from the United States District Court for the Northern
District of Texas
PRADO, HIGGINSON, and COSTA, Circuit Judges.
C. PRADO, Circuit Judge:
September 2011, Jacked Up, L.L.C. ("Jacked Up") and
Sara Lee Corporation ("Sara Lee") signed a
licensing agreement whereby Sara Lee would produce and sell
energy drinks developed by Jacked Up. Shortly thereafter,
Sara Lee sold its beverage division to the J.M. Smucker
Company ("Smucker"). Smucker decided not to assume
Sara Lee's licensing agreement with Jacked Up, and in
November 2011, Sara Lee formally terminated the agreement.
Jacked Up brought suit against Sara Lee, alleging breach of
contract, breach of fiduciary duty, fraud, and fraudulent
inducement. Jacked Up joined claims against Smucker for,
among others, tortious interference with a contract and trade
secret misappropriation. The district court granted summary
judgment against Jacked Up on all claims. We AFFIRM in part,
REVERSE in part, and REMAND for further proceedings.
FACTUAL AND PROCEDURAL BACKGROUND
2011, Jacked Up was a small start-up company that sold energy
shots to convenience stores. Sara Lee was a large corporation
with multiple well-established food and beverage brands.
Jacked Up's founder and sole owner, Joe Schmitz, met some
Sara Lee employees at a trade show in early 2011. Schmitz and
the Sara Lee employees discussed creating a Jacked Up line of
dispensed teas, coffees, and cappuccinos. Sara Lee already
had an "Infusia" line of vitamin-infused teas under
the Pickwick brand, but these teas were not marketed as
energy drinks and did not sell well. Sara Lee saw a Jacked Up
line of beverages as an opportunity to enter the energy drink
market and "pioneer a brand new dispensed energy
several months of negotiations and product development,
Jacked Up agreed to license its brand name and proprietary
energy ingredients to Sara Lee in exchange for royalties.
Under the terms of the licensing agreement, Jacked Up would
sell its energy ingredients to Sara Lee and Sara Lee would
then manufacture and sell Jacked Up products. The parties
agreed to share marketing costs. In addition, the agreement
called for market testing. The initial term of the licensing
agreement was five years, followed by a three-year renewal
term. However, the licensing agreement featured a number of
termination clauses triggered by various events and dates.
termination provision, Section 14(b), gave either party
"the right to terminate this Agreement if it provides
written notice to the other party no later than 60 days prior
to any anniversary of the Effective Date." Sara Lee
proposed adding this termination provision while the parties
were finalizing the agreement. In an email, Sara Lee referred
to this provision as an "annual Termination clause"
affording both parties "the ability to terminate if
strategy changes or market conditions shift, etc."
Jacked Up accepted the added provision, describing it as
"adding limited right for either party to terminate at
anniversary dates of agreement."
negotiations, Sara Lee also requested a change-of-control
termination provision (Section 14(c)). In an email, Sara Lee
director of marketing Greg Immell explained that Sara Lee
wanted this provision "in the event North American
Beverage is purchased by a third party
company." Schmitz testified that this statement led him
to question Sara Lee "executives Mr. Drake and Mr.
Immell about any intent to sell the North American Beverage
[Division]." According to Schmitz, these executives
represented that Sara Lee "had no intent to sell the
business and that it was not discussing any sale to any third
party. They also represented that [Schmitz] did not need to
be concerned as under no circumstance would [Sara Lee sell]
the business and not include the License Agreement as part of
the deal." Jacked Up and Sara Lee finalized the
licensing agreement around September 28, 2011, with an
effective date of October 1, 2011.
early October 2011, shortly after the licensing agreement
went into effect, Sara Lee displayed Jacked Up products at a
convenience store trade show. According to Schmitz, a Sara
Lee worker at the show told him about an impending sale of
the company. Schmitz testified that he again asked Sara Lee
executives-Immell and director of sales Jim Whitaker-whether
Sara Lee was planning a sale. The executives, according to
Schmitz, again represented that Sara Lee was not selling its
October 24, 2011, Sara Lee publicly announced the sale of its
North American Beverage Division to Smucker; this sale closed
in early 2012. According to Schmitz, Sara Lee asked him to
participate in a telephone call around October 21,
2011. On that call, according to Schmitz, Immell
stated that [Sara Lee] was selling its coffee business to
Smuckers, that the License Agreement would not be part of the
[sale] to Smuckers, that [Sara Lee] was terminating the
License Agreement immediately at Smuckers' request, that
[Sara Lee] would no longer perform any obligations under the
agreement, and that [Sara Lee] was discontinuing the Jacked
Up Energy Iced Teas, Coffees, and Cappuccinos.
testified that had he known of Sara Lee's impending sale
to Smucker, he would not have signed the agreement and would
not have launched Jacked Up products at the convenience store
recounted the late October telephone call somewhat
differently. According to Immell, he did tell Schmitz that
Smucker would not assume the licensing
agreement. But he also indicated that "Sara Lee
was interested in pushing forward with the proposed dispensed
energy iced tea product pursuant to the License Agreement,
including by pursuing the required market testing to see how
a Jacked Up branded dispensed energy iced tea would fare in
the marketplace." Schmitz refused to move forward with
market testing, however. Thus, according to Immell's
account, it was Jacked Up that violated the agreement first.
event, the deal quickly broke down. An internal Sara Lee
email dated October 26, 2011, suggests that Sara Lee had told
Jacked Up by then that the licensing agreement would not come
to fruition. An email from Sara Lee to Schmitz on November 4,
2011, further states that "Jacked Up Energy Tea is not
part of [the] sale and will be discontinued." Sara Lee
formally terminated the licensing agreement by letter on
November 18, 2011.
quickly as the licensing agreement broke down, it wound up in
court. Jacked Up brought a breach of contract claim against
Sara Lee in Texas state court on November 7, 2011-before Sara
Lee even sent its formal termination letter. After Sara Lee
removed the case to federal court, Jacked Up added Smucker as
a defendant, claiming that Smucker tortiously interfered with
the licensing agreement. Jacked Up later added claims for
breach of fiduciary duty, fraud, and fraudulent inducement
against Sara Lee, as well as a claim for common law trade
secret misappropriation against Smucker. Jacked Up based this
trade secret claim on the allegation that Smucker has used
Jacked Up formulas in its Pickwick-brand iced teas (a brand
it purchased from Sara Lee).
discovery, all three parties moved for summary judgment. In
connection with these motions, the parties moved to strike
certain summary judgment evidence. Jacked Up also requested a
continuance pursuant to Federal Rule of Civil Procedure 56(d)
in response to Smucker's summary judgment motion,
claiming that Smucker had not yet revealed what formula it
was using in its teas. The district court granted Sara
Lee's and Smucker's motions for summary judgment on
various grounds, denied the motions to strike as moot, and
denied Jacked Up's 56(d) request for a continuance. The
district court entered judgment in favor of Sara Lee and
Smucker on June 4, 2015. This appeal followed.
JURISDICTION AND STANDARD OF REVIEW
Up is a limited liability company whose sole member-Joe
Schmitz-is a Texas citizen. Sara Lee is a Maryland
corporation with its principal place of business in Illinois.
Smucker is an Ohio corporation with its principal place of
business in Ohio. Therefore, the district court had diversity
jurisdiction under 28 U.S.C. § 1332. This Court has
appellate jurisdiction under 28 U.S.C. § 1291.
review de novo a district court's grant of summary
judgment. Sierra Club, Lone Star Chapter v. Cedar Point
Oil Co., 73 F.3d 546, 562 (5th Cir. 1996). The Court
must view "the facts and inferences . . . in the light
most favorable to the nonmoving party." Id. at
562-63. Summary judgment is appropriate "if the movant
shows that there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of
law." Fed.R.Civ.P. 56(a). A genuine dispute of material
fact exists if the "evidence is such that a reasonable
jury could return a verdict for the nonmoving party."
Royal v. CCC & R Tres Arboles, L.L.C., 736 F.3d
396, 400 (5th Cir. 2013) (quoting Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986)). Additionally,
this Court reviews for abuse of discretion a district
court's denial of a Rule 56(d) motion for a continuance.
Am. Family Life Assurance Co. of Columbus v. Biles,
714 F.3d 887, 894 (5th Cir. 2013).
appeal, Jacked Up argues that issues of fact preclude summary
judgment on its breach of contract, breach of fiduciary duty,
fraud, and fraudulent inducement claims against Sara Lee, as
well as its tortious interference and trade secret claims
Claims Against Sara Lee
Breach of Contract
district court concluded that Sara Lee terminated the
contract in accordance with Section 14(b)'s plain
language. Jacked Up challenges the district court's
interpretation of Section 14(b), insisting that this
provision is ambiguous. In response, Sara Lee defends the
district court's interpretation of Section 14(b), and
further argues that even if the district court misinterpreted
this termination provision, Jacked Up fails to establish a
breach of contract claim.
Whether the district court misinterpreted the contract
contractual provision at issue in this case is Section 14(b)
of the licensing agreement, which states: "Either party
shall have the right to terminate this Agreement if it
provides written notice to the other party no later than 60
days prior to any anniversary of the Effective Date."
The district court found this provision unambiguous.
According to the district court, Section 14(b) permits
at-will termination during a "10-month window every
year." Because Sara Lee terminated the licensing
agreement during one such window-i.e., more than 60 days
before the first anniversary date-the court held that Sara
Lee did not breach the contract.
Up provides two alternative interpretations of Section 14(b).
In its principal brief on appeal, Jacked Up argues that the
word "anniversary" in Section 14(b) means the end
of the initial five-year term and the end of the subsequent
three-year renewal term. Jacked Up also offered this
interpretation before the district court. In its reply brief,
Jacked Up argues that Section 14(b) creates an annual right
to opt out of the contract. In other words, "if a party
gives notice 60 days prior to the anniversary of the
Effective Date, the License Agreement terminates at the end
of that calendar year. If neither party gives notice 60 days
prior to the anniversary of the Effective Date, the License
Agreement extends to another year."
parties agree that Illinois law controls the breach of
contract claim. Under Illinois law, "[t]he primary
objective in construing a contract is to give effect to the
intent of the parties." Gallagher v. Lenart,
874 N.E.2d 43, 58 (Ill. 2007). A contract "is to be
construed as a whole, giving effect to every provision, if
possible." Cent. Ill. Light Co. v. Home Ins.
Co., 821 N.E.2d 206, 213 (Ill. 2004). If words in the
contract "are clear and unambiguous, they must be given
their plain, ordinary, and popular meaning."
Id. "But if the contract is ambiguous, 'its
construction is then a question of fact, and parol evidence
is admissible to explain and ascertain what the parties
intended.'" Curia v. Nelson, 587 F.3d 824,
829 (7th Cir. 2009) (quoting Farm Credit Bank of St.
Louis v. Whitlock, 581 N.E.2d 664, 667 (Ill. 1991)).
Contractual language is ambiguous if it "is susceptible
to more than one meaning." Gallagher, 874
N.E.2d at 58. Whether a contract is ambiguous is a question
of law. Quake Constr., Inc. v. Am. Airlines, Inc.,
565 N.E.2d 990, 994 (Ill. 1990).
initial matter, the first interpretation offered by Jacked
Up-that Section 14(b) only permits termination at the ends of
the initial and renewal terms-is unreasonable. This
interpretation ignores the clear and unambiguous meaning of
"anniversary": "the yearly recurrence
of the date of a past event." Anniversary,
Random House Webster's Unabridged Dictionary (2d
ed. 2001) (emphasis added). Thus, Section 14(b) unambiguously
provides an annual right of termination.
real interpretive question in this case is when
termination is effective. Sara Lee argues, and the
district court held, that termination under Section 14(b) is
effective immediately. Jacked Up's second interpretation,
by contrast, implies that termination is effective at the end
of the year. Both interpretations have some merit.
plain language of Section 14(b) favors Sara Lee's
interpretation. Section 14(b) simply affords each party
"the right to terminate . . . if it provides written
notice." The provision does not state that termination
is effective at some later date. The provision could ...