Opinion
EP-02-CA-439-DB.
May 24, 2006
MEMORANDUM OPINION AND ORDER
On this day, the Court considered Defendant's "Motion For Summary Judgment On Plaintiff's Claim Relating To Men's Black Jeans," filed in the above-captioned cause on March 18, 2005. On March 29, 2005, Plaintiff Sunshine Traders of El Paso, Inc. filed a Response, to which Defendant filed a Reply, on April 1, 2005. After due consideration, the Court is of the opinion that Defendant's Motion should be granted.
BACKGROUND
This case arises out of a contract dispute involving the manufacture, purchase, and sale of boy's and men's jeans. Presently at issue is Plaintiff's claim concerning men's black jeans. Plaintiff, a Texas corporation, with its principal place of business in El Paso, Texas, is a wholesale apparel business, specializing in jeans and contracts for production with factories in Mexico. Defendant is a Kentucky corporation, with its principal place of business in Tennessee. During 1998, Defendant issued various purchase orders to Plaintiff for the manufacture and delivery of men's black jeans. Defendant's purchase orders set specified quantities and a ship date. As of June 1999, Plaintiff had 24,031 pairs of men's black jeans in inventory which Defendant had ordered, but had refused to take delivery of.Plaintiff initially filed suit in the 120th District Court of El Paso County, Texas on August 7, 2002. On September 12, 2002, Defendant filed a "Notice of Removal," pursuant to 28 U.S.C. § 1446, claiming that the Court possesses diversity jurisdiction over the instant cause because the Parties are citizens of different states, and the amount in controversy exceeds $75,000. On November 13, 2003, Plaintiff sought leave to file a "First Amended Complaint." On May 4, 2004, Defendant filed a "Motion For Partial Summary Judgment," which the Court granted in its entirety by Memorandum Opinion and Order dated March 29, 2005. In that Memorandum Opinion and Order, the Court noted that it understood Plaintiff to have asserted three causes of action in its First Amended Complaint. The Court further highlighted that Plaintiff's breach of contact claims premised on invoices 502, 634, and 640, as well as Plaintiff's cause of action concerning refused jeans, were unchallenged by Defendant's May 4, 2004 "Motion for Partial Summary Judgment," remained in tact, and were set for trial on May 23, 2005.
28 U.S.C. § 1332 grants the Court original jurisdiction over civil actions where the matter in controversy exceeds $75,000 and is between citizens of different states. 28 U.S.C.A. § 1332 (West Supp. 2004).
The Court granted Plaintiff's request of leave to filed its "First Amended Complaint," on January 13, 2004.
After receiving the Court's March 29, 2005, Memorandum Opinion and Order, Plaintiff telephonically informed Defendant and the Court that there was an additional claim regarding men's black jeans which the March 29, 2005 Memorandum Opinion and Order had failed to address. Upon learning such, Defendant requested an opportunity to file a motion for summary judgment regarding that claim. The instant Motion followed.
STANDARD
Summary judgment should be granted only where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R. CIV. P. 56(c). The party that moves for summary judgment bears the initial burden of identifying those portions of the pleadings and discovery on file, together with any affidavits, which it believes demonstrate the absence of a genuine issue of material fact. See, e.g., Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). "If the moving party fails to meet this burden, the motion must be denied, regardless of the nonmovant's response." Tubacex, Inc. v. M/V Risan, 45 F.3d 951, 954 (5th Cir. 1995). If the movant does meet this burden, however, the nonmovant must go beyond the pleadings and designate specific facts showing that there is a genuine issue for trial. See, e.g., Celotex, 477 U.S. at 324. "If the nonmovant fails to meet this burden, then summary judgment is appropriate." Tubacex, 45 F.3d at 954.
When making a determination under Rule 56, factual questions and inferences are viewed in a light most favorable to the nonmovant. See Calbillo v. Cavender Oldsmobile, Inc, 288 F.3d 721, 725 (5th Cir. 2002). The party opposing a motion supported by evidence cannot discharge his burden by alleging mere legal conclusions. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986). Instead, the party must present affirmative evidence in order to defeat a properly supported motion for summary judgment. See id.
DISCUSSION
As an initial matter, the Court takes up Defendant's assertion that the Parties contractually agreed that the terms and conditions of Defendant's purchase orders would be governed by Kentucky law. Under Erie R. Co. v. Tompkins, a federal court must apply state law to cases not governed by federal law. Erie R. Co. v. Tompkins, 304 U.S. 64, 78 (1938). Here, because the Court's jurisdiction is based upon diversity of citizenship, Erie dictates that the Court apply Texas law. Ramming v. Natural Gas Pipeline Co. of America, 390 F.3d 366, 372 (5th Cir. 2004). Defendant, however, argues that Kentucky law controls the portion of this dispute premised on Defendant's purchase orders, because the purchase orders contained a choice of law provision.District courts sitting in diversity apply the choice of law rules of the forum state. Smith v. EMC Corp., 393 F.3d 590, 597 (5th Cir. 2004). In Texas, contractual choice-of-law provisions are typically enforced. Id. Nonetheless, in this case the Court finds that Plaintiff is not bound by the choice of law provision because Plaintiff did not sign the purchase orders containing the clause. United Int'l Holdings, Inc. v. Wharf (Holdings) Ltd., 210 F.3d 1207, 1223 (10th Cir. 2000) (holding that an unsigned document stating that the parties must submit to certain rules of law is insufficient to constitute a binding choice of law provision). Therefore, the Court is of the opinion that Erie binds the Court to apply Texas law to this dispute. Having clarified that the Court applies Texas law to this case, the Court turns to Defendant's Motion.
Through its instant Motion, Defendant requests the Court grant summary judgment on Plaintiff's claim premised on men's black jeans because it is barred by the applicable statute of limitations. Under Texas law, "an action for breach of any contract for sale must be commenced within four years after the cause of action has accrued." TEX. BUS. COM. § 2.725 (Vernon 1994). A breach of contract claim accrues when a party has sufficient notice of facts to place it on notice of the breach. Rose v. Baker Botts, 816 S.W.2d 805, 810 (Tex.App. 1990). Further, a breach of contract occurs when a party fails or refuses to do something it promised it would. Townewest Homeowners Ass'n, Inc. v. Warner Communications, Inc., 826 S.W.2d 638, 640 (Tex.App. 1992).
Here, Plaintiff initiated this suit on August 7, 2002. Plaintiff's "Original Petition" specified that Plaintiff's breach of contract claim arose from Defendant's failure to pay for 182,265 pieces of boy's jeans. On November 13, 2003, through its "First Amended Complaint," Plaintiff first asserted a cause of action premised on men's black jeans. Therein, Plaintiff states that, as of June 1999, Plaintiff had 24,031 pairs of men's black jeans in inventory which Defendant had ordered, but had refused to take delivery of. While the record is unclear as to when Defendant was supposed to have taken deliver of these jeans, Plaintiff's "First Amended Complaint" is specific that by June 1999, Defendant had failed to do something that it promised — take delivery of the men's black jeans. Thus, by June 1999, Plaintiff had sufficient notice of facts to place it on notice of Defendant's breach. See Rose, 816 S.W.2d at 810. Further, whenever Defendant failed to take delivery of the jeans, a breach had occurred. See Townewest Homeowners Ass'n, Inc., 826 S.W.2d at 640. Thus, in order to exercise his rights as to that breach of contract, Plaintiff needed to assert his claim by June 2003. See TEX. BUS. COM. § 2.725. Yet, as noted above, Plaintiff did not assert any claim regarding the men's black jeans until November 13, 2003. Thus, Plaintiff's claim premised on men's black jeans are time-barred as a matter of law. See id. As a result, the Court concludes that Defendant is entitled to judgment as a matter of law on Plaintiff's men's black jeans' claim. See FED. R. CIV. P. 56(c)
Through its Response, Plaintiff asserts that a fact question exists regarding when the breach occurred because of the nature in which the Parties conducted their business dealings. Plaintiff rests its argument on facts contained in Tom Boone's deposition. However, by Order entered on April 26, 2005, the Court struck from the record several of the paragraphs on which Plaintiff relies. As a result, Plaintiff's argument regarding the Parties dealings is unsubstantiated. Consequently, the Court does not address it.
Accordingly, IT IS HEREBY ORDERED that Defendant Dolgencorp, Inc.'s "Motion For Summary Judgment On Plaintiff's Claim Relating To Men's Black Jeans" is GRANTED.