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Whitesell Corp. v. Electrolux Home Products, Inc.

United States District Court, S.D. Georgia, Augusta Division

November 20, 2019

WHITESELL CORPORATION, Plaintiff,
v.
ELECTROLUX HOME PRODUCTS, INC., HUSQVARNA, A.B., and HUSQVARNA OUTDOOR PRODUCTS, INC., Defendants.

          ORDER

          J. RANDAL HALL JUDGE

         Defendant Electrolux Home Products, Inc. ("EHP") has filed a "Motion for Partial Summary Judgment as to L'Assomption Parts." The motion seeks a determination as a matter of law that Plaintiff Whitesell Corporation does not have standing to seek damages for EHP's failure to purchase Whitesell parts for its L'Assomption, Canada facility. For the following reasons, EHP's motion for partial summary judgment is GRANTED.

         I. FACTUAL BACKGROUND

         The contractual relationship at issue in this case began with a Strategic Partnership Agreement ("SPA") entered into on "the 14th Day of December, 2000, by Electrolux Home Products [Defendant herein], of White Consolidated Industries Inc., a Delaware corporation, its Affiliates and related organizations . . . and Whitesell Corporation [Plaintiff herein]." (EHP's St. of Undisputed Material Facts, Doc. No. 970-1, ¶ 2.) Unlike EHP, Whitesell Corporation was not defined to include "Affiliates and related corporations," and no other entities affiliated with Whitesell Corporation were parties to the SPA. (Id. ¶ 3.)

         Under the SPA, EHP agreed to purchase and Whitesell Corporation agreed to provide all of EHP's "current and future needs of cold headed/threaded fasteners and various related Class C items" from January 1, 2001 through April 1, 2008.[1] (See generally Doc. No. 568, Ex. 1, SPA.) Whitesell Corporation began supplying goods to EHP shortly after the SPA was executed. (EHP's St. of Undisputed Material Facts, ¶ 6.) EHP operates several facilities in North America, one of which was located in L'Assomption, Quebec, Canada. (Id. ¶ 9.) The requirements of EHP at its L'Assomption facility, however, were not supplied by Whitesell Corporation. Rather, Whitesell Canada, which was headquartered in Vaughn, Ontario, Canada, and distributed all types of fasteners and Class C components, supplied parts to this facility.[2] (Id. ¶¶ 11 & 16; see also id. ¶ 19.)

         At all times relevant, Mr. Neil Whitesell, the president and CEO of Whitesell Corporation, was also the sole shareholder of Whitesell Canada.[3] (Id. ¶ 10.) The two corporations were wholly-separate entities. Although there were transactions between Whitesell Corporation and Whitesell Canada, those transactions occurred at arm's length. (Id. ¶ 14.) The two entities had different customers with only limited overlap. (Id. ¶ 15.) They had different email servers and different systems for tracking part purchases. (Id. ¶ 12.)

         Mr. Whitesell used Whitesell Canada to supply parts to the L'Assomption facility because "it made logical sense for [his] Canadian business to service [EHP's] Canadian facility." (Id. ¶ 17.) At issue here are 92 parts EHP's L'Assomption facility purchased from Whitesell Canada. (See EHP's Mot. for Partial Summ. J., Doc. No. 970, Ex. A.) Sales between Whitesell Canada and the L'Assomption facility did not flow through Whitesell Corporation. The L'Assomption facility received invoices for all of its part purchases directly from Whitesell Canada and made payment for those purchases directly to Whitesell Canada. (EHP's St. of Undisputed Material Facts, ¶ 18.) Whitesell Canada is not a party to this lawsuit. (Id. ¶ 22.)

         In the lawsuit, Whitesell Corporation has sued EHP for an alleged breach of contract, seeking lost profits for EHP's failure to purchase all of its requirements for covered parts from Whitesell Corporation during the contract duration term. Through its present motion for summary judgment, EHP points out that Whitesell Corporation never supplied any of the 92 subject parts to the L'Assomption facility; thus, Whitesell Corporation could not have suffered lost profit damages related to the L'Assomption parts. Further, EHP contends that Whitesell Corporation does not have standing to seek damages, if any, on behalf of Whitesell Canada.

         II. LEGAL STANDARD

         The Court should grant summary judgment only if "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). The purpose of the summary judgment rule is to dispose of unsupported claims or defenses which, as a matter of law, raise no genuine issues of material fact suitable for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986).

         In considering a motion for summary judgment, all facts and reasonable inferences are to be construed in favor of the nonmoving party. Hogan v. Allstate Ins. Co., 361 F.3d 621, 625 (11th Cir. 2004). Moreover,

[t]he mere existence of some factual dispute will not defeat summary judgment unless the factual dispute is material to an issue affecting the outcome of the case. The relevant rules of substantive law dictate the materiality of a disputed fact. A genuine issue of material fact does not exist unless there is sufficient evidence favoring the nonmoving party for a reasonable jury to return a verdict in its favor.

Chapman v. AI Transp., 229 F.3d 1012, 1023 (11th Cir. 2000) (en banc) (quoted source omitted) (emphasis supplied). The party opposing the summary judgment motion, however, "may not rest upon the mere allegations or denials in its pleadings. Rather, its responses . . . must set forth specific facts showing that there is a genuine issue to be tried." Walker v. Darby, 911 F.2d 1573, 1576-77 (11th Cir. 1990).

         The Clerk has given the nonmoving party, Whitesell, notice of the summary judgment motion and the summary judgment rules, of the right to file affidavits or other materials in opposition, and of the consequences of default. (Doc. No. 971.) Therefore, the notice requirements of Griffith v. Wainwright, 772 F.2d 822, 825 (11th Cir. 1985) (per curiam), are ...


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