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Structural Group, Inc. v. Fyfe Co., LLC

United States District Court, D. Maryland

August 30, 2016

STRUCTURAL GROUP, INC.
v.
FYFE CO., LLC.

          MEMORANDUM

          Catherine C. Blake United States District Judge

         Plaintiff Structural Group, Inc. (“Structural”) filed this action for declaratory judgment and breach of contract against Fyfe Co., LLC (“Fyfe”), relating to a dispute about their respective obligations under a Private Labeling Agreement (“PLA”). Fyfe brought two counterclaims against Structural, also asserting declaratory judgment and breach of contract claims. Now pending before the court are Structural's motion for summary judgment (ECF No. 74) and Fyfe's cross-motion for summary judgment. (ECF No. 77). The motions are fully briefed, and no oral argument is necessary. See Local R. 105.6. For the reasons set forth below, Structural's motion will be denied and Fyfe's cross-motion will be granted.

         BACKGROUND

         Plaintiff Structural is a specialty construction, repair, and maintenance services company that is incorporated and headquartered in Maryland. Defendant Fyfe manufactures products used in construction strengthening systems, including Fiber Reinforced Polymer (“FRP”) systems, for the repair and restoration of buildings. Fyfe is incorporated in Delaware and headquartered in San Diego, California.

         Structural and Fyfe entered into a PLA, effective October 1, 2011, under which Structural agreed to buy FRP products exclusively from Fyfe to market and sell under its own name, and Fyfe agreed to sell such products to Structural at prices agreed to in the contract. Specifically, the PLA provides that Structural's purchase obligations are to:

[E]xclusively promote, purchase, install the Fyfe [T]yfo® FRP systems including all system compatible materials only as defined by the terms of this agreement and . . . not to compete with Fyfe or purchase from other vendors without prior written authorization from Fyfe during the terms of this agreement except where Fyfe Products are specifically excluded or not approved.

(ECF No. 78, Ex. 4, p. 4). For its part, Fyfe agreed to sell the products to Structural “at equal or better properties than outlined in the Product Data Sheets.” (Id. at p. 2). The term of the PLA is five years, and two year written notice is required “if Fyfe intends not to renew the [PLA] at the expiration of the 5 year term.” (Id. at p. 1).

         The PLA also contains a provision granting Structural a two-year license (the “License”) to use its patented method on pipe projects. (Id. at p. 2). Under this provision, Fyfe is obligated to pay royalties to Structural in the amount of a percentage of “the final collected contract value” of such projects. Id. If Fyfe does not intend to renew the License at the end of the two-year term, it must provide Structural six months' notice. Id.

         In March 2013, Fyfe notified Structural that it did not intend to renew the License, and on October 1, 2013, the License expired. (ECF No. 78, Ex. 8). In the following months, Structural sought a new supplier of FRP materials for its pipe projects, and purchased several million dollars' worth of FRP products from third party vendors. (ECF No. 78, Ex. 15; id. Ex. 16, pp. 21-22).

         Structural filed its complaint on January 10, 2014, bringing claims against Fyfe for declaratory relief and breach of contract. (ECF No. 1). In Structural's view, once Fyfe terminated the License, it was no longer obligated to purchase pipe products exclusively from Fyfe. Id. Structural seeks declaratory relief; in the event that it prevails on its breach of contract theory, Structural seeks compensatory damages as well. For its part, Fyfe brings declaratory judgment and breach of contract counterclaims against Structural. (ECF No. 38). According to Fyfe, Structural remains obligated to purchase FRP products exclusively from it, and Structural breached the contract by purchasing FRP products elsewhere. Id. Fyfe seeks declaratory relief and damages for lost profits. Before discovery, Fyfe filed a motion to dismiss, or in the alternative, to transfer for improper venue; Structural filed a motion for summary judgment. This court denied both motions. (ECF No. 34). Now, after discovery, Structural has renewed its motion for summary judgment (ECF No. 74), and Fyfe has filed a cross-motion for summary judgment. (ECF No. 77).

         STANDARD OF REVIEW

         Federal Rule of Civil Procedure 56(a) provides that summary judgment should be granted “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). Not just any factual dispute will defeat a motion for summary judgment. A dispute is genuine if “a reasonable jury could return a verdict for the nonmoving party.” Dulaney v. Packaging Corp. of Am., 673 F.3d 323, 330 (4th Cir. 2012). A fact is material if it “might affect the outcome of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Thus, “the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Id. at 247-48 (emphasis in original).

         The court must view the evidence in the light most favorable to the nonmoving party, Tolan v. Cotton, 134 S.Ct. 1861, 1866 (2014) (per curiam), and draw all reasonable inferences in that party's favor. Scott v. Harris, 550 U.S. 372, 378 (2007) (citations omitted). At the same time, the court must “prevent factually unsupported claims and defenses from proceeding to trial.” Bouchat v. ...


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