Law School Case Brief
Emirat AG v. High Point Printing LLC - 248 F. Supp. 3d 911 (E.D. Wis. 2017)
Summary judgment is proper if the depositions, documents or electronically stored information, affidavits or declarations, stipulations, admissions, interrogatory answers or other materials show that there is no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law.
Emirat AG, whose business included business risk management and related promotional aspects, entered into a contract with Sabafon for the printing of 25 million scratch-off phone cards. Emirat then contacted High Point Printing LLC (High Point), a commercial printer and print broker, regarding obtaining scratch-off cards. Thereafter, certain employees of High Point visited the plant of WS Packaging Group, Inc. (WS Packaging), and discussed WS Packaging’s ability to print the cards. According to a High Point employee, at this initial meeting, a WS Packaging employee represented that WS Packaging could print the cards securely. Thereafter, Emirat obtained a quote from High Point regarding the printing of 25 million scratch-off cards, and a contract was entered into between the parties. The High Point quote, as accepted by Emirat, did not contain any reference to card security. Subsequently, High Point and WS Packaging entered into a Letter of Indemnification agreement, stating among other things, that WS Packaging would assume responsibility only for the accuracy of the printing. Thereafter, High Point subcontracted with WS Packaging to print the cards. Testing of the cards for their security proved satisfactory. When the shipment of the cards reached Sabafon, the latter told Emirat that the cards were not in numerical order and that there were not 500 cards in each tray. Further, Emirat became aware that some of the cards could not be found in a serial number database that WS Packaging had provided with the cards. Over the next several months, WS Packaging, High Point, and Emirat negotiated a Settlement Agreement, under which, WS Packaging agreed to issue to High Point, who in turn agreed to issue to Emirat, a credit toward the invoices for the next shipments of scratch-off cards. Upon the next shipment of the cards, it was found out that upon examination of some of the cards with an ordinary household flashlight, phone-card PINs could be seen. Emirat then sued both WS Packaging and High Point. Emirat and WS Packaging have filed cross-motions for summary judgment. Emirat argued that WS Packaging’s liability is primarily based on its breach of Settlement Agreement when the latter provided defective scratch-off cards.
- Is plaintiff Emirat entitled to summary judgment?
- Did WS Packaging breach their Settlement Agreement by providing defective scratch-off cards?
According to the federal district court, in a motion for summary judgment, the moving party was the one who bears the initial burden of demonstrating it was entitled to summary judgment. Once the burden was met, the nonmoving party must designate specific facts to support or defend each element of its cause of action. In the case at bar, no contract specified the security level required for the game cards. There was only an assumption that the cards would be “secure,” but nothing explicitly defined the term “secure” in the context of the parties’ contract. Hence, the Court held that at the very least, there were genuine disputes of material fact as to what the security standard for the cards was and whether the scratch-off cards were defective in consideration of such a standard. The Court thereby concluded that Emirat’s motion for summary judgment should be denied. Anent Emirat’s argument that WS Packaging breached the Settlement Agreement, the Court held that the Agreement provided no contractual basis or Emirat's claims about the quality or condition of the game cards. WS Packaging made no promises in the Settlement Agreement regarding product specifications or quality. Any promises regarding the product must come from something other than the Settlement Agreement.
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