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Dispute stemming from bridal companies' break-up lingers after summary judgment rulings

By Kenneth Lowe | Jul 14, 2014

The saddest break-ups and messiest spats tend to come after years of happy matrimony, something Cook County-based bridal businesses House of Brides and Dessy Marketing & Distribution Inc. are likely learning as a lawsuit between the companies continues to play out in Chicago's federal court.

U.S. District Judge Sara L. Ellis late last month granted in part and denied in part Dessy's request for summary judgment on a multiple-count complaint House of Brides (HOB) filed following the uncoupling of the two companies after their 20-year relationship.

HOB sells wedding gowns made by a number of manufacturers to customers both in its retail stores and online, and until 2012, sold gowns made and distributed by Dessy.

Shortly after the couple's china anniversary, however, Ellis' ruling notes that the two companies "suffered a breakdown in their long business relationship due to a dispute over the shipment and payment for wedding attire."

In its suit, which was filed in circuit court and later removed to federal court, HOB alleges Dessy was late in its deliveries and delivered incorrect or defective dresses. It sued for breach of contract and warranty of implied merchantability, defamation and commercial disparagement, fraud and violations of the Consumer Fraud and Deceptive Practices Act.

Dessy then filed counterclaims, accusing HOB of not keeping current on payments it owed and bouncing three $50,000 checks toward the end of their business partnership. Its counterclaims alleged breach of contract and account stated.

Ellis on June 24 granted summary judgment to Dessy on all of the counts HOB lodged against it, with the exception of the breach of contract claim. She also denied Dessy's summary judgment request on its breach of contract and account stated counterclaims.

In denying Dessy’s summary judgment motion on the breach of conduct count, Ellis explained that both companies failed to prove their claims because "[n]either party has produced an overarching written contract governing the parties’ course of dealing."

"Dessy contends the parties had an at-will, order by order business relationship and has counterclaimed for breach of contract for failure to pay on purchase orders," Ellis wrote. "[House of Brides] articulates essentially the same position … but asserts the initial purchase order, twenty years ago, 'acted as a contract to open [HOB’s] account with verbal and implied terms and conditions.'"

In denying the company summary judgment on its counterclaims, Ellis said "[D]isposition on Dessy’s breach of contract claim is premature," because "the exact terms of the alleged contract between the parties cannot be determined on summary judgment" and Dessy failed to provide sufficient evidence for her to determine the matter.

Although she denied Dessy summary judgment on these points, Ellis ruled in the company's favor on the remaining counts HOB leveled against it.

Granting Dessy summary judgment on HOB's breach of implied warranty of merchantability claim, Ellis said that HOB failed to point to any specific facts showing that the dresses Dessy made were defective.

Also at issue was HOB's claim that Dessy overcharged it on shipping, an allegation it made under the state's Consumer Fraud and Deceptive Practices Act.

Ellis granted summary judgment to Dessy on this count, saying that “HOB complains about having to pay the additional freight charges but points to no facts to suggest the freight charges could possibly qualify as this kind of consumer or competitor-dictated sharp practice."

For similar reasons, the judge ruled in favor for Dessy on HOB's defamation and commercial disparagement count.

"Dessy admits that it informed customers that HOB’s account had been terminated for reasons of credit," Ellis wrote. "HOB fails to muster any facts to seriously challenge Dessy’s assertion that this statement was true ...  HOB points to no facts to dispute that Dessy terminated the business relationship in October 2012 for the credit reasons stated."

Records show this case is one of 238 cases, including 11 on Ellis' docket, that the court's Executive Committee last late month reassigned to U.S. District Judge Manish S. Shah.

Last year, President Barack Obama nominated Shah, a former prosecutor with the U.S. Attorney's Office, to fill a seat vacated by Judge Joan Lefkow's move to senior status. The U.S. Senate in April confirmed Shah's nomination to the federal bench.

The latest docket entry in the case notes that all the previously set dates in this case have been stricken as a result of the reassignment and that the court will set a date for a reassignment status conference by separate order.

Chicago attorney James K. Borcia of Tressler LLP represents HOB and Dessy is represented by Carmen David Caruso of Caruso & Roeder LLC in Chciago, as well as Texas attorney Richard A. Solomon.

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