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Northstar Sourcing, LLC v. Rocket Dog Brands, LLC

United States District Court, W.D. Washington, Seattle

May 26, 2017

NORTHSTAR SOURCING, LLC, Plaintiff,
v.
ROCKET DOG BRANDS, LLC, Defendant.

          ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

          The Honorable Richard A. Jones United States District Judge.

         I. INTRODUCTION

         This matter comes before the Court on Plaintiff Northstar Sourcing, LLC's (“Northstar”) Motion for Summary Judgment. Dkt. # 16. Defendant Rocket Dog Brands, LLC (“Rocket Dog”) opposes the motion. Dkt. # 19. For the reasons stated below the Court GRANTS the motion.

         II. BACKGROUND

         Plaintiff Northstar is a company headquartered in Bellevue, Washington that contracts with Chinese factories to manufacture shoes, sometimes also designing and selling shoes directly to retailers. Mot. at 1; Guess Decl. (Dkt. # 20) ¶ 3, Ex. B (“Perkins Dep.”) at 16:18; 21:2-10. Defendant Rocket Dog is a Delaware Limited Liability Company doing business in California and Washington that wholesales and sometimes designs shoes. Answer ¶3; Resp. at 3 (citing Guess Decl., Ex. A (“Taylor Dep.”) at 9:16-20).

         In 2009, Northstar and Rocket Dog began working together. Compl. ¶ 9; Answer ¶ 9. Pursuant to their arrangement, Northstar manufactured shoes for Rocket Dog in China and then shipped them to the various ports identified in Rocket Dog's purchase orders. Compl. ¶9-10; Answer ¶9-10. Northstar then issued invoices to Rocket Dog for the fulfilled purchase orders. Compl. ¶10; Answer ¶10.

         Northstar alleges that in 2015, Rocket Dog fell behind on its payments. Compl. ¶11-15. Nevertheless, Northstar continued to accept purchase orders from Rocket Dog while Rocket Dog committed to paying down its debt. Perkins Decl. ¶ 5; Guess Decl. ¶4, Ex. C (“Briskie Dep.”) at 17:22-18:7. According to Northstar, despite efforts to negotiate Rocket Dog's debt, Rocket Dog made little effort to pay down the outstanding balance. Mot. at 2. In September, 2015, Northstar's CEO, Robert Perkins, warned Rocket Dog that Northstar would withhold future shipments if Rocket Dog did not start paying its past-due invoices. Perkins Decl., Ex. 4. In January, 2016, after Rocket Dog promised and then failed to make a $150, 000.00 payment on its debt, Northstar declared Rocket Dog in default and took possession of all goods that had been produced by Northstar but not yet received by Rocket Dog. Perkins Decl., Ex. 5-6.

         In particular, Northstar retained possession of shoes that Northstar had manufactured for Rocket Dog in fulfillment of an order from Rocket Dog's customer, Payless Shoes. Perkins Decl. ¶15. In order to mitigate damages, Rocket Dog agreed to transfer ownership of the existing orders from Payless to Northstar, with the effect that Northstar was paid directly by Payless Shoes for the order originally arranged by Rocket Dog. Bay Decl., (Dkt. # 17) ¶ 2, Taylor Dep. at 43:14-17; 44:12-45:3; Resp. at 6.

         While the parties were negotiating the logistics of the Payless order, Mr. Perkins called several Payless representatives. See Guess Decl., Exs. E-G; id., Perkins Dep. at 70:12-75:23. The parties disagree about the content and effect of Mr. Perkins' calls. See id., Perkins Dep. at 72:18-73:12; Resp. at 9-16. Mr. Perkins testified that his conversations with the Payless representatives were solely about the logistics of transferring the Payless shipment, and that he did not discuss Rocket Dog's financial status during these calls. Guess Decl., Perkins Dep. at 72:18-73:6. In contrast, one Payless employee testified that Mr. Perkins told him Rocket Dog “potentially . . . [was] bought out by a different company in the prior summer.” Guess Decl., Ex. E (“Steinhardt Dep.”) at 13:6-8. Another Payless employee testified that Mr. Perkins told him Rocket Dog was in “financial distress.” Id., Ex. F (“Underhill Dep.”) at 19:10-13. A third Payless employee, who did not talk to Mr. Perkins but was told about Mr. Perkins' calls, characterized Mr. Perkins' behavior as “unprofessional” and “unusual” and characterized Mr. Perkins' comments about Rocket Dog as “derogatory, ” although this employee was unable to recall anything specific he was told about Mr. Perkins' calls. Id. Ex. D (“Kapcar Dep.”) at 10:14-25.

         The Payless employees also testified that Mr. Perkins' phone calls did not affect Payless' ongoing decisions about doing business with Rocket Dog. See Bay Decl., Ex. B (“Hitch Dep.”) at 17:19-18:11; 35:17-19 (testifying that the “style sensibility of Rocket Dog wasn't really aligned with where [Payless] was headed”); id., Steinhardt Dep. at 17:7-12 (testifying that Mr. Perkins' phone call and alleged disclosure of information about Rocket Dog did not affect Rocket Dog's relationship with Payless); id., Kapcar Dep. at 18:1-4 (same); Underhill Dep. at 15:14-18 (testifying that Payless remains open to doing business with Rocket Dog, assuming Rocket Dog addresses issues with vendor performance and product assortment). In contrast, Rocket Dog claims that Mr. Perkins' phone calls harmed Rocket Dog's relationship with Payless and resulted in a substantial loss of business. Resp. at 9-16.

         In addition to the Payless order, Northstar also claims that Rocket Dog owes an outstanding debt of $2, 094, 326.00 from orders that Northstar had already produced and shipped on behalf of Rocket Dog. Perkins Decl. ¶ 15; Hofmann Decl., Exs. 1-3. The parties briefly attempted to negotiate a payment plan for this amount, but ultimately did not reach an agreement. Perkins Decl. ¶ 19, Ex. 3 at 14; id., Taylor Dep. at 29:11-12.

         On March 18, 2016, Northstar filed suit against Rocket Dog, alleging causes of action for breach of contract and unjust enrichment, seeking “no less than $2, 185, 947.93.” Compl. (Dkt. # 1). Rocket Dog asserted counterclaims for breach of contract and for tortious interference with contract/business expectancy. Answer (Dkt. # 5). Northstar now moves for summary judgment on its affirmative claims and on Rocket Dog's counterclaims. See Mot.

         Following a review of the motions and evidence, the Court found that the amount Northstar was claiming in damages varied between its Complaint, Motion for Summary Judgment, and the evidence cited in support thereof. Compare Compl. ¶¶ 15, 21 ($2, 185, 947.93), with, Mot. at 3 n. 1 ($2, 094, 325.64), Bay Decl., Taylor Dep. at 43:18-20 ($2, 343, 000.00). The Court ordered oral argument and offered Northstar an opportunity to cite relevant portions of the record and support its damages and interest calculations with additional evidence, if necessary. Dkt. # 23. Rocket Dog was also offered the opportunity to support its objections to Northstar's damages claim with citations to the record and additional evidence. Id. Both parties submitted additional evidence supporting their arguments regarding damages. See Dkt. #24-26. On May 25, 2017, the Court held oral argument on the subject of damages. Dkt. # 27. No party requested an evidentiary hearing.

         III. ...


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