Update (August 7, 2014): Verdict against Gander Mountain is affirmed by the United States Court of Appeals for the Eighth Circuit.
Businesses often work on a handshake and a promise. Sometimes some businesses then seek to re-neg based on the absence of a written contract. Sometimes they win. Sometimes they lose.
Update (July 16, 2013): (Under subject line: Gander Mountain Gloversville Glove Glut, Follow Up on Post-Trial Motions U.S. District Court Judge Patrick J. Schiltz (D. Minn.) can be pretty tough on lawyers. “[T]he Court precluded Grandoe from introducing evidence of such damages at trial, because Grandoe’s attorneys had inexplicably failed to disclose that evidence during discovery. This mistake appears to have cost Grandoe over $600,000.” Ouch.
This might make things a little prickly between Grandoe’s lawyers, who won over $2 million for their client, but, at least as Judge Schiltz sees it, Grandoe’s lawyers “inexplicably” and/or by “mistake,” left $600,000 off their client’s damages claim.
Gander Mountain lawyers, too, received at least a few stinging knuckle-wraps from the Court in the Court’s post-trial order. “Gander Mountain is an aggressive and slippery litigant…,” the Court says at p.13 of the Court’s 45-page order, and, at p.15, there’s this: “To explain this complete reversal, Gander Mountain’s counsel claimed that he had not read the entire RAC prior to the summary-judgment hearing. The Court finds this assertion impossible to believe. The RAC is only two pages long…”
Businesses must heed the message of Grandoe v. Gander Mountain: the “gotcha business tactic” of refusing to pay for merchandise because “there was no purchase order” will not fly when there is a widespread industry practice of oral agreements. This is probably particularly compelling where buyer and seller are working with custom-made merchandise.
Litigators must heed several messages of Grandoe v. Gander Mountain, including but not limited to: (1) beware of the tendency to focus disproportionately on liability at the expense, so to speak, of damages. Minnesota Litigator and its readers are in no position to second-guess Grandoe counsel in this case, in particular, without greater knowledge of the particulars but, as a general matter, this is an aspect of civil litigation too often short-changed or under-appreciated by trial lawyers, (2) beware of the risk of appearing like a feckless and capricious advocate by arguing “Document X is irrelevant” at one point in litigation and arguing “Document X is the critical and decisive evidence supporting your claim” at another point. We all love to exploit our license to argue “in the alternative” but it can come at the expense of credibility and cost you dearly (“I was not at the scene of the shooting that night, or, alternately, I shot the victim by accident”?) and (3) Review Fed. R. Civ. P. 50(a) AND (b) as you gear up for trial. If you don’t make an argument for judgment at the close of your case, you may very well be foreclosed from making the argument after trial. You are, after all, “renewing” a motion under Rule 50(b)…
Original Post (December 21, 2012): Congratulations to Plaintiff’s counsel, Lisa Lamm Bachman on the jury verdict obtained this month in the courtroom of U.S. District Court Judge Patrick J. Schiltz (D. Minn.).
There is a place called Gloversville, New York. Guess what they have traditionally manufactured and sold there. The problem faced in Grandoe v. Gander Mountain was a Gander Mountain glove glut for Grandoe, based in Gloversville. Grandoe proposed making gloves for Gander Mountain but there appears to have been some confusion over quantities.
This problem is actually very common in business and in business litigation. Often, it has to do with miscommunication, complex work flow, or, simply, changed market conditions (also known as buyer’s remorse).
Grandoe, on the other hand, emphasized that these were private label gloves – they bore Gander Mountain’s trademark and name. Grandoe reached a verbal agreement to make the gloves and now, they point out, they have a whole lot of Gander Mountain gloves that Gander Mountain does not want and which Grandoe cannot sell.
Time will tell whether Gander Mountain, relying on the terms and conditions that it provided, will seek to overturn the jury verdict on appeal.
Seth Leventhal is a Minnesota civil litigator who has similar experience representing a manufacturer who was given verbal assurances of a large purchase, did not get the follow up orders, and was stuck with the excess custom-made inventory. Buyers of custom-made product, in particular, should appreciate that reliance on written terms and conditions is far from an iron-clad defense in every case.