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Division Six Sports, Inc. v. Finish Line, Inc. of Delaware

United States District Court, S.D. Indiana, Indianapolis Division

September 25, 2018

DIVISION SIX SPORTS, INC., Plaintiff,
v.
THE FINISH LINE, INC. OF DELAWARE, et al. Defendants.

          ORDER ON DEFENDANT'S MOTION TO DISMISS COMPLAINT (DKT. 22)

          SARAH EVANS BARKER, JUDGE

         Plaintiff Division Six Sports (“Division Six”), a California corporation, brought this breach-of-contract action in diversity against Defendant The Finish Line of Delaware (“Finish Line”), a Delaware corporation. Now before the Court is Finish Line's motion to dismiss the complaint for failure to state a claim on which relief can be granted, see Fed. R. Civ. P. 12(b)(6), arguing that no contract bound the parties at the time of the alleged breach. For the reasons explained below, Finish Line's motion is granted.

         Background

         The complaint, read together with the contractual instruments attached to it, see Fed. R. Civ. P. 10(c), alleges the following: Finish Line is a retailer of athletic footwear and apparel. Division Six is in the business of acquiring the excess inventory of such retailers and reselling it. In 2001, Division Six and Finish Line executed an agreement (“the 2001 Agreement”) under which Division Six was granted the exclusive right to purchase and resell certain products from Finish Line.

         Paragraph 9 of the 2001 Agreement established when and how the Agreement was to expire:

Term of Agreement
The term of this Agreement shall be eighteen months (18) commencing on March 1, 2001 (the Effective Date). The term may be extended by the written agreement of the parties prior to the expiration of the term or any extension thereof. If within six (6) months prior to the end of the term, Finish Line shall receive a bona fide, arm's length written offer from any third party to purchase the same or similar Finish Line Products that Division Six Sports is purchasing under the terms of this Agreement, then Division Six Sports shall have a right of first refusal for an additional eighteen (18) month period to extend this Agreement with Finish Line upon materially identical consideration and terms set forth in such third party's written offer. . . . If Finish Line does not receive a bona fide, arm's length written offer at any time within six months of the end of the term, then this Agreement will automatically renew for an additional eighteen (18) month term.

Dkt. 7 Ex. A, at 7-8 (internal subdivisions omitted).

         In 2002, before the 2001 Agreement expired, the parties amended it (“the 2002 Amendment”) in relevant part as follows:

Contract Extension
Finish Line would be amenable to adding language to Paragraph 9 of the Purchase Agreement to reflect a three year (3) extension of the agreement (ie. through August 31, 2005). In addition, should Finish Line not receive a bona fide, arm's length written offer from any third party at any time within six months of the end of said extended term, then the Agreement will automatically renew for an additional three (3) year extension.

Dkt. 7 Ex. C, at 2. The “would be amenable” language appears to be an artifact of Finish Line's posture as the offeror of the Amendment by letter to Division Six, which letter was then executed and returned by Division Six. Neither party argues that “would be amenable” undermines the validity of the Amendment.

         As amended, the 2001 Agreement was automatically renewed in 2005 for an additional three-year extension, expiring on August 31, 2008. The parties again amended the Agreement in 2008 (“the ...


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