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Bodum USA, Inc. v. J.C. Penney Corporation, Inc.

Court of Appeals of Texas, Fifth District, Dallas

October 23, 2019

BODUM USA, INC. AND BODUM HOLDING AG, Appellants
v.
J.C. PENNEY CORPORATION, INC., Appellee

          On Appeal from the 199th Judicial District Court Collin County, Texas Trial Court Cause No. 199-04943-2013

          Before Chief Justice Burns, O'Neill [1] , and Rosenberg [2]

          MEMORANDUM OPINION

          MICHAEL O'NEILL, JUSTICE

         This dispute arises out of a failed business relationship between Bodum USA, Inc. (Bodum USA) and J.C. Penny Corporation (JCP). Bodum USA and its parent company, Bodum Holdings AG, (Bodum AG)[3] appeal the trial court's summary judgment in favor of JCP contending the trial court erred by (1) denying Bodum's motion for partial summary judgment regarding their breach of contract claim against JCP; (2) granting summary judgment in JCP's favor on all of Bodum's claims; and (3) overruling Bodum's objections to JCP's summary judgment evidence. Concluding no error exists with respect to JCP's motion, and its disposition further disposes of any issue with respect to Bodum's partial motion, we affirm.

         I. FACTUAL BACKGROUND

         Pursuant to a Trading Partners' Agreement (TPA) executed in 2010, Bodum USA and JCP defined the terms of their nascent commercial relationship. The TPA's first paragraph specified that it applied to all purchase and sales transactions between the parties, defined each party as an independent contractor, and negated the existence of any other type of relationship, including a joint venture or partnership. The TPA authorized JCP to purchase Bodum merchandise but did not require it to do so; required a separate purchase order to create a contract regarding any purchase; negated JCP's liability for any special, incidental, exemplary, or consequential damages arising from JCP's breach of the TPA or "any other agreement or dealings between the parties"; and created a two year limitations period for any cause of action asserted by Bodum against JCP. The TPA also provided that:

"No modification of, supplement to, or release or discharge from, this TPA, any Purchase Contract or other Transaction, the Terms and Conditions or any other agreement between the parties shall be valid unless it is offered or accepted in writing by the responsible Penney Divisional Merchandise Manager or one of his/her superiors and accepted by Seller in writing or through shipment of Merchandise."

         Bodum AG was not identified as a party to the TPA and it did not sign the TPA, but the agreement stated it was binding upon and inured to the benefit of, "the parties and their respective successors, permitted assigns, and any parent, subsidiary or affiliated company effectively controlling, or controlled by, any of them."

         A few years later, Bodum, which also sells Ordning & Reda (O&R) branded products, submitted a proposal to JCP seeking inclusion in a new "shops" concept, by which JCP would dedicate space in JCP stores for certain branded or concept merchandise. After negotiations, in November 2012, Bodum USA and JCP entered into a "Shops Agreement." The Shops Agreement specified the number of Bodum USA and O&R shops JCP would install, included details such as the square footage for each shop, and required Bodum to contribute up to $5 million towards the Bodum shops and up to $5 million to fully fund the fixtures for the O&R shops. JCP agreed to invest in a Bodum "brand experience" on jcp.com. JCP also promised to consider "in good faith" Bodum's product suggestions for the shops and to purchase merchandise for the shops from Bodum or its licensees, but JCP retained the final discretion as to the merchandise placed in the shops. March 2013 was specified as the launch date, although delineation of responsibilities to accomplish the launch was not.

         The Shops Agreement also provided:

Subject to jcpenny's rights to relocate or otherwise change or alter the shops as specified below, the parties agree that the Bodum and O&R Shops will be featured in the designated jcpenny stores for a period of 4 years from the opening date (the "Term"). Before March 1, 2016, the parties will negotiate in good faith to extend the agreement for an additional 3 years . . . (emphasis added) (the Term Provision).
On a separate page, the Shops Agreement included this provision:
jcpenny may remove, alter, or relocate any and all Bodum or O&R Shops or any portion of a Bodum or O&R Shop and a Bodum or O&R Shop may be relocated to other location within the jcpenny store in which it is installed or to and within another jcpenny store (provided, however, that in the event jcpenney removes or significantly alters the square footage of a shop, jcpenney shall refund to Bodum the pro-rata portion of the cost for such Bodum or O & R Shop (based on the number of the years left in the Term and the date of such shop change) (emphasis added) (the Removal Provision).

         In the event of a conflict between the TPA and the Shops Agreement, the parties agreed the Shops Agreement controlled.

         The shops concept expired quickly. In one large order, JCP ordered Bodum and O&R merchandise for all 683 shops projected by the Shops Agreement and payed Bodum more than $20 million for that merchandise. An unidentified number of shops began opening on a rolling basis in April 2013. During the same time period, the parties' relationship began deteriorating. The JCP executive who created the program resigned in April 2013, and both parties blamed the other for disappointing sales of the Bodum and O&R merchandise.

         In August 2013, approximately four months after the launch, Bodum USA sued JCP in a New York state court. [4] After the New York lawsuit was dismissed, in December 2013, Bodum USA filed suit in Texas. Bodum AG, Bodum USA's Swiss parent company, was added as a new plaintiff in Bodum USA's First Amended Petition, filed in August 2017. Bodum AG pleaded it was a party within the scope of the TPA and therefore also a party to the Shops Agreement. [5]

         Bodum asserted claims for breach of contract, promissory estoppel, breach of the implied covenant of good faith and fair dealing, and sought a declaratory judgment regarding any continuing obligation to fund costs related to the shops. Bodum alleged JCP materially breached its contracts with Bodum by terminating the Shops Agreement before the expiration of four years, as well as through numerous other acts and omissions. Bodum's claim for promissory estoppel rested on JCP's alleged promises regarding shop location, the look of the shops, a professional launch consistent with the parties' discussions, purchasing "safety stock," and JCP's failure to advertise Bodum and O&R products. Relying on a contention that the parties' relationship was a "massive joint effort," Bodum asserted a claim for breach of the implied covenant of good faith and fair dealing. Bodum also sought a declaratory judgment that it was not required to contribute any further amounts to fund fixtures for any shops. Bodum complained their damages included more than $4.8 million in development costs, program inventory worth $5.3 million, and over $1.6 million in shipping, fixture and display costs.

         After considerable discovery, JCP filed no-evidence and traditional motions for summary judgment on all of Bodum's claims. Bodum objected to some of JCP's summary judgment evidence and also filed a traditional motion for summary judgment seeking a determination that JCP's early termination breached the Shops Agreement. Bodum's motion, however, was never set for hearing. After hearing arguments on JCP's motions, the trial court overruled Bodum's objections and "granted Defendant's Motion for Summary Judgment." No grounds for the judgment were specified, but the judgment recited that it was final and disposed of all claims and all parties.

         II. DISCUSSION

         A. Standard of review for summary judgments.

         Orders granting summary judgment are reviewed de novo. Lujan v. Navistar, Inc., 555 S.W.3d 79, 84 (Tex. 2018); De La Cruz v. Kailer, 526 S.W.3d 588, 592 (Tex. App.-Dallas 2017, pet denied). If no grounds are specified for the ruling, we must affirm on any meritorious grounds on which judgment was requested. Merriman v. XTO Energy, Inc., 407 S.W.3d 244, 248 (Tex. 2013). If the appellant does not challenge all possible grounds on which summary judgment could have been granted, we must accept the validity of the unchallenged grounds and affirm the adverse ruling. Oliphant Fin. LLC v. Angiano, 295 S.W.3d 422, 423 (Tex. App.-Dallas 2009, no pet.); see also St. John Missionary Baptist Church v. Flakes, 547 S.W.3d 311, 312 (Tex. App.-Dallas 2018, pet. pending) (en banc).

         The legal sufficiency standard that governs directed verdicts also governs no-evidence summary judgment motions. RTLC AG Prods., Inc. v. Treatment Equip. Co.,195 S.W.3d 824, 829 (Tex. App.-Dallas 2006, no pet.). To defeat a no-evidence motion for summary judgment, the nonmovant must produce evidence regarding each challenged element of each challenged claim that "would enable reasonable and fair-minded people to differ in their conclusions." Ford Motor Co. v Ridgeway,135 S.W.3d 598, 601 (Tex. 2004); see also King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003) ("A no evidence point will be sustained when (a) there is a complete absence of evidence of a vital fact, (b) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact, (c) the evidence offered to prove a vital fact is no more than a mere scintilla, or (d) the evidence conclusively establishes the opposite of the vital fact.") (internal quotation omitted). In reviewing a no-evidence summary ...


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