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Agv Sports Group, Inc. v. Lemans Corp.

United States District Court, Fourth Circuit

December 2, 2013



GEORGE L. RUSSELL, III, District Judge.

THIS MATTER is before the Court on Defendant's, LeMans Corporation ("LeMans"), Motion for Summary Judgment. (ECF No. 57). LeMans asks this Court to grant its Motion for Summary Judgment and dismiss Plaintiff's, AGV Sports Group, Inc.'s ("AGVSG"), Complaint with prejudice. The issues have been fully briefed and no hearing is necessary. See Local Rule 105.6 (D.Md. 2011). For the reasons described below, LeMans's Motion for Summary Judgment will be granted in part and denied in part.


AGVSG is a Maryland corporation that designs, distributes, and licenses AGV Sport, or AGVSPORT branded motorsports apparel, including boots, gloves, jackets, and accessories. LeMans is a Wisconsin corporation that distributes motorsports parts, accessories, and apparel from various vendors, including AGVSG. LeMans began distributing AGV products in 1989, at which time AGVSG did not yet exist. Rather, at that time, LeMans did business with AGV SpA, an Italian company, through its United States importer and designated resident agent, Michael Parrotte. In subsequent years, Mr. Parrotte formed AGVSG, a separate entity, which designs and markets an apparel line under the AGV name pursuant to a license from AGV SpA.

In 1994, AGVSG and LeMans entered into a written exclusive distribution agreement (the "Initial Agreement") for a term of three years, which, in the absence of sufficient notification, would automatically renew up to three times, each time for a three-year period. As neither party took steps to end the agreement, it continued through the fall of 2006. At that time, the parties were close to reaching an agreement (the "Licensing Agreement") that would grant LeMans an exclusive license and virtual ownership of the AGVSport trademark in the United States and Canada.[2] AGVSG contends that, during negotiations over the Licensing Agreement, the parties continued their relationship pursuant to the terms of the Initial Agreement, via an "Interim Agreement, " which continued the exclusive distributorship.

By the fall of 2007, the parties had not yet signed the Licensing Agreement. Nonetheless, LeMans allegedly instructed AGVSG to begin operating under the terms of the Licensing Agreement, as its finalization was imminent. Thus, in reliance on the Licensing Agreement, and in anticipation of orders from LeMans, AGVSG prepared product designs for the next three riding seasons, but it ceased advertising, terminated its national sales manager, and laid off about half its office staff.

Conversely, LeMans contends that, while negotiations were ongoing, it discovered that AGVSG had neglected to disclose fully the extent of its rights to assign an exclusive license to LeMans. LeMans learned that Dainese, an Italian manufacture of leather motorsports riding apparel and the purchaser of AGV Helmets, reserved the legal right to enter into the North American market with AGV-branded apparel. Accordingly, LeMans became uneasy over finalizing the Licensing Agreement. LeMans asserts that, by November 2007, it became clear that AGVSG would not be able to assign an exclusive license to LeMans and concluded that the Licensing Agreement would not be viable.

LeMans alleges that since December 13, 2006, the parties continued to conduct business on a purchase order-by-purchase order basis. To this end, AGVSG avers that, between November 2007 and February 2008, AGVSG and LeMans worked together to prepare LeMans's product order for the beginning of the 2008 season, presumably agreeing that LeMans would place an order totaling $750, 000.00 in wholesale value. Upon reaching this agreement, LeMans representatives purportedly informed AGVSG that they would submit a formal purchase order for the agreed upon items within two weeks of their February 2008 meeting. AGVSG maintains LeMans never submitted a purchase order and, in fact, contacted AGVSG about three weeks later, informing AGVSG that it would not go forward with the Licensing Agreement or the 2008 product order.

AGVSG filed its Complaint on January 4, 2011, seeking relief from LeMans for breach of contract (Count I), or, in the alternative, promissory estoppel (Count II). (ECF No. 1). AGVSG's promissory estoppel claim relies on two separate promises made with respect to the LeMans's intention to enter into a new Licensing Agreement with AGVSG, and LeMans's promise to submit a formal purchase order for the 2008 riding season. Following limited initial discovery, AGVSG filed its first Motion for Partial Summary Judgment. (ECF No. 18). LeMans filed its Response on August 29, 2011 (ECF No. 19), but AGVSG later withdrew its first Motion for Partial Summary Judgment (ECF No. 21).

After agreeing to an extended deadline for dispositive motions, and after additional discovery, AGVSG filed its second Motion for Partial Summary Judgment on December 10, 2012. (ECF No. 49). LeMans filed its Response on January 16, 2013 (ECF No. 55), and AGVSG filed its Reply on February 4, 2013 (ECF No. 56). The Court issued a Memorandum Opinion and Order denying AGVSG's Motion for Partial Summary Judgment on August 18, 2013. (ECF Nos. 76, 77).

LeMans filed the instant Motion for Summary Judgment on April 19, 2013. AGVSG filed its Response on June 14, 2013 (ECF No. 62), and LeMans filed its Reply on July 15, 2013 (ECF No. 72).


A. Standard of Review

Under Federal Rule of Civil Procedure 56, the Court must grant summary judgment if the moving party demonstrates that there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a).

In reviewing a motion for summary judgment, the Court views the facts in a light most favorable to the non-moving party. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 255 (1986) (citing Adickes v. S. H. Kress & Co. , 398 U.S. 144, 157 (1970)). Once a motion for summary judgment is properly made and supported, the opposing party has the burden of showing that a genuine dispute exists. Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 586-87 (1986). "[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise ...

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