United States District Court, E.D. Louisiana
ANNIE SLOAN INTERIORS, LTD.
DAVIS PAINT CO. AND KEVIN OSTBY
ORDER AND REASONS
ANN VIAL LEMMON UNITED STATES DISTRICT JUDGE.
IS HEREBY ORDERED that defendants's
12(b)(6) Motion for Partial Dismissal (Rec.
Doc. 12) is GRANTED.
matter is before the court on the 12(b)(6) Motion for Partial
Dismissal filed by defendants, Davis Paint Company
("Davis") and Kevin Ostby, in which defendants seek
dismissal of counts one through three of plaintiff's
complaint. Plaintiff, Annie Sloan Interiors, Ltd.
(ASI"), opposes the motion.
the creator of a line of decorative paint products sold under
the ANNIE SLOAN® and CHALK PAINT® trademarks. Davis
is the American manufacturer of ASI's paint products, and
Ostby is Davis's president. Until recently, non-party
Jolie Design & Décor, Inc. (“JDD”),
was the American distributor of ASI's paint products,
through a tripartite manufacturing agreement among ASI, JDD,
tripartite manufacturing agreement (hereinafter,
"Agreement") was entered into among ASI, JDD, and
Davis in April, 2010. Under the Agreement, Davis was the
manufacturer of paint for ASI, the supplier, which was
distributed by JDD, the distributor.
to signing the Agreement, Davis had been manufacturing the
paint for ASI without a formal written agreement. ASI alleges
that when ASI began discussing the Agreement with Davis in
2010, Ostby, on behalf of Davis, promised ASI that Davis
would not use the formula developed for ASI for anyone else.
principal Lisa Rickert apparently took the lead on drafting
the Agreement. Accordingly, Rickert sent a draft contract to
Davis and ASI on April 6, 2010. Rec. Doc. 12-2. The next day,
Davis, through Kevin Ostby, wrote back identifying several
changes required for it to sign off on the Agreement.
Specifically, he required that the Agreement be modified to
reflect that "Davis Paint owns the current formula that
we use to manufacture the Annie Sloan Chalk paint. While it
is not our intent to sell chalk paint, or chalk paint for
furniture to anyone else. We may, in the course of our
business, develop another use for this formulation."
Agreement was executed on April 21, 2010, with the
alterations required by Davis incorporated therein.
Specifically, in the "Confidential Information"
section of the Agreement, the provision "Written
Technical data, drawings, plans and engineering in technical
instructions pertaining to the Products are recognized by
Manufacturer [Davis] and Distributor [JDD] to be secret and
confidential and to be the property of Supplier [ASI]"
in the initial draft was specifically revised to
provide:"Written Technical data, drawings, plans and
engineering in technical instructions pertaining to the
Products are recognized by Supplier [ASI] and Distributor
[JDD] to be secret and confidential and to be the property of
Manufacturer [Davis]." (Emphasis supplied.)
well, while the Agreement was drafted to include two
exclusivity provisions, namely, that Davis was the exclusive
manufacturer of products in the territory, and that JDD was
the exclusive distributor of products in the territory, there
was no reciprocal exclusivity provision in favor of ASI.
termination of the parties' Agreement, Davis ultimately
reached an agreement to manufacture paint for Jolie Home, LLC
("JHL"), a new company formed by JDD principal Lisa
Rickert and others. Davis discontinued manufacturing paint
September 6, 2018, ASI filed the instant action against Davis
and Ostby, asserting claims for (1) breach of contract in bad
faith, (2) detrimental reliance, (3) misrepresentation, (4)
contributory infringement and unfair competition, and (5)
violations of Louisiana's Unfair Trade Practices Act
(“LUTPA”). ASI does not allege a breach of the
respect to the first three claims, which are the subject of
the instant motion, ASI argues that in manufacturing paint
for JHL, Davis violated a separate exclusivity agreement,
predating but not integrated into the tripartite Agreement,
in which Davis agreed to manufacture its chalk paint
exclusively for ASI in perpetuity. ASI further contends that
it detrimentally relied on Davis's promise of
exclusivity, that Davis and Ostby misrepresented the fact
that they did not intend to honor the exclusivity promise,
and that ASI justifiably relied on this misrepresentation.
While the Complaint recites that "Ostby repeatedly
communicated his promises of exclusivity to Annie Sloan and
to others at ASI, both orally and in writing, the sole
specific allegation supporting this claim states: "For