendum, the covered products are “indicated in Exhibit ‘B' which is a part of this Agreement”).)

         Turning to the “Addendum” provision of the Product Language, Defendants argue, in relevant part, that the Price Lists are not covered by the Agreements because they do not satisfy the “specifically noted” requirement of the Product Language. (See, e.g., Doc. 184 at 11-12.) The Court agrees. A plain reading of the Product Language requires that the potential addenda to the Agreements must “specifically note[], ” in some way, that they provide items that are “Guardian Labeled Distributor Products” under the Agreements. (See Doc. 120, Ex. 3 ¶ 8; id., Ex. 5 ¶ 8; id., Ex. 6 ¶ 8; id., Ex. 7 ¶ 8; id., Ex. 9 ¶ 8.) See generally Britz Fertilizers, Inc., 665 F.Supp.2d at 1159-60 (“Unless the words in a contract are used in a technical manner or are defined in the contract, the words of a contract are to be understood in their ordinary and popular sense.” (citations omitted)). The methods of demonstrating this connection with the Agreements may vary―for example, the purported addendum could “specifically note[], ” in some way, that (1) it is an “Addendum” to the Agreements, (2) the products indicated in the addendum are “Guardian Labeled Distributor Products, ” or (3) the products indicated in the addendum are covered by the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.