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XDesign, LLC v. Mecca11, LLC
United States District Court, W.D. Washington, Seattle
June 17, 2019
XDESIGN, LLC, Plaintiff,
MECCA11, LLC, Defendant.
following Minute Order is made by direction of the Court, the
Honorable Thomas S. Zilly, United States District Judge:
Court has scheduled oral argument for Friday, June 21, 2019,
on defendant's motion for partial summary judgment,
docket no. 25, and plaintiff's cross-motion for summary
judgment, docket no. 26, dismissing all counterclaims of
defendant. Counsel shall be prepared to address at oral
argument whether the Court may, sua sponte, enter summary
judgment for a non-moving party on any issue presented by the
pending motions. Specifically, the Court will consider ruling
as follow on the pending motions:
(a) That plaintiff's motion for summary judgment, docket
no. 26, should be granted and that all defendant's
counterclaims should be dismissed with prejudice.
(b) That the August 24, 2017, Purchase Order was a legally
binding contract for the purchase of raw materials only for
4, 000 frames for a purchase price of $122, 840. See
Parnell Decl. Ex. H (docket no. 27). It was solely for raw
materials until plaintiff signed off on production which
never occurred. See Vierthaler Decl. Ex. A (e-mails)
(docket no. 28). The Purchase Order required a 50% deposit to
start production. See Parnell Decl. Ex. I (docket
no. 27). It is undisputed that no pack frames were ever
manufactured. See Stahl Decl., docket no. 29 (Taylor
Dep. at 223). Regardless of the interpretation of the
contract, it appears that defendant repudiated the purchase
order. Between August 24, 2017 and September 2, 2017 the
parties exchanged a string of e-mails discussing the Purchase
Order. Parnell Decl. ¶ 16 and Ex. J (docket no. 27).
See also Vierthaler Decl., docket no. 28, ¶ 5
and Ex. A (e-mails). Nothing in these discussions or emails
constituted a repudiation of the Purchase Order by plaintiff.
See Alaska Pacific Trading Co. v. Eagon Forest Products,
Inc., 85 Wn.App. 354 (1997). However, defendant
repudiated the August 24, 2017, contract on September 13,
2017, by sending by e-mail a revised version of the Purchase
Order. See Parnell Decl. Ex. K (docket no. 27). The
September 13, 2017, e-mail advised plaintiff that it was not
obligated to proceed with production under the original
Purchase Order and the September 13 e-mail constituted a
clear and positive statement or action that expressed
defendant's intent not to perform on the Purchase Order.
It is undisputed that it was defendant's intention that
neither party had any obligation to do any business with the
other unless agreement could be reached on a revised purchase
order. See Stahl Decl. (docket no. 29) Ex. A, Taylor
Dep. at 280-285. The action of defendant constituted a
repudiation of the Purchase Order agreement as a matter of
law. As a result, defendant's motion to dismiss
plaintiff's breach of contract claim should be denied;
correspondingly, the Court should sua sponte grant summary
judgment on the contract claim on liability in favor of
(c) That defendant has breached the April 20, 2017 tooling
quote by wrongfully demanding a $22, 000 “transfer
fee” as a condition of its release of the tooling to
plaintiff. Vierthaler Decl., docket no. 28, ¶ 3.
Defendant is not entitled to a $22, 000 transfer fee
as a condition of releasing the tooling to plaintiff. It is
undisputed that the terms of the tooling quotes did not
reference a transfer fee and Mr. Taylor concedes the tooling
quote contains all the terms of the agreement, and that he
was unaware of the fee at the time of the quote. Stahl Decl.
(docket no. 29), Taylor Dep. at 290. At his deposition, Mr.
Taylor asserted the term “Price: Ex Works” refers
to a transfer fee. The Court finds this after-the-fact
suggestion without merit and does not present a genuine issue
of fact. As indicated in the International Chamber of
Commerce Incoterms® Rules 2010, “Ex Works” is
simply a well-known delivery term defined as follows:
“Ex Works” means that the seller delivers when it
places the goods at the disposal of the buyer at the
seller's premises or at another named place (i.e., works,
factory, warehouse, etc.). The seller does not need to load
the goods on any collecting vehicle, nor does it need to
clear the goods for export, where such clearance is
See Stahl Decl. Ex. A at 155, 290 (docket no. 29-1
at 61, 119). Defendant's demand for a transfer fee should
be denied and plaintiff should be entitled to judgment for a
release of the tooling to plaintiff.
(d) That plaintiff's second cause of action for
fraudulent inducement may present factual issues. However,
the allegations of a 5%-10% markup depending on the
complexity of the project on production costs was too
uncertain to support a claim by clear and convincing evidence
for fraud under Washington law. See Parnell Decl. at
¶ 5 (docket no. 27). The parties later signed a
statement of work that does not refer to markup. See
Parnell Decl. Ex. B (docket no. 27-2). This claim should be
(e) That plaintiff's fifth claim for CPA violations
should be dismissed because “Ordinarily, a breach of a
private contract affecting no one but the parties to the
contract is not an act or practice affecting the public
interest.” Hangman Ridge Training Stables, Inc. v.
Safeco Title Ins. Co., 105 Wn.2d 778, 790 (1986).
(f) That only plaintiff's fourth claim for breach of
design contract should proceed to trial, together with trial
on damages, ...
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