Vinci Brands LLC v. Coach Services, Inc.

Background

This order concerns two related cases and Vinci Brands LLC’s motion to reconsider an earlier preliminary-injunction ruling. In the earlier ruling, the court denied Vinci’s preliminary-injunction motion in large part and granted it in part. The court granted in large part and denied in part the cross-motion filed by Coach Services, Inc. and Kate Spade LLC, which the order refers to together as KSNY.

Vinci timely moved for reconsideration of the portions of the earlier ruling that denied Vinci’s request and granted KSNY’s request. The court explained that reconsideration is available only when a party identifies an intervening change in controlling law, new evidence, or a need to correct clear error or prevent injustice. It also stated that reconsideration cannot be used to relitigate old issues, present new theories, or raise arguments that could have been made earlier.

Reasons for Denial

The court rejected Vinci’s argument that it had not breached Section 11.10 of the license agreement. That provision required Vinci to notify Kate Spade if a lender delivered a written default notice and, as a result, accelerated the debt or exercised default remedies against Vinci’s assets. The court concluded that sale notices from Siena Lending Group, LLC and Case-Mate, Inc. showed an existing acceleration because the proposed sale proceeds would satisfy all obligations and indebtedness owed by Vinci. The court also noted that Vinci had waived notice of intent to accelerate and notice of acceleration under the Siena loan agreement.

The court further held that, even if the debt had not been accelerated, Siena and Case-Mate had exercised default remedies against Vinci’s assets by transferring funds from Vinci’s bank account. The court stated that the fact KSNY may have received notice from Siena rather than directly from Vinci did not excuse Vinci’s obligation to notify Kate Spade under Section 11.10.

The court also rejected Vinci’s arguments concerning Section 11.8 of the license agreement. It found that Vinci’s argument that “any indebtedness” excluded amounts owed to Kate Spade was new and, in any event, inconsistent with the provision’s plain meaning. The court declined to consider Vinci’s new argument that good-faith disputes excused its nonpayment.

The court determined that Vinci’s force-majeure argument had already been raised and addressed. Based on the evidence, including testimony about Vinci’s ability to pay at least some amounts by the time of the second termination, the court rejected Vinci’s argument that force majeure excused its failure to pay. The court also rejected Vinci’s argument that its ability to pay depended entirely on another entity allowing it to use loaned funds. Finally, the court reiterated that it had previously found the parties renegotiated the payment schedule and that Vinci repeatedly acknowledged the guaranteed minimum royalties it owed.

Disposition

Judge Lorna G. Schofield ordered that Vinci’s motion for reconsideration was DENIED. The Clerk of Court was directed to close the motions at Dkt. 163 in Case No. 23 Civ. 5138 and Dkt. 110 in Case No. 23 Civ. 5409.