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Patton Wallcoverings, Inc. v. Kseri

United States District Court, E.D. Michigan, Southern Division

June 25, 2015

Patton Wallcoverings, Inc. and James J. Patton, Plaintiffs,
Rami Kseri, Defendant.


NANCY G. EDMUNDS, District Judge.

This matter comes before the Court on Defendant Rami Kseri's motion to dismiss. Plaintiffs Patton Wallcoverings, Inc. and James J. Patton claim that Defendant committed the torts of defamation and tortious interference with a business relationship by sending a "Press Release" to Plaintiffs' customers and clients. The "Press Release" concerned the outcome of a previous breach of contract action between these same parties and before this Court. For the reasons stated below, Defendant's motion is GRANTED IN PART AND DENIED IN PART.

I. Facts

Defendant Kseri is the owner, operator and sole employee of Elite International Enterprise, Inc. ("Elite"). (Compl. ¶ 3.) James Patton is the president and majority owner of Patton Wallcoverings, Inc. ( Id. ¶ 2.) From March 2010 until August 2011, Elite functioned as sales agent and distributor for Patton Wallcoverings in the Middle East. ( Id. ¶ 8). In March 2011, the parties formalized their agreement in a sales distribution contract. (Def.'s Mot., Ex. C, Elite International Enterprise, Inc. v. Patton Wallcoverings, Inc., et al., No. 12-14620, Dkt. 48 at 3, April 24, 2014.) On August 25, 2011, Patton sent Kseri an email stating essentially that, contrary to the terms of the previous agreement, Elite would no long have access to any of Patton Wallcoverings new product lines. ( Id. at 3-4; Compl. ¶ 10.) In October 2012, Kseri filed suit against Patton Wallcoverings, alleging that it had breached the parties' contract by limiting the product that it would make available to Elite. (Compl. ¶ 13.) On April 24, 2014, this Court ruled that Patton Wallcoverings' conduct constituted a breach of contract. ( Id. ¶ 18; see also Elite Int'l Enter., Inc. v. Patton Wallcoverings, Inc., No. 12-14620, 2014 WL 1652197, at *5 (E.D. Mich. Apr. 24, 2014) ("The Court finds, therefore, that there is no genuine dispute as to any material fact on the claim that Patton breached the contract by limiting Elite's ability to sell only older product lines."). Following a bench trial and subsequent motion practice regarding the damages calculation, this Court awarded Elite $222, 465.01 for lost profits as a result of Patton Wallcoverings' breach. ( Id. ¶¶ 19-21.)

On September 17, 2014, Defendant sent an email to several of Plaintiffs' competitors, agents, suppliers, and customers. ( Id. ¶ 25.) The email included an attachment styled as a "Press Release." ( Id. ¶ 26.) It read as follows (typos, grammatical errors, and emphasis as in original):

Press Release

As known almost to all, Since 2006 Elite International Enterprises, Inc. had built a solid name as an Exclusive Agent & Distributor in The Middle East & Africa for several wallpaper factories.

Norwall Group Inc. / Patton Wallcoverings is one of the fist companies that we worked with and had extraordinarily success as a result of devotion, dedication and hard work promoting the brand in the region at the time when the whole world was suffering from depression.

After 7 years of success and in spite of all the obstacles Norwall Group Inc. / Patton Wallcoverings was going through... Elite International Enterprises, Inc. was still able to perform sales regardless of all these difficulties... $2.7 Million in sales were made mainly from only 3 collections that had been developed and/or customized by Elite International Enterprises, Inc.

After the business partnership was established with DID Wallcoverings - Korea.

Unfortunately, things had changed! Unprofessional & Irresponsible behaviors were performed by Mr. Patton. Ignorance, Greed & Betrayal are the words we can describe the new joint venture did harvest! Patton Wallcoverings represent by Mr. James Patton decided to cut Elite International Enterprises, Inc out totally forgotten the fact that I have a valid contract for 3 years! After 2 years in courts, the outcome as the following:

After a bench trial in the United States District Court in Detroit, Judge Nancy Edmunds issued a judgment on September 15, 2014 in favor of Elite International Enterprises, Inc. and against Patton Wallcoverings in the amount of $272, 465.01.

Judge Edmunds earlier decided that Patton Wallcoverings breached Elite's three-year distribution contract by refusing to sell products to Elite International Enterprises, Inc. ( Id., Ex. A.)

Although styled as a "Press Release, " Defendant only sent the document to competitors, agents, suppliers, and customers of Patton Wallcoverings. This included Les Serban of Sherman Williams, Patton Wallcoverings' largest customer. After receiving the "Press Release, " Serban forwarded the email to Patton Wallcoverings, stating, "This does not paint Jim in a very flattering light...." ( Id. ¶ 36; Ex. B.) ...

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