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Steves and Sons, Inc. v. Jeld-Wen, Inc.

United States District Court, E.D. Virginia, Richmond Division

December 7, 2018

STEVES AND SONS, INC., Plaintiff,
v.
JELD-WEN, INC., Defendant.

          MEMORANDUM OPINION

          Robert E. Payne Senior United States District Judge.

         This matter is before the Court on the request of Steves and Sons, Inc. ("Steves") for declaratory relief respecting the Doorskin Product Agreement (the "Supply Agreement") executed on May 1, 2012 between it and JELD-WEN, Inc. ("JELD-WEN") . The request for declaratory relief appears first in Steves' Complaint (ECF No. 1) wherein Steves sought a declaratory judgment on seven issues. Steves' original post-trial briefs persisted in, and supported, those requests. JELD-WEN opposed declaratory relief. Upon consideration of the Complaint, the Jury Verdict, and the briefing, the Court concluded that, although there appeared to be a basis for some declaratory relief, the briefing was inadequate to determine whether such relief ought to be granted and, if so, to what extent. Accordingly, the Court issued an Order requiring further briefing from both sides (ECF No. 1790). In response to that Order, Steves submitted PLAINTIFF STEVES AND SONS, INC.'S MEMORANDUM IN SUPPORT OF DECLARATORY RELIEF (ECF No. 1793) (the "Decarlatory Relief Motion"). Therein, Steves specified that it now seeks declaratory relief only on four issues. They are:

(i) "the full range of JELD-WEN molded doorskin products" as set forth in Section 1 of the Supply Agreement means all doorskin designs currently manufactured by JELD-WEN or that may be manufactured by JELD-WEN during the remainder of the term of the Supply Agreement, such that the pricing provisions of the Supply Agreement shall apply to all doorskin designs currently manufactured by JELD-WEN or that may be manufactured by JELD-WEN during the remainder of the term of the Supply Agreement;
(ii) under Section 6 of the Supply Agreement, doorskin prices may increase or decrease as a percentage of the change in JELD-WEN's key input costs;
(iii) JELD-WEN is required to provide Steves with annual notice by November 30 of each year of the year-over-year percentage change (up or down) of the specified key input costs, and the resulting doorskin price increase or decrease to be charged for the following year (as JELD-WEN did in the price reduction notices sent by JELD-WEN in late 2012 and late 2013 (PTX-29, attached as Ex. 2, PTX-254, attached as Ex. 3)). Given the iterative nature of the method for calculating price changes under the Supply Agreement, and the fact that JELD-WEN has not provided Steves with key input cost change information for 2017, JELD-WEN must provide the accurate percentage changes in key input costs for 2017 in order to ensure accurate price changes as contemplated by the Supply Agreement going forward; and
(iv) in the first sentence of Section 8 of the Supply Agreement ("The [doorskins] will at all times be [1] of a quality satisfactory to STEVES, [2] meeting JELD-WEN's specifications, [3] fit for the intended purpose, and [4] subject to JELD-WEN's standard written warranty applicable to the [doorskins] (the Specifications')."), the term "Specifications" includes each of the four elements enumerated in the sentence, such that Steves is entitled to reimbursement pursuant to the terms of the Supply Agreement if door skins do not meet any one of the four elements.

         In their briefs, the parties have used shorthand designations to describe these four issues and the Court will make use of those designations in this Memorandum Opinion. For the reasons set forth below, the PLAINTIFF STEVES AND SONS, INC.'S MEMORANDUM IN SUPPORT OF DECLARATORY RELIEF (ECF No. 1793) will be granted in part and denied in part.

         DISCUSSION

         The Declaratory Judgment Act permits a court to declare an interested party's rights where there is an "actual controversy" before the Court. 28 U.S.C. § 2201(a). A declaratory judgment under that statute is only "appropriate "when the judgment will serve a useful purpose in clarifying and settling the legal relations in issue, and . . . when it will terminate and afford relief from the uncertainty, insecurity, and controversy giving rise to the proceeding.'" Centennial Life Ins. Co. v. Poston, 88 F.3d 255, 256 (4th Cir. 1996) (alteration in original) (quoting Aetna Cas. & Sur. Co. v. Quarles, 92 F.2d 321, 325 (4th Cir. 1937)); see also Ross v. Reed, 719 F.2d 689, 694 (4th Cir. 1983) (facts underlying declaratory relief must show a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment'" (quoting Golden v. Zwickler, 394 U.S. 103, 108 (1969)). Thus, w[w]here a declaratory judgment would not clarify future legal relations between the parties, the action serves no useful purpose and courts will not entertain it." Davison v. Plowman, 247 F.Supp.3d 767, 782 (E.D. Va. 2017), aff'd, 715 Fed.Appx. 298 (4th Cir. 2018) . Moreover, the power to award declaratory relief is discretionary, even if a controversy exists. Poston, 88 F.3d at 256.

         The declaratory relief that Steves requests is based on the jury's verdict wherein the jury decided certain disputes over provisions of the Supply Agreement. Contrary to JELD-WEN's contention, the fact that the resulting declaratory judgment would reiterate portions of the Verdict Form does not make Steves' request improper. Cf. Pitrolo v. Cty. of Buncombe, 589 Fed.Appx. 619, 628-29 (4th Cir. 2014) ("Whether the declaratory relief requested restates the verdict ... is not directly related to the question of whether an award of declaratory relief is warranted.")

         A. The "Full Range" Issue

         This issue arises under the term of Section 1 of the Supply Agreement which, in full, provides:

PURCHASE AND SALE: JELD-WEN hereby agrees to sell to Steves and Steves hereby agrees to purchase from JELD-WEN, molded doorskin products according to the terms and provisions of this Agreement. The products subject to this Agreement shall be the full range of JELD-WEN molded doorskins products (the "Products").

         At trial, the jury was called upon to decide whether JELD-WEN breached Section 1 of the Supply Agreement by overcharging Steves for the Madison and Monroe styles of doorskins. (Complaint, COUNT TWO). The jury held that JELD-WEN had "breached the Supply Agreement by overcharging Steves for Madison and Monroe doorskins." Jury Verdict, ¶ 6 (ECF No. ...


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