Mugworld, Inc. v. G.G. Marck & Associates, Inc.

563 F. Supp. 2d 654, 2007 U.S. Dist. LEXIS 62224
District Court, E.D. Texas·Decided August 23, 2007·No. No. 4:05cv441·Published·Cited by 1 cases

Opinion

[656]*656 MEMORANDUM OPINION AND ORDER DENYING PLAINTIFF MUG-WORLD’S SECOND MOTION FOR SUMMARY JUDGMENT

RICHARD A. SCHELL, District Judge.

Before the court is Plaintiff Mugworld’s Second Motion for Summary Judgment (Dkt.165). After having considered Plaintiffs motion and Defendant’s response, the court is of the opinion that the motion should be denied.

Background

This case involves the sale of undercoated coffee mugs by Defendant G.G. Marck & Associates, Inc. (“Marck”) to Plaintiff Mugworld, Inc. (“Mugworld”). Mugworld buys blank mugs from importers like Marck in order to decorate them at Mug-world’s facilities in Gainesville, Texas through a process referred to as sublimation. Mugworld filed the underlying breach of contract and deceptive trade practices action alleging that Marck refused to refund its money after Mugworld returned mugs that Mugworld deemed unacceptable for the sublimation process. In response to Mugworld’s allegations, Marck has asserted counterclaims of breach of contract and groundless DTPA suit.

In their summary judgment pleadings, both parties seek to have the court apply the principles of contractual satisfaction and accord to these facts. Both contend that there was an “accord” which super-ceded their original agreement regarding the sale of mugs and permitted Mugworld to return the mugs it ordered. The parties disagree, however, about the terms and effect of the accord.

Mugworld argues that Marck agreed to issue it “full credit” for the mugs it returned and that there has been no satisfaction of this agreement because Marck has not given “full credit” yet. Mugworld further argues that Marck subsequently revised the terms of their agreement by agreeing to issue a check for the amount of mugs returned and that Marck failed to satisfy that agreement as well. Therefore, Mugworld seeks summary judgment that an accord was reached between the parties and that Marck’s failure to issue Mugworld either a credit or refund is a breach of the new agreement. Mugworld claims that the distinction between an agreement to “credit” Mugworld’s account or “issue a settlement check” is immaterial to the determination of breach of the parties’ agreement, since Marck did neither.

While Marck agrees that the parties reached an agreement that it would accept the returned mugs, Marck denies that its agreement provided for an immediate refund of the money Mugworld paid or for a credit without any offsets. Marck argues that its agreements to credit or refund Mugworld’s money were conditioned on Mugworld’s representation that the mugs were not in commercially acceptable condition. Marck claims that, contrary to Mug-world’s representations at the time Marck agreed to accept the returned mugs, many mugs had no commercial defects. Marck therefore claims that the amount of any credit should be modified accordingly. Marck seeks a partial summary judgment finding that there was an accord and satisfaction and then requests that this court hold an evidentiary hearing regarding the amount of credit Mugworld is due. Essentially, Marck argues that it cannot issue Mugworld a credit until the court holds an evidentiary hearing as to the value of offsets to which Mugworld is entitled.

Standard

Summary judgment is appropriate when, viewing the evidence and all justifiable inferences in the light most favorable to the non-moving party, there is no genuine issue of material fact and the moving party is entitled to judgment as a matter [657]*657of law. Fed. R. Civ. P. 56(c); Hunt v. Cromartie, 526 U.S. 541, 549, 119 S.Ct. 1545, 143 L.Ed.2d 731 (1999). The appropriate inquiry is “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). If the non-movant presents summary judgment evidence creating a genuine issue of material fact, summary judgment is not appropriate. Ragas v. Tennessee Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir.1998).

Analysis

A review of the summary judgment evidence indicates that there are several fact issues in this case preventing summary judgment. According to the evidence before the court, Mugworld ordered a total of nine containers of mugs from Marck. After the first five containers were delivered, a dispute arose between Mugworld and Marck over the quality of mugs. At that time, Mugworld cancelled the four containers of mugs that it had not yet received. As to the mugs that had already been delivered, Marck agreed to arrange for their pick-up and also arranged for one of its employees to come to Mugworld’s facilities to investigate the problems with the mugs. Bob Elliot, a salesman for Marck, visited Mugworld on August 22, 2005 to examine mugs from the five containers of mugs delivered to Mug-world. Following that visit, on September 6, 2005, Gary Marck, Marck’s owner, sent an email to Mugworld that stated:

We are sorry that you were not pleased with the Rich Neely coated mugs. Please continue with your selection of the five containers. Keep those items that you can use. We will credit you for all the mugs not acceptable to you along with your cost of sorting. See Exhibit B to Dkt. 182.

While the agreement to allow Mugworld to return the mugs and “credit Mugworld” is undisputed, the meaning of the agreement appears to be very much at issue. Primarily, there is a fact issue as to whether “credit” meant a full credit or a credit with offsets. A September 13, 2005 email from Mugworld to Marck indicates the mugs would be returned for “full credit.” See Plaintiffs Ex. 127 at page 6 of Dkt. 165.1 But, subsequent correspondence indicates Marck intended to offset its costs and expenses before issuing Mugworld a credit. See Exhibit E to Dkt. 182.

Moreover, there is a fact issue as to whether Marck would credit Mugworld’s account for future purposes or issue it a refund check. While the term “credit” usually suggests that at a customer’s accounts would be credited for future purposes, some of the summary judgment indicates that the parties’ use of the term “credit” in this case, in fact, meant a refund. For example, Marck’s September 21, 2006 comment that “[mjaybe sometime in the future we can do some business together” in an email sent after it agreed to credit Mugworld suggests that Mug-world’s monies would be refunded. See Exhibit I to Dkt. 182. However, a September 29, 2005 email from Marck to Mug-world requests information in order to “process the credit and apply on your ac[658]*658count,” suggesting Mugworld would have an open account with Marck with monies available for spending in the future. See Exhibit D to Dkt. 182. It is not clear from the summary judgment evidence what the parties intended.

Mugworld has argued that Gary Marck’s September 28, 2005 response of “OK” to Mugworld’s September 27, 2005 email demanding a statement and a refund check created a binding contract to send a full and immediate refund, not a credit.

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Mugworld, Inc. v. G.G. Marck & Associates, Inc., 563 F. Supp. 2d 654, 2007 U.S. Dist. LEXIS 62224 (E.D. Tex. 2007).

563 F. Supp. 2d 654 (Mugworld, Inc. v. G.G. Marck & Associates, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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