Perez v. Figi's Companies, Inc.
5:15-cv-13559
S.D.W. VaJun 13, 2016Background
- Sandra Perez sued Charming Sales Co. One, Inc. (formerly Figi’s, Inc.) and Figi’s Companies, Inc. after a debt-collection letter and subsequent collection efforts concerning an alleged account balance.
- A September 9, 2013 "FINAL NOTICE" letter (pre-closing) threatened a collection fee; the account was referred to third-party collectors and a fee appeared on later statements.
- An Asset Purchase Agreement (APA) closed October 13, 2013, under which Charming sold assets to Figi’s; the APA expressly allocated liabilities, with Charming retaining pre-closing liabilities and Figi’s assuming post-closing operational liabilities.
- Plaintiff contends Figi’s can be liable as overseer during pre-closing operations, as assignee of the account, and for post-closing collection conduct; defendants argue the APA assigns pre-closing liability to Charming and limit Figi’s liability to post-closing acts.
- Evidence shows repeated collection calls and continued attempts to collect a collection fee after the October 13, 2013 closing; Figi’s removed the fee in April 2014.
- Court converted a Rule 12(b) motion to summary judgment, received supplemental briefing, and resolved liability split: pre-closing conduct belongs to Charming; post-closing conduct presents genuine factual disputes for a jury.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Figi’s is liable for the September 9, 2013 collection letter (pre-closing) | Perez: Figi’s had oversight pre-closing and/or is assignee of the account, so it can be liable | Figi’s: APA assigns pre-closing liabilities to Charming; Figi’s had not assumed those liabilities | Court: Figi’s not liable for pre-closing collection activity; motion granted as to conduct before Oct. 13, 2013 |
| Whether Figi’s can be held liable for collection activity after closing | Perez: Figi’s continued collection calls/fees after closing showing post-closing violations | Figi’s: seeks summary judgment contending no post-closing liability or no violation | Court: Genuine factual disputes exist about post-closing conduct; summary judgment denied on post-closing claims |
| Effect of the Asset Purchase Agreement’s allocation of liabilities | Perez: APA may be read to allow Figi’s oversight liability; extrinsic evidence could show intent otherwise | Figi’s: APA unambiguously allocates pre-closing liabilities to Charming; Delaware law governs APA construction | Court: APA unambiguous—Charming retained pre-closing liabilities; contractual allocation controls |
| Whether remaining facts require a jury or further proceedings | Perez: disputes about post-closing calls/fees raise triable issues | Figi’s: argued entitlement to judgment as matter of law | Court: Post-closing disputes preclude summary judgment; issues for jury/trial |
Key Cases Cited
- GMG Capital Investments, LLC v. Athenian Venture Partners I, L.P., 36 A.3d 776 (Del. 2012) (unambiguous contract language controls interpretation)
- Fraternal Order of Police, Lodge No. 69 v. City of Fairmont, 468 S.E.2d 712 (W. Va. 1996) (contract construction follows plain meaning under West Virginia law)
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standard when movant shows absence of genuine issue)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (standard for genuine dispute of material fact at summary judgment)
- Lee v. Lee, 721 S.E.2d 53 (W. Va. 2011) (use of extrinsic evidence where contract ambiguity exists)