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Pelc v. Howard

United States District Court, S.D. Texas, Galveston Division

September 24, 2019

JANET LYNN PELC, D/B/A RESTORE RENEW, ET AL., Plaintiffs.
v.
AMY HOWARD, ET AL., Defendants.

          MEMORANDUM AND RECOMMENDATION

          ANDREW M. EDISON, UNITED STATES MAGISTRATE JUDGE

         Pending before me is (i) Defendants' Partial Motion for Summary Judgment on Plaintiffs' Causes of Action for Breach of Contract and Attorney's Fees (Dkt. 31); and (ii) Defendants' Partial Motion for Summary Judgment on Plaintiffs' Causes of Action for Common-Law Fraud and Violations of the DTPA (Dkt. 32). After carefully considering the motions, the opposition briefs, and the applicable law, I RECOMMEND that the motions be DENIED and this case proceed to trial.

         BACKGROUND

         This lawsuit arises from a five-year business relationship between Plaintiffs Janet Lynn Pelc d/b/a Restore ReNew, Libby Golden d/b/a Another Look by Libby, and Lollie & Gigi Custom Painted Furniture (collectively, "Plaintiffs") and Defendants Artisan Studios, LLC d/b/a Amy Howard at Home ("AHAH") and Amy Howard. Plaintiffs operate a furniture restoration and home decor business. AHAH sells high-end, boutique paint products. After trying AHAH's products, Plaintiffs became interested in the possibility of selling those products to the general public.

         Plaintiffs and AHAH entered into a contract on September 17, 2013, by which Plaintiffs would purchase AHAH refinishing products and resell those products to the public through their businesses operating in Friendswood, Texas (the "2013 Contract"). As part of the contractual arrangement, AHAH agreed to provide Plaintiffs with the full line of AHAH products and, in return, Plaintiffs agreed to purchase a minimum dollar amount of AHAH products at regular intervals. The 2013 Contract also provided Plaintiffs "zip code protection"-that is, the exclusive right to sell AHAH products within a certain geographic area.

         To the great surprise of Plaintiffs, AHAH entered negotiations with Ace Hardware sometime in 2015 to make the well-known retailer a nationwide distributor of AHAH products. When Plaintiffs learned of the proposed Ace Hardware-AHAH deal, they grew concerned that AHAH would breach the geographic exclusivity agreement. There were several Ace Hardware stores within a 10-mile radius of Plaintiffs' location, including one in the same shopping center as Plaintiffs' business. Plaintiffs were also concerned that they would be unable to compete with Ace Hardware's ability to advertise on a national scale.

         Eager to allay Plaintiffs' concerns, AHAH agreed to provide Plaintiffs a 30 percent discount on all AHAH products. The 30 percent discount went into effect in November 2015 and continued in place for more than two years. In January 2018, however, AHAH informed Plaintiffs that it was revoking the 30 percent discount, purportedly because the Ace Hardware across the street from Plaintiffs had stopped selling AHAH products. Plaintiffs did not take the news well, strongly disputing whether the nearby Ace Hardware store had discontinued selling AHAH products and expressing frustration at AHAH's actions. This lawsuit ensued.

         In the present case, Plaintiffs advance causes of action for breach of contract, common law fraud, and violations of the Texas Deceptive Trade Practices Act ("DTPA"). Plaintiffs also seek to recover reasonable attorney's fees pursuant to Section 38.001 of the Texas Civil Practice & Remedies Code.

         SUMMARY JUDGMENT STANDARD

         A district 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. There is no genuine issue of material fact if, viewing the evidence in the light most favorable to the non-moving party, no reasonable trier of fact could find for the non-moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

         A party seeking summary judgment bears the initial burden of establishing the absence of a genuine issue of material fact by either (1) presenting evidence that affirmatively demonstrates the absence of any genuine issue of material fact, or (2) after adequate time for discovery, demonstrating that "the nonmoving party has failed to make a sufficient showing on an essential element of her case with respect to which she has the burden of proof." Celotex Corp., v. Catrett, 477 U.S. 317, 323 (1986). If the moving party meets this burden, the nonmoving party cannot defeat summary judgment by resting on mere denials or allegations but must set forth specific facts sufficient to raise a genuine issue of fact. See Id. at 324.

         In examining the summary judgment record, the court should do so in. the light most favorable to the party opposing summary judgment. See Matsushita Elec. Indus. Co., 475 U.S. at 587. "Even so, barebones, conclusory, or otherwise-unsupported assertions won't cut it; the nonmovant must go beyond the pleadings and come forward with specific facts indicating a genuine issue for trial." Hassen v. Ruston La. Hospitality Co., LLC, 932 F.3d .353, 355-56 (5th Cir. 2019) (internal quotation marks, footnotes, and citation omitted).

         ANALYSIS

         A. ...


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