The maker of Chalk Paint was granted partial summary judgment by the U.S. District Court for the Eastern District of Louisiana after suing its United States distributor alleging breach of contract.
Judge Mary Ann Vial Lemmon wrote the May 4 opinion for the court.
Annie Sloan Interiors Ltd., maker of Chalk Paint, is based in England. Louisiana resident Lisa Ricker purchased Chalk Paint online and called ASI to ask about buying it locally so it would be easier and less expensive, according to background information in the ruling. Annie Sloan Interiors was in the process of finding a U.S. distributor, and eventually Ricker and her husband, David Manuel, formed Jolie Design & Decor Inc. with another paint company to become ASI’s U.S. distributor for Chalk Paint.
The original contract was for 2010 and had no period specified as to when the contract would end the relationship between Jolie Design and Annie Sloan Interiors but said it would be enforced on a “perpetual basis," information in the ruling said.
Annie Sloan Interiors claimed it was concerned “with certain actions on the part of JDD that ASI deemed detrimental to its brand” and breached their 2010 agreement by expanding into other countries and not using the Chalk Paint or Annie Sloan guidelines.
In 2017, Annie Sloan Interiors filed a motion for declaratory judgment, claiming Jolie Design violated the 2010 agreement, which constitutes as notice to terminate the contract under Louisiana's Article 2024 in which a contract with no definite duration can be terminated at any time by any party.
Jolie Design claimed Article 2024 doesn’t apply “because the contract specifies that it will go on perpetually, it has a stated certain term of duration" and urged the court not to consider Louisiana intermediary court precedence because the rulings were not correct as they did not consider “the history of Article 2024, which indicates that it should be applied only to real estate and employment contracts, not general commercial contracts.” Jolie Design filed counterclaims as well to seek declarations that the actions Annie Sloan Interiors claims were a violation of the contract were within the rights of their 2010 contract.
Annie Sloan Interiors claimed Jolie Design's counterclaims should be dismissed for failure to state a plausible claim as the agreement didn’t give Jolie Design “carte blanche” to do whatever it liked without respect for Annie Sloan Interiors’ trademarks and guidelines.
Lemmon wrote that “The United States Court of Appeals for the Fifth Circuit recognizes that under the laws of several states contracts of an indefinite duration are terminable at the will of either party,” and that the court had to determine how the Louisiana Supreme Court might rule.
Finding that “the comments to Article 2024 indicate that it made the principles of the former Article 2686 generally applicable to all contracts, not just ones related to leases or employment," Lemon furthered that “this court will not accept JDD's invitation to find that the aforementioned Louisiana jurisprudence was wrongly decided”.
The court order dismissed in part and granted in part Annie Sloan Interiors' motions to dismiss Jolie Design's counterclaims and granted summary judgment to ASI, “finding that the 2010 Agreement is subject to Article 2024 because the contract is for an unspecified and undeterminable duration.”