United States District Court, W.D. Pennsylvania
Re: ECF Nos. 61, 65.
MAUREEN P. KELLY, Chief Magistrate Judge.
This single count breach of contract action stems from the failure of Defendant Shadow Beverages and Snacks, LLC ("Shadow Beverages") to perform under a License Agreement it entered into with Plaintiff American Outdoorsman, Inc. ("American Outdoorsman") in October of 2011.
Presently before the Court is a Motion for Partial Summary Judgment submitted on behalf of Defendant Shadow Beverages, ECF No. 61, and a Motion for Summary Judgment submitted on behalf of Plaintiff American Outdoorsman. ECF No. 65. For the reasons that follow, Shadow Beverages' Partial Motion for Summary Judgment will be denied and American Outdoorsman's Motion for Summary Judgment will be granted.
I. FACTUAL AND PROCEDURAL BACKGROUND
It appears undisputed that American Outdoorsman is a small media company that creates hunting, fishing and outdoor adventure programing and that Shadow Beverages is a limited liability company that works to cross market brands in the beverage and snack foods industries through licensing programs, building products and taking them to market. It is also undisputed that American Outdoorsman and Shadow Beverages entered into a License Agreement ("the Agreement") on October 18, 2011, whereby American Outdoorsman granted Shadow Beverages the right to use American Outdoorsman's name and logo "on and in connection with the development, advertising, promotion, marketing, distribution, sale use and other exploitation of... all RTD non-alcoholic beverages, beef jerky, nutritional bars, trail mix and other snacks to be mutually agreed upon." ECF No. 68-1, p. 2. In return, Shadow Beverages agreed, inter alia , to make Guaranteed Royalty payments to American Outdoorsman on a quarterly basis. The Agreement provided that the first three Guaranteed Royalty payments, each in the amount of $50, 000.00, were to be made to American Outdoorsman on July 31, 2012, October 31, 2012, and January 31, 2013. Id. at p. 6. Shadow Beverages concedes that it did not make any of these payments. ECF No. 75: p. 7, ¶ 15; p. 9, ¶ 19; pp. 11-12, ¶ 23. Consequently, in accordance with the terms of the Agreement, American Outdoorsman provided Shadow Beverages with a written Notice of Default in a letter dated February 7, 2013. ECF No. 68-3. When Shadow Beverages failed to cure the default within ten days after receiving the Notice of Default, American Outdoorsman terminated the Agreement in a Termination Letter dated March 18, 2013. ECF No. 68-4.
American Outdoorsman filed the instant Complaint on March 25, 2013, bringing a claim for breach of contract (Count I). ECF No. 1. Shadow Beverages filed an Answer to the Complaint, ECF No. 3, on April 22, 2013, which was followed by a period of discovery. Thereafter, on March 18, 2014, American Outdoorsman filed a Redacted Motion for Summary Judgment, along with a Brief in Support of Motion for Summary Judgment and a Redacted Concise Statement of Material Facts. ECF Nos. 48-51. On March 25, 2014, these same documents were refiled under seal in their un-redacted form. ECF Nos. 65-68. Similarly, on March 19, 2014, Shadow Beverages filed a Motion for Partial Summary Judgment, a redacted Brief in Support of Motion for Partial Summary Judgment, a redacted Concise Statement of Material Facts and an Appendix to its Motion for Partial Summary Judgment, ECF Nos. 52-55, which were refiled un-redacted and under seal on March 20, 2014. ECF Nos. 61-64. Because the parties requested, and were granted, leave to file their respective dispositive motions under seal, the sealed Motions filed at ECF Nos. 61 and 65, are the operative Motions. See ECF Nos. 47; 3/13/2014 Text Order.
II. STANDARD OF REVIEW
Rule 56 of the Federal Rules of Civil Procedure provides that: "The 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). An issue of material fact is in genuine dispute if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248 (1986). See Doe v. Abington Friends Sch. , 480 F.3d 252, 256 (3d Cir. 2007) ("A genuine issue is present when a reasonable trier of fact, viewing all of the record evidence, could rationally find in favor of the non-moving party in light of his burden of proof"). Thus, summary judgment is warranted where, "after adequate time for discovery and upon motion... a party... fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Marten v. Godwin , 499 F.3d 290, 295 (3d Cir. 2007), quoting Celotex Corp. v. Catrett , 477 U.S. 317, 322-23 (1986).
The moving party bears the initial burden of demonstrating to the court that there is an absence of evidence to support the non-moving party's case. Celotex Corp. v. Catrett , 477 U.S. 317, 322 (1986). See Conoshenti v. Pub. Serv. Elec. & Gas Co. , 364 F.3d 135, 140 (3d Cir. 2004). "W]hen the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts.... Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial." Scott v. Harris , 550 U.S. 372, 380 (2007), quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 586-87 (1986).
In deciding a summary judgment motion, a court must view the facts in the light most favorable to the nonmoving party and must draw all reasonable inferences, and resolve all doubts in favor of the nonmoving party. Matreale v. New Jersey Dep't of Military & Veterans Affairs , 487 F.3d 150, 152 (3d Cir. 2007); Woodside v. Sch. Dist. of Phila. Bd. of Educ. , 248 F.3d 129, 130 (3d Cir. 2001).
As previously discussed, it is undisputed in this case that Shadow Beverages breached the Agreement by failing to develop and market the licensed brands and by failing to make any of the Guaranteed Royalty payments provided for in the Agreement. It is also undisputed that Shadow Beverages is liable to American Outdoorsman for the three Guaranteed Royalty payments that were past due when American Outdoorsman terminated the Agreement in March of 2013. What is in dispute is whether Shadow Beverages is also liable to American Outdoorsman for the remainder of the Guaranteed Royalty payments itemized in the Agreement that had not yet become due when the Agreement was terminated. At the core of the controversy is the interpretation of the Termination provision contained in the Agreement which provides that:
23. Termination. (a) If either Party at any time during the Contract Period of this Agreement (i) fails to make any payment of any sum of money herein specified to be made, or (ii) fails to observe or perform any of the covenants, agreements, or obligations hereunder (other than the payment of money and except as otherwise provided in Paragraph 23(b) (d) and (e) below), the non-defaulting Party may terminate this Agreement if such default is not cured ...