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Zucker Feather Products, Inc. v. Holiday Image, LLC

United States District Court, Western District of Missouri, Central Division

April 21, 2015

ZUCKER FEATHER PRODUCTS, INC., Plaintiff,
v.
HOLIDAY IMAGE, LLC, Defendant.

ORDER

NANETTE K. LAUGHREY UNITED STATES DISTRICT JUDGE

From approximately 2011 to 2014, Defendant Holiday Image has had a contract with non-party Victoria’s Secret to produce various holiday décor items for display in Victoria’s Secret stores during the holiday season. As part of this agreement, Holiday Image agreed to produce decorative feather wings. This lawsuit arises out of a contract between Holiday Image and Plaintiff Zucker Feather Products whereby Zucker Feather agreed to manufacture and deliver those feather wings on behalf of Holiday Image for Victoria’s Secret’s 2014 seasonal displays.

After Zucker Feather produced the wings and delivered them to Victoria’s Secret, Victoria’s Secret refused to pay Holiday Image the full contract price for the wings. In turn, Holiday Image refused to pay Zucker Feather the full contract price for the wings under their separate agreement. As a result of Holiday Image’s non-payment, Zucker Feather filed this lawsuit alleging breach of contract, suit on account, quantum meruit, and unjust enrichment.

Holiday Image filed a First Amended Counterclaim alleging Zucker Feather tortiously interfered with the contract between Holiday Image and Victoria’s Secret and that Zucker Feather breached a confidentiality agreement it had with Holiday Image. Before the Court is Zucker Feather’s Motion to Dismiss First Amended Counterclaim with Prejudice, [Doc. 27].

The Motion is granted in part and denied in part. The claims in the First Amended Counterclaim are dismissed, but without prejudice.

I. Background

Plaintiff Zucker Feather manufactures and supplies wholesale feather products. Defendant and Counterclaimant Holiday Image provides custom holiday décor and seasonal visual displays to malls, stores, hotels, and office buildings. Since approximately 2011, Holiday Image had a contract with Victoria’s Secret whereby Holiday Image agreed to produce various holiday décor items, including feather wings, for use in Victoria’s Secret’s seasonal displays. Zucker Feather manufactured the feather wings for Holiday Image, who in turn sold the wings to Victoria’s Secret.

On July 23, 2013, Zucker Feather, its Chinese factory, and Holiday Image entered into a Confidential Disclosure Agreement. The Agreement prohibits the use of specific “Information” described therein for any purpose other than selling to Holiday Image. [Doc. 20-1]. The “Information” could not be used “to deal directly with any of the customers or persons listed in Paragraph 21” of the Agreement. Id. at p. 1, ¶ 5.

In mid-2014, Holiday Image submitted multiple purchase orders to Zucker Feather for the manufacture of feather wings. The 2014 wing orders were manufactured in China at Zucker Feather’s factory, and Zucker Feather delivered them directly to Victoria’s Secret on behalf of Holiday Image. [Doc. 20, p. 1, ¶ 1]. Victoria’s Secret paid Holiday Image thirty percent of the amount it had agreed to pay Holiday Image for the wings, but withheld the remaining balance and reserved the right to claim the wings were non-conforming. Id. Although Victoria’s Secret accepted the wing shipment and did not return any of the wings, Victoria’s Secret did not pay the remaining balance on the contract between it and Holiday Image. Id. In turn, Holiday Image did not pay Zucker Feather the full balance due under the purchase orders for the wings.

Holiday Image alleges “upon information and belief” that prior to the filing of this lawsuit, Zucker Feather contacted Victoria’s Secret and offered to produce the 2014 holiday wings “for [Victoria’s Secret] at less than the price agreed upon between” Holiday Image and Victoria’s Secret. Id. at p. 19, ¶ 3. Holiday Image offered to dismiss its counterclaims against Zucker Feather if Zucker Feather “would execute a declaration of compliance with the Confidential Disclosure Agreement, ” but Zucker Feather refused to do so. Id. at p. 20, ¶¶ 11-12.

II. Discussion

Zucker Feather argues both counts of the Counterclaim should be dismissed because they are based solely on “information and belief” and because they fail to state claims upon which relief may be granted. To survive a motion to dismiss, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.”’ Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. “While plaintiffs may at times plead upon information and belief” – for instance, when facts are peculiarly within the opposing party’s knowledge – the Eighth Circuit “emphasize[s] that information and belief does not mean pure speculation.” Pope v. Fed. Home Loan Mortg. Corp., 561 Fed.Appx. 569, 573 (8th Cir. 2014).

A. Count I: Tortious Interference with Contract

In Count I of its Counterclaim, Holiday Image alleges “upon information and belief” that Zucker Feather contacted Victoria’s Secret and offered to sell the 2014 wings for less than the price agreed upon between Holiday Image and Victoria’s Secret, and that this offer caused Victoria’s Secret to “not to comply with ...


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