Big Lots Stores, Inc. v. Jaredco, Inc.

182 F. Supp. 2d 644, 2002 U.S. Dist. LEXIS 5174, 2002 WL 122585
CourtDistrict Court, S.D. Ohio
DecidedJanuary 30, 2002
DocketC2-01-841
StatusPublished

This text of 182 F. Supp. 2d 644 (Big Lots Stores, Inc. v. Jaredco, Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Big Lots Stores, Inc. v. Jaredco, Inc., 182 F. Supp. 2d 644, 2002 U.S. Dist. LEXIS 5174, 2002 WL 122585 (S.D. Ohio 2002).

Opinion

ORDER AND OPINION

MARBLEY, District Judge.

This matter is before the Court on cross-motions for summary judgment filed by Plaintiff on November 9, 2001, and by Defendant on November 30, 2001. The Court heard oral argument on January 2, 2002. For the following reasons, the Court GRANTS Plaintiffs motion and DENIES Defendant’s motion.

I. STATEMENT OF FACTS

Plaintiff Big Lots Stores (“Big Lots”) is engaged in the business of general retail and wholesale services. Defendant Goldman & Co. (“Goldman”) provides collection and recovery services for returned and uncollected checks, and also purchases such checks from payees. During July 2001, Big Lots and Goldman began negotiating for the potential sale by Big Lots to Goldman of approximately 34,000 uncollected checks with a face value of approximately $2,700,000. During negotiations, Defendant asked Plaintiff to provide Goldman with electronic files containing information concerning the checks, including identification of the payors. Defendant claimed that it needed the electronic file to evaluate whether it was interested in consummating the proposed transaction. Big *646 Lots required Goldman to agree that until a final sale agreement was reached and reduced to writing, Goldman could only use the data for purposes of evaluation, as the file contained all of the information necessary to begin collection efforts. Pursuant to Plaintiffs requirement, Big Lots and Goldman entered into a Confidentiality Agreement (“Agreement”) on July 17, 2001. Only after the Confidentiality Agreement was executed did Big Lots provide the electronic file to Goldman.

The Agreement stated that Goldman was provided the file “solely for the purpose of evaluating the Transaction” and was not permitted to use the information contained therein “for any other purpose.” The Agreement was equally clear regarding the necessity of a definitive sales agreement by stating that neither “an executed letter of intent or any other preliminary written agreement” nor “any written or oral acceptance of an offer or bid on either party’s part” could create a binding-sales contract for the electronic file. The Agreement required a “definitive executed agreement” before Defendant could use the information in the file for any purpose other than evaluating its interest in concluding the transaction. The Agreement further stated that “if the Transaction is not consummated by the parties or if [Big Lots] so requests, [Goldman] shall immediately return to [Big Lots] the Evaluation Material and all copies thereof.”

Subject to the Agreement, Big Lots provided the electronic file to Goldman on or about July 24, 2001. Goldman verbally notified Big Lots on or about July 24, 2001, of its offer to purchase the checks for $110,000. After talking with Dreux Flah-erty, former Director of Store Control for Big Lots, Goldman’s President, Barry Sussman, prepared a formal written contract, entitled “Check Purchase Agreement” (“Purchase Agreement”), and faxed it to Tim Anderson, Vice President of Store Control for Big Lots, on July 27, 2001. Between July 25, 2001 and August 10, 2001, Goldman contacted Big Lots repeatedly to try to finalize the proposed Check Purchase Agreement. Big Lots did not respond. Mr. Sussman also exchanged e-mail communications with Big Lots representatives on July 27, 2001 to clarify whether the proposed purchase agreement was limited to Big Lots’ customers or included customers of its affiliated companies.

In early August, Goldman began receiving telephone calls from Big Lots’ former customers who were inquiring about how to settle dishonored checks they had written to Big Lots and its affiliated stores. These callers indicated that they had been instructed to call Goldman by Big Lots. On August 6, 2001, Mr. Sussman left a voice mail for Mr. Anderson expressing concern about this situation and indicating that it appeared Big Lots had agreed to the Check Purchase Agreement. Mr. Suss-man received no response. On August 8, 2001, Wayne Kraus, Goldman’s Marketing Representative, telephoned Mr. Anderson and left a similar voice mail message, but received no reply.

When the calls continued, Mr. Sussman telephoned Big Lots’ general phone number on August 10, 2001, and discovered that Big Lots’ recording was instructing payors who were calling about dishonored checks to contact one of three collection agencies, including Goldman. Goldman’s counsel, Charles Hutchins, sent a letter to Mr. Anderson that day, stating that Big Lots’ action in directing its payors to Goldman for payment of dishonored checks constituted acceptance of the Check Purchase Agreement, and that Goldman would commence check recovery efforts.

Despite all of these communications discussing the potential transaction, Big Lots never executed the Check Purchase *647 Agreement, nor was the transaction otherwise consummated. Notwithstanding the absence of a “definitive executed agreement,” on August 10, 2001, Mr. Sussman instructed Goldman representatives to utilize the information in the electronic file to begin collecting the checks from the pay-ors.

To collect the checks, Goldman representatives made numerous phone calls to Big Lots’ customers, at least some of which were of questionable character. Recipients complained of being harassed, threatened with abusive language, and intimidated into paying large fees above the face amount of the check written. Karen Gilliam, for instance, stated in her affidavit that Goldman representative Mark Stevens told her that she owed $193.10 for her original $68.10 check, and threatened her with arrest if she did not pay. And Charlene Byrdsong testified that Goldman representative Bill Jenkins told her that she owed $224 for her original $99 check. Mr. Jenkins threatened her, saying: “You are going to jail if you don’t have this money here to me by two o’clock.” After she told him that the check had been paid, he yelled: “You’re lying. You’re going to jail.”

On August 20, 2001, Big Lots learned of Goldman’s actions when it began receiving complaints from upset customers who had been contacted by Goldman. On August 21, 2001, Big Lots received Goldman’s August 10, 2001 letter. That day, Plaintiff demanded that Defendant cease its collection efforts and return the electronic file. Goldman refused to return the data and continued to contact Big Lots’ customers.

II. PROCEDURAL HISTORY

On August 24, 2001, Plaintiff filed a Complaint alleging breach of contract and conversion, and requested a Temporary Restraining Order from the Franklin County Court of Common Pleas, which was granted the same day by Judge Cain. The state court’s order enjoined Goldman from any further collection efforts relating to the electronic file, from initiating any communications with consumers whose information and checks were provided by Big Lots, and from making any copies of the file. Defendant was also required to refer immediately any and all inquiries by consumers listed in the electronic file to a telephone number supplied by Big Lots.

Defendant removed this matter to this Court on September 4, 2001, and on September 12, 2001, this Court extended the Temporary Restraining Order under Fed. R.CrvP. 65(b) until September 21, 2001. 1

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Bluebook (online)
182 F. Supp. 2d 644, 2002 U.S. Dist. LEXIS 5174, 2002 WL 122585, Counsel Stack Legal Research, https://law.counselstack.com/opinion/big-lots-stores-inc-v-jaredco-inc-ohsd-2002.