Wheels Sports Group, Inc. v. Solar Communications, Inc.

194 F.R.D. 527, 1999 U.S. Dist. LEXIS 16917, 1999 WL 1938853
CourtDistrict Court, M.D. North Carolina
DecidedAugust 5, 1999
DocketNo. 1:97CV00937
StatusPublished
Cited by3 cases

This text of 194 F.R.D. 527 (Wheels Sports Group, Inc. v. Solar Communications, Inc.) is published on Counsel Stack Legal Research, covering District Court, M.D. North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wheels Sports Group, Inc. v. Solar Communications, Inc., 194 F.R.D. 527, 1999 U.S. Dist. LEXIS 16917, 1999 WL 1938853 (M.D.N.C. 1999).

Opinion

MEMORANDUM OPINION

BULLOCK, Chief Judge.

This matter comes before the court following a bench trial which concluded on January 25,1999. This action arises out of a contract dispute between Plaintiff Wheels Sports Group, Inc. (“Wheels”) and Defendant Solar Communications, Inc. (“Solar”). At trial the parties presented both witnesses and exhibits, as well as deposition testimony, for the-court’s consideration. After careful review of the exhibits, depositions, and testimony of the witnesses, including the witnesses’ demeanor, opportunity to acquire knowledge of the facts about which they testified, and interest in the case, as well as the parties’ post-trial submissions, the court makes the following findings of fact and conclusions of law pursuant to Rule 52(a), Federal Rules of Civil Procedure. Based on these findings and conclusions, the court will enter judgment for Defendant.

FINDINGS OF FACT

A. The Parties

1. Plaintiff Wheels was a North Carolina corporation with its principal place of business located in Mocksville, North Carolina. Wheels was engaged in the business of designing and marketing motor sports trading cards and other accessories. During the course of this litigation, Wheels merged with Racing Champions, an Illinois corporation, and is now known as Racing Champions South.

2. Defendant Solar is an Illinois corporation with its principal place of business located in Naperville, Illinois. Solar is engaged in the business of cutting, collating, and packaging trading cards for manufacturers.

B. Background and Claims

3. Pláintiff Wheels brought this action originally in the General Court of Justice, Superior Court Division, Davie County, North Carolina, on August 7, 1997. Defendant Solar subsequently removed the action to this court on the basis of diversity jurisdiction. Plaintiffs complaint is founded on common law* contract principles and presents the theory that by failing to collate the Crown Jewels Elite and Race Sharks trading card projects in a reasonable fashion Defendant breached the parties’ agreements.

C. The Parties’ Dealings Prior to the Crown Jewels Elite and Race Sharks Projects

4. The relationship between the parties began in 1993, when Wheels secured the services of Solar on a project called “Rookie Thunder.” This project represented Wheels’ fourth motor sports trading card product, but it was a much larger product than the first three. It totaled approximately 21,600,000 cards comprising 8,000 cases of cards, and it represented Wheels’ first full-set trading card product. On the Rookie Thunder project, Solar agreed to cut, collate, and package the cards.

5. Wheels provided Solar with sheets containing 100 trading cards, which Solar cut into single cards. The individual cards then were placed in a collating machine which mixed and packaged nine cards per pack. The packs were then placed into boxes, with thirty packs to the box. Finally, boxes were placed into cases, with each case containing ten boxes.

6. The foundation of most trading card products is a base set of cards, a set which may include as many eighty different cards, each with a picture of a different sports figure on it. When a consumer opens up a pack, he or she is most likely to receive a selection- of base cards. Most products also include smaller sets of insert or chase cards, which may include as many as ten or fifteen different cards or as few as one card. These cards are more rare than base cards and are often designed with an appealing enhancement, and thus they generally are more desirable to card collectors.1 Trading card [529]*529packs and display boxes typically present to the consumer the odds of receiving in a given pack an insert card from any of the various insert sets. Like almost every other card manufacturer, however, Wheels also includes a disclaimer with the ratios which states that “[s]tated odds are an average for the entire production run and are not guaranteed within an individual pack or box.”2

7. In the trading card packaging industry “collation” refers to the placement of the cards within the production run. It is important that the packager mix and collate the cards such that the distribution of the insert cards throughout the production run approximates the ratios advertised on the packs and boxes. Solar employees conceded at trial that they would “strive” to meet the stated odds on all Wheels projects. For example, if an insert set in Rookie Thunder included only one card, and the odds of receiving that card in a given pack were 1 in 300, then there should have been one card in every ten boxes (thirty packs per box) and one card in every ease (ten boxes per case). Thus, if the production run included 8,000 cases there should be 8,000 duplicates of this particular card. Although concentrating all 8,000 duplicates in four cases would meet the stated odds over the entire production run, such a distribution would represent poor collation. “Clustering” describes a collation pattern where a particular card appears multiple times within a box or case.

8. The Rookie Thunder project was plagued by card-cutting problems. These problems eventually led to a dispute between the parties, which concluded when Solar agreed to pay Wheels a sum of money and to issue it credits on future jobs together totaling over $600,000.00. The quote sheets used by Solar include reverse side terms entitled “Printing Trade Customs,” terms which are standard in the printing industry. These terms limit Solar’s liability to the extent of the invoice owed to Solar and require that notice of defective performance be given to Solar within thirty days of delivery. The quote sheet signed by Wheels for the Rookie Thunder project had been faxed, and Dan Correll of Wheels informed Peter Hudetz of Solar that he had never seen the reverse side terms. For this reason, Solar did not attempt to limit its liability for the cutting problems or to enforce the notice requirement contained in the Printing Trade Customs, and thus paid sums to Wheels far in excess of the invoice owed to Solar for the Rookie Thunder project.

9. Because of the significant exposure to liability Solar faced on the Rookie Thunder project, Hudetz made it clear to Correll that Solar would do business with Wheels in the future only if Wheels would agree to be bound by the reverse side terms contained on Solar’s quote sheets. Hudetz explained to Correll that he must agree to incorporate these terms into all future contracts between the two parties. On the next Wheels project packaged by Solar, a project called “High Gear I 1994,” Correll signed an original quote sheet containing the reverse side terms, and he and Hudetz discussed the terms. Based on this common understanding, Solar continued to perform collating and packaging services for Wheels.

10. Beginning with High Gear I 1994, Solar packaged a total of eight different trading card products for Wheels without incident. These projects were called “High Gear I 1994,” “High Gear II 1994,” “Crown Jewels of Racing 1995,” “High Gear 1995,” “Rodeo,” “Knight Quest,” “Viper 1996,” and “Crown Jewels Rodeo.” The agreements for these projects were consummated in the following manner. The first step required Cor-rell and Miles Atkins of Wheels to compile a specification sheet for the project.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
194 F.R.D. 527, 1999 U.S. Dist. LEXIS 16917, 1999 WL 1938853, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wheels-sports-group-inc-v-solar-communications-inc-ncmd-1999.