Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_18-cv-00253/USCOURTS-cand-3_18-cv-00253-2/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

TNF GEAR, INC., et al.,

Plaintiffs/Counter-defendants,

v.

VF OUTDOOR, LLC,

Defendant/Counter-plaintiff.

Case No.18-cv-00253 JSC

Consolidated Case No. 18-cv-4126 JSC 

ORDER RE: VF OUTDOOR’S

MOTION FOR SUMMARY 

JUDGMENT

Re: Dkt. No. 91

Plaintiffs William and Linda Vinci and TNF Gear, Inc., a Vermont corporation of which 

the Vincis are the sole shareholders, filed this civil action against Defendant VF Outdoor, LLC, 

which operates a division under the brand name “North Face.”1 Defendant filed counterclaims 

against Plaintiffs and KL Sport Inc., TNF Gear’s predecessor. The claims and counterclaims arise 

out of a business arrangement between the parties wherein TNF Gear acted as a reseller of The 

North Face merchandise.2 VF Outdoor’s motion for summary judgment is now pending before the 

Court. (Dkt. No. 91.) Having considered the parties’ briefs and having had the benefit of oral 

argument on July 29, 2019, the Court GRANTS VF Outdoor’s motion for summary judgment. 

There is no dispute of material fact as to VF Outdoor’s breach of contract counterclaims and 

Plaintiffs’ defenses to these claims fail as a matter of law, and Plaintiffs have failed to establish a 

genuine dispute of fact with respect to their claims for relief.

 

1 Plaintiffs initially brought suit against VF Corporation, VF Outdoor’s parent, as well but the 

Vermont District Court dismissed the claims against VF Corporation for lack of personal 

jurisdiction prior to transferring the action to this Court and Plaintiffs never moved in this Court to 

return them to the lawsuit.

2 All parties have consented to the jurisdiction of a magistrate judge pursuant to 28 U.S.C. § 

636(c). (Dkt. Nos. 26, 28, 50.)

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SUMMARY JUDGMENT EVIDENCE

VF Outdoor markets, distributes, and sells The North Face (hereafter “North Face”) 

apparel, outerwear, footwear, equipment, and accessories. (Dkt. No. 91-1, Erlick Decl. at ¶ 4.3) 

VF Outdoor sells North Face merchandise for resale to authorized third-party retail dealers, and 

directly to consumers at its own brick-and-mortar full-price and outlet stores, as well as on the 

internet at thenorthface.com. (Id.) To purchase North Face merchandise, a retailer submits a 

purchase order to VF Outdoor. (Dkt. No. 91-2, Long Decl. at ¶ 5.) 

In 1998, William and Linda Vinci founded KL Sports, Inc. which operated out of a 

storefront at the Tenneybrook Mall in Shelburne, Vermont. (Dkt. No. 94-1, Vinci Decl. at ¶ 3.) In 

2003, the Vincis started an ecommerce platform. (Id. at ¶ 5.) A year later, the Vincis transferred 

the majority of their operations to a storefront on College Street in Burlington, Vermont where 

they exclusively sold North Face products under the trade name The North Face at KL Sports. (Id. 

at ¶ 4.) 

In 2011, TNF Gear and KL Sports, Inc., executed a Multiparty Guaranty with VF Outdoor. 

(Dkt. No. 91-2 at ¶ 3; Ex. K.) The Guaranty provided that “to induce North Face to continue its 

Business Arrangement” with TNF Gear and KL Sports, Inc (the Guarantors), the Guarantors 

jointly and severally agreed to “unconditionally, absolutely, and irrevocably guarantee” the 

“prompt and complete payment” of “all loans, advances, debts, liabilities and obligations for 

monetary amounts” to VF Outdoor. (Id. at ECF 10.) The following year, TNF Gear submitted a 

Credit Application to VF Outdoor seeking a $1.2 million line of credit, which was approved. 

(Dkt. No. 91-2 at ¶ 4; Ex. L at ECF 19; Dkt. No. 32 at ¶ 25; Dkt. No. 51 at ¶ 25.

4

) The line of 

credit was secured by a personal guarantee from the Vincis. (Dkt. No. 91-2, Ex. L at ECF 20.)

In 2013, the Vincis began transitioning operations from KL Sport to TNF Gear, Inc., and 

 

3 Record citations are to material in the Electronic Case File (“ECF”); pinpoint citations are to the 

ECF-generated page numbers at the top of the documents.

4 This fact and others cited herein are based on facts alleged in the cross-complaint and crosscomplaint answer (Dkt. Nos. 32 & 51). See Lockwood v. Wolf Corp., 629 F.2d 603, 611 (9th Cir. 

1980) (holding that “failure to deny the allegation in its answer to the [] complaint constitutes an 

admission.”).

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the following year, they opened a second location in Burlington’s Church Street Marketplace 

which exclusively sold North Face products. (Dkt. No. 94-1 at ¶ 6.) VF Outdoor “encouraged and 

assisted [the Vincis] in becoming stand-alone dealers of exclusively The North Face products.” 

(Id. at ¶ 7.) As part of this process, “VF Outdoor contracted and paid for the fit-out” of both of the 

TNF Gear stores. (Id. at ¶ 8.) 

In 2015, the Vincis “were invited to participate in VF Outdoor’s newly established ‘Brand 

Partner’ program” which was “touted as providing benefits to a select group of specialty retailers 

with a demonstrated record of commitment to the brand.” (Id. at ¶ 15.) The Brand Program 

provided retailers with the option to purchase select merchandise at a 15% discount, with a 90-day 

payment window. (Id. at ¶ 16; Dkt. No. 91-1 at Exs. B & C.) The Vincis’ participation was 

“conditioned on increasing [their] season’s order by 15% over the prior year.” (Dkt. No. 94-1 at ¶

16.) In 2015, TNF Gear purchased approximately $1.5 million of North Face merchandise from 

VF Outdoor. (Dkt. No. 32 at ¶ 27; Dkt. No. 51 at ¶ 27.)

The Vincis also participated in VF Outdoor’s Dealer Co-op Advertising Program. (Dkt. 

No. 94-1 at ¶¶ 18, 22.) Under this Program, “dealers were eligible to receive ‘co-op’ 

reimbursement for pre-approved advertising in an amount of up to one percent of their net 

invoiced dollars of full-priced The North Face products.” (Id. at ¶ 18.) Eighty to ninety percent

of North Face retailers participated in the co-op advertising program—including all but one of 

North Face’s ten largest retailers. (Dkt. No. 91-1 at ¶ 6.) The program requirements are set out in

“The North Face Dealer Co-op Advertising Program Overview and Guidelines.” (Dkt. No. 91-1,

Ex. A.) The guidelines state that “[f]or assurance that your advertising content will comply with 

the advertising guidelines, which is a requirement for reimbursement, pre-approval is required for 

all dealer-created advertisements.” (Dkt. No. 91-1, Ex. A at ECF 9.) Among other requirements, 

to obtain co-op reimbursement, the advertising must comply with “the North Face Minimum 

Advertising Price (MAP) policy.” (Id. at ECF 19.)

The MAP policy allows for certain “break dates” during which North Face products that 

are discontinued at the end of a season may be featured in advertising for clearance of end-ofseason sales. (Dkt. No. 94-1 at ¶¶ 20-21; Dkt. No. 91-1, Ex. A at ECF 19.) The Vincis “always 

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complied with MAP [because] they could not risk losing such a significant source of advertising 

dollars”—the program afforded them a chance to receive “upwards of $20,000” annually. (Dkt. 

No. 94-1 at ¶ 22.) While dealers were not required to comply with the MAP policy, dealers who 

did not comply would forfeit their co-op reimbursement for 60 days, and would not accrue co-op 

funds during a 60-day suspension period. (Id. at ¶ 19; Dkt. No. 91-1, Ex. A at ECF 20.) Any new 

violation would restart this process. (Id.)

The MAP policy is also incorporated into the North Face Unilateral Online Dealer Policy 

which sets forth policy guidelines for retailers selling North Face products online. (Dkt. No. 94-1 

at ¶¶ 23-24; Dkt. No. 91-1, Ex. H at ECF 52.) It states that “failure to comply with the MAP 

policy will result in suspension of co-op funds and non-accrual pursuant to the MAP policy.” 

(Dkt. No. 91-1, Ex. H at ECF 53.) 

Between 2009 and 2016, Will Vinci sent VF Outdoor numerous emails regarding thirdparty MAP violations. (Dkt. No. 94-1 at ¶¶ 25-27.) Although VF Outdoor would occasionally 

respond, many times they did not respond at all. (Id.) In January 2015, VF Outdoor began 

“regularly offering” discounted North Face products online “slashing products by anywhere from 

30-50%.” (Id. at ¶ 30.)

In 2016, the Vincis were again invited to participate in the Brand Partner program. (Id. at 

¶ 31; Dkt. No. 91-1, Ex. C at ECF 34.) The program was similar to that of the prior year, although 

they were required to purchase more “‘Must Have’ product line assortments” and this “cost more 

than the [Vincis] could really afford.” (Dkt. No. 94-1 at ¶ 31.) “Spending on maintaining and 

promoting [the Vincis’] website, and purchasing increasing levels of inventory while sales 

floundered, required [the Vincis] to dig into [their] savings to keep the business operating.” (Id. at 

¶ 32.) During the 2015-2016 year, the Vincis put approximately $645,000 of their own money 

into the business. (Id.)

In February 2016, the Vincis attended a “Specialty Dealer Roundtable” convened by VF 

Outdoor in Boston, Massachusetts. (Id. at ¶ 38.) They met Francois Goulet VF Outdoor’s Vice 

President and General Manager of the America. (Id.) The Vincis raised their concerns about VF 

Outdoor’s ongoing discounting and “how it was ruining brand equity.” (Id.) Mr. Goulet assured 

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them “that the discounting would be coming to a halt.” (Id.) However, the Vincis later “learned 

that VF Outdoor had no intention of reigning in sales of discounted merchandise.” (Id. at ¶ 39

(citing a March 14, 2016 email).)

By early 2017, the Vincis’ business was “headed for failure.” (Id. at ¶ 40.) At Mr. 

Goulet’s suggestion, the Vincis considered selling their business to VF Outdoor and 

commissioned a business evaluation which “demonstrated the business was worth as much as 

$1.25 million, exclusive of inventory.” (Id.; Dkt. No. 94-1, Ex. 33 at ECF 126.) In response, in 

April 2017, VF Outdoor offered to take back unsold inventory and apply any credit from such 

inventory to TNF Gear’s outstanding balance of $615,000, assume the lease on the store on 

Church Street, and pay the Vincis $100,000 in exchange for all the other property in the Store 

belonging to TNF Gear. (Dkt. No. 94-1 at ¶ 40; Dkt. No. 94-1, Ex. 34 at ECF 136.) The Vincis 

rejected VF Outdoor’s offer. (Dkt. No. 94-1 at ¶ 41.)

On June 16, 2017, VF Outdoor notified TNF Gear in writing that it was terminating TNF 

Gear’s account and TNF Gear’s license to use the “The North Face” trademark as of June 30, 2017 

because of TNF Gear’s failure to pay its outstanding balance of $615,000 on the line of credit plus 

interest due. (Dkt. No. 91-1, Ex. F at ECF 45.) As a result, the Vincis’ bank, which had a security 

interest in TNF Gear’s inventory, took possession of the inventory and liquidated it. (Dkt. No. 94-

1 at ¶ 41.)

PROCEDURAL BACKGROUND

The Vincis and TNF Gear filed this civil action against VF Corporation in the Vermont 

District Court on May 23, 2017. (Dkt. No. 1.) Plaintiffs pled four claims for relief: (1) Breach of 

Contract; (2) Promissory Estoppel; (3) Breach of the Implied Covenant of Good Faith and Fair 

Dealing; and (4) Fraudulent Nondisclosure. Before Defendant appeared, Plaintiffs filed an 

amended complaint realleging the same four claims and adding VF Outdoor LLC as a Defendant. 

(Dkt. No. 5.) The Court transferred TNF Gear’s claims against VF Outdoor LLC to this District 

based on a forum selection clause in the parties’ Multiparty Guaranty Agreement. (Dkt. No. 22.) 

That action was assigned Case No. 18-253. A month later, the Vermont District Court granted 

Defendant VF Corporation’s motion to dismiss for lack of personal jurisdiction and granted in part 

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and denied in part VF Outdoor’s motion to dismiss the Vinci’s breach of contract and breach of 

the covenant of good faith and fair dealing claims under Rule 12(b)(6). (Case No. 18-4126, Dkt. 

No. 24.) VF Outdoor then moved to change venue to this District. (Id. at Dkt. No. 36.) The 

court granted the motion and the action was transferred to this District and assigned Case No. 18-

4126. (Dkt. Nos. 41, 42.) Both actions were thereafter consolidated. (Dkt. No. 71.) 

After the cases were transferred, but prior to consolidation, VF Outdoor filed 

counterclaims against the Vincis, TNF Gear, and TNF Gear’s predecessor KL Sport. (Dkt. No. 

32.) The counterclaim pleads six claims: (1) The Breach of Contract re: the Purchase Orders 

against TNF Gear; (2) Breach of Contract as to the Multiparty Guaranty against TNF Gear/ KL 

Sport; (3) Breach of Contract as to the Credit Application and Personal Guaranty against TNF 

Gear/the Vincis; (4) Account Stated against TNF Gear; (5) Open Book against TNF Gear; and (6) 

Quantum Valebant against TNF Gear. 

On June 6, 2019, VF Outdoor filed a motion for summary judgment as to its counterclaims 

and as to Plaintiff’s claims. (Dkt. No. 91.) That motion is now fully briefed and came before the 

Court for hearing on July 29, 2019. Trial is scheduled to commence on September 16, 2019.

LEGAL STANDARD

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. Proc. 

56(a). The Court must draw “all reasonable inferences [and] resolve all factual conflicts in favor of 

the non-moving party.” Murphy v. Schneider Nat’l, Inc., 362 F.3d 1133, 1138 (9th Cir. 2004). A 

fact is material if it “might affect the outcome of the suit under the governing law,” and an issue is 

genuine if “a reasonable jury could return a verdict for the non-moving party.” Anderson v. Liberty 

Lobby, Inc., 477 U.S. 242, 248 (1986). There can be “no genuine issue as to any material fact” 

when the moving party shows “a complete failure of proof concerning an essential element of the 

nonmoving party’s case.” Celotex Corp. v. Catrett, 477 U.S. 317, 323, (1986).

When the party moving for summary judgment does not bear the burden of proof at trial, 

the party has the burden of producing evidence negating an essential element of each claim on 

which it seeks judgment or showing that the opposing party cannot produce evidence sufficient to 

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satisfy her burden of proof at trial. Nissan Fire & Mar. Ins. Co., Ltd. v. Fritz Cos., 210 F.3d 1099, 

1102 (9th Cir. 2000). Once the moving party meets that burden, the non-moving party must show 

that a material factual dispute exists. California v. Campbell, 138 F.3d 772, 780 (9th Cir. 1998). 

When the party moving for summary judgment would bear the burden of proof at trial, “it must 

come forward with evidence which would entitle it to a directed verdict if the evidence went 

uncontroverted at trial.” C.A.R. Transp. Brokerage Co., Inc. v. Darden Rests., Inc., 213 F.3d 474, 

480 (9th Cir. 2000) (internal quotation marks and citation omitted). “In such a case, the moving 

party has the initial burden of establishing the absence of a genuine issue of fact on each issue 

material to its case. Once the moving party comes forward with sufficient evidence, the burden 

then moves to the opposing party, who must present significant probative evidence tending to 

support its claim or defense.” Id. (internal quotation marks and citation omitted).

EVIDENTIARY OBJECTIONS

VF Outdoor has raised a number of evidentiary objections regarding the evidence Plaintiffs

have submitted in opposition to its motion for summary judgment. For the most part, the objected 

to evidence is not material to the Court’s decision and it is thus unnecessary to resolve VF 

Outdoor’s objections. To the extent the Order cites to portions of Mr. Vinci’s declaration or the 

exhibits thereto to which VF Outdoor has objected, see Dkt. No. 94-1 ¶¶ 27, 39, Ex. 33, the Court 

is not relying on any hearsay evidence for the truth of the matter and thus any objection on that 

basis is overruled. See Fed. R. Evid. 801(c). The Court overrules VF Outdoor’s other objections 

to Exhibit 33 as the Court only cites to the exhibit as evidence that Plaintiffs obtained a business 

valuation, but not for the accuracy or contents of that evaluation. 

DISCUSSION

VF Outdoor insists that it is entitled to summary judgment on each of its breach of contract 

counterclaims as well as on Plaintiffs’ claims for breach of contract, promissory estoppel, breach 

of the implied covenant of good faith and fair dealing, and fraudulent nondisclosure. Plaintiffs 

counter that disputed issues of material fact preclude summary judgment on any of these claims.

A. VF Outdoor’s Counterclaims

To establish a breach of contract under California law, a claimant must show: “(1) the 

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contract, (2) the [claimant’s] performance or excuse for nonperformance, (3) [the opposing 

party’s] breach, and (4) the resulting damages to [the claimant].” Rutherford Holdings, LLC v. 

Plaza Del Rey, 223 Cal. App. 4th 221, 228 (2014). VF Outdoor contends that Plaintiffs breached 

the purchase orders and corresponding invoices, the multiparty guaranty, and the credit agreement 

and personal guaranty, by failing to pay the $615,637.78 owed on TNF Gear’s account with VF 

Outdoor. 

Plaintiffs do not dispute that each of these agreements—the purchase orders, the multiparty 

guaranty, and the credit agreement—constituted contracts. Nor could they. With respect to the 

purchase orders, the record reflects that TNF Gear submitted purchase orders to VF Outdoor for 

North Face merchandise and that in 2015-2016 TNF Gear purchased $2,130,000 in merchandise. 

(Dkt. Nos. 32, 51 at ¶¶ 15, 26-27.) Likewise, with respect to the multiparty guaranty, there is no 

dispute that TNF Gear and its predecessor KL Sport entered into the multiparty guaranty with VF 

Outdoor in October 2011, or that the multiparty guaranty is a contract. (Dkt. Nos. 32, 51 at ¶¶ 38; 

Dkt. No. 91-2, Ex. K.) Under the multiparty agreement, VF Outdoor agreed to continue the 

parties’ relationship and sell North Face goods to TNF Gear/KL Sport in exchange for an 

unconditional, absolute and irrevocable guarantee that TNF Gear/KL Sport will provide “prompt 

and complete payment when due...of all Obligations.”5 (Dkt. No. 91-2, Ex. K at ECF 10.) 

Finally, with respect to the credit application and personal guaranty, there is no dispute that TNF 

Gear submitted a credit application accompanied by a personal guaranty from the Vincis in March 

2012. (Dkt. Nos. 32, 51 at ¶¶ 22, 45.) Credit applications are contracts. See In re Amoroso, 222 

F. App'x 542, 543 (9th Cir. 2007) (citing Marin Storage & Trucking, Inc. v. Benco Contracting & 

Eng’g, Inc., 89 Cal.App.4th 1042, 1049–50 (2001)).

The record also establishes VF Outdoor’s performance on the contracts; that is, it provided 

Plaintiffs with North Face merchandise and extended Plaintiffs a line of credit. (Dkt. Nos. 32, 51 

 

5 Obligations is defined as “all loans, advances, debts, liabilities and obligations for monetary 

amounts from time to time owing by the Company [separately defined as KL Sport] or any of the 

other Guarantors [separately defined as TNF Gear/KL Sport] to the Beneficiary [separately 

defined as VF Outdoor], including, without limitation, any and all monetary amounts owed to the 

Beneficiary for Goods sold to or through the Company or any of the other Guarantors...” (Dkt. 

No. 91-2, Ex. K at ECF 10.)

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at ¶¶ 34, 46; Dkt. No. 91-2, Long Decl. at ¶ 8.) Plaintiffs further admit that they have not paid VF 

Outdoors approximately $615,637.78 for purchased merchandise. (Dkt. Nos. 32, 51 at ¶ 35; Dkt. 

No. 91-2, Long Decl. at ¶ 8.) VF Outdoor’s damages are the unpaid balance plus interest. See

Cal. Com. Code § 2709(1)(a) (“When the buyer fails to pay the price as it becomes due the seller 

may recover . . . the price (a) [o]f goods accepted” by the buyer.”); see also Cal. Civ. Code § 3302 

(“The detriment caused by the breach of an obligation to pay money only, is deemed to be the 

amount due by the terms of the obligation, with interest thereon.”).

Based on the record before the Court, VF Outdoor has satisfied its burden of demonstrating 

the absence of a genuine dispute of material fact on the essential elements of its breach of contract 

counterclaims. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986); see also Atl. Mut. 

Ins. Co., 891 F.Supp. at 513 (“Where the moving party has the burden of [proof at trial,] his 

showing must be sufficient for the court to hold that no reasonable trier of fact could find other 

than for the moving party.”). Thus, the burden shifts to Plaintiffs to “present significant probative 

evidence tending to support its claim or defense.” See C.A.R. Transp. Brokerage Co. v. Darden 

Restaurants, Inc., 213 F.3d 474, 480 (9th Cir. 2000). As discussed below, Plaintiffs have not met 

that burden.

Plaintiffs mount two arguments to Defendants’ contract claims. First, that the purchase 

orders included an “implied term” that the Vincis “would be afforded an opportunity to earn a 

profit on their merchandise,” but VF Outdoor deprived Plaintiffs of this opportunity by “putting 

itself in direct competition” with the Vincis such that they did not get the benefit of their bargain. 

(Dkt. No. 94 at 24:20-24.) Second, Plaintiffs insist that VF Outdoor’s failure to disclose that it 

was “flooding the market with massive amounts of closeout inventory” “vitiated” Plaintiffs’ 

obligation to pay the outstanding balance due on the already purchased merchandise. (Id. at 25:4-

5, 17-18.) Neither argument is availing.

Plaintiffs do not offer any legal authority or evidence in support of their benefit of the 

bargain defense; rather, they simply assert that an implied term of the purchase orders was that 

they would be able to earn a profit and that VF Outdoor “owed the Vincis some kind of warning.” 

(Dkt. No. 94 at 24:25-26.) But Plaintiffs do not identify any provision in the purchase orders 

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which guaranteed them a profit or required them to pay for merchandise received only if they were 

able to profit from their sales. In general, “[i]mplied terms are not favored in the law, and should 

be read into contracts only upon grounds of obvious necessity.” In re Marriage of Corona, 172 

Cal. App. 4th 1205, 1222 (2009). “A court may find an implied contract provision only if: (1) the 

implication either arises from the contract’s express language or is indispensable to effectuating 

the parties’ intentions; (2) it appears that the implied term was so clearly within the parties’

contemplation when they drafted the contract that they did not feel the need to express it; (3) legal 

necessity justifies the implication; (4) the implication would have been expressed if the need to do 

so had been called to the parties’ attention; and (5) the contract does not already address 

completely the subject of the implication.” Id. Plaintiffs do not argue that their benefit of the 

bargain defense satisfies even one of these required factors; nor does the evidence in the record 

support an inference that any of these factors could be satisfied, let alone all. Accordingly, 

Plaintiffs’ benefit of the bargain defense fails as a matter of law.

Plaintiffs’ failure to disclose defense is essentially a fraud in the inducement defense; that 

is, that VF Outdoor induced Plaintiff to participate in the Brand Partner Program and buy 

additional merchandise while concealing that it was liquidating large amounts of inventory. Fraud 

in the inducement is a subset of fraud which “occurs when the promisor knows what he is signing 

but his consent is induced by fraud.” Rosenthal v. Great W. Fin. Sec. Corp., 14 Cal. 4th 394, 415 

(1996) (internal citation and quotation marks omitted). Where such fraud exists, although the 

consent is induced by fraud, mutual assent is present and a contract is formed, but such a contract 

is voidable based on the fraud. See Vill. Northridge Homeowners Assn. v. State Farm Fire & Cas. 

Co., 50 Cal. 4th 913, 921 (2010). With fraud in the inducement, “the party seeking to void the 

contract must rescind under our statutory and common law rules. Rescission requires that the 

aggrieved party provide the other party to the agreement with prompt notice and an offer to restore 

the consideration received, if any.” Id. (internal citation and quotation marks omitted). Plaintiffs 

have not argued that they attempted to rescind the contract and the evidence is to the contrary. 

Although it is undisputed that Plaintiffs knew at least as of April 2016 that VF Outdoor was 

“regularly offering discounted The North Face products online, slashing prices by anywhere from 

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30-40%,” Plaintiffs continued to participate in the Brand Partner Program and accept merchandise 

from VF Outdoor throughout 2016. (Dkt. No. 94-1 at ¶¶ 30-31; Dkt. No. 91-2 at ¶ 8.) Plaintiffs’

failure to rescind the contract and return the merchandise precludes them from establishing the 

defense of fraud in the inducement. See Vill. Northridge Homeowners Assn., 50 Cal. 4th at 921.

6

Because there is no dispute of material fact as to VF Outdoor’s breach of contract 

counterclaims and Plaintiffs’ defenses to these claims fail as a matter of law, VF Outdoor is 

entitled to summary judgment on these claims.7

B. Plaintiffs’ Claims 

VF Outdoor also contends that it is entitled to summary judgment on Plaintiffs’ claims for: 

(1) Breach of Contract; (2) Promissory Estoppel; (3) Breach of the Implied Covenant of Good 

Faith and Fair Dealing; and (4) Fraudulent Nondisclosure. To prevail on its motion for summary 

judgment, VF Outdoor must show an absence of evidence to support “an element essential to 

[Plaintiffs’] case, and on which [Plaintiffs’] will bear the burden of proof at trial.” Celotex Corp. v. 

Catrett, 477 U.S. 317, 322 (1986). The Court addresses each claim in turn.

1) Plaintiffs’ Breach of Contract Claim

As noted above, to establish a breach of contract under California law, a claimant must 

show: “(1) the contract, (2) the [claimant’s] performance or excuse for nonperformance, (3) [the 

opposing party’s] breach, and (4) the resulting damages to [the claimant].” Rutherford Holdings, 

LLC v. Plaza Del Rey, 223 Cal. App. 4th 221, 228 (2014). Plaintiffs allege that their inventory 

purchases from 2001 forward gave “rise to settled expectations and an overarching contractual 

undertaking” pursuant to which “Plaintiffs were expressly obligated to follow and abide by 

Defendants’ marketing policies, including manufacturer approved pricing.” (FAC at ¶¶ 20-21.) 

Plaintiffs further allege that VF Outdoor “breached the terms of the parties’ contract by failing to 

 

6 Given Plaintiffs’ failure to show that they rescinded the contract, Plaintiffs have not established 

that the contract is voidable and the Court need not address whether they have otherwise 

established the elements of fraud in the inducement. Should it do so however, it would conclude 

that Plaintiffs have not.

7 VF Outdoor only seeks summary judgment on its breach of contract counterclaims contending 

that its common count claims are moot if summary judgment is entered in its favor on the breach 

of contract claims.

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enforce their own marketing policies, and by offering their products to competing retailers at deep 

discounts.” (Id. at ¶ 23.) While Plaintiffs’ complaint does not tether their breach of contract claim 

to a particular contract, Plaintiffs’ opposition to VF Outdoor’s motion for summary judgment 

clarifies that Plaintiffs’ claim is based on VF Outdoor’s failure to enforce the MAP. (Dkt. No. 94 

at 26:6-23.) At oral argument, Plaintiffs contended that VF Outdoor breached the MAP by 

offering its own products at a discount and by failing to enforce the MAP policy as to other 

resellers. Neither argument is availing.

The MAP policy is outlined in VF Outdoor’s The North Face Dealer Co-Op Advertising 

Program Overview and Guidelines. (Dkt. No. 91-1, Ex. A.) The Guidelines advises resellers:

(Dkt. No. 91-1, Ex. A at ECF 19.) The MAP policy includes detailed requirements for those 

retailers seeking co-op reimbursement for their advertising. (Id.) These requirements specify the 

type of advertising resellers can engage in and the language resellers can use with respect to 

advertising. (Id. at ECF 18-19.) Resellers who do not comply are ineligible for co-op 

reimbursement. (Id. at ECF 19.) 

VF Outdoor contends that the MAP policy only applies to resellers and not itself, although 

it “voluntarily complies with the MAP policy.” (Dkt. No. 91-1 at ¶ 7.) The Court need not reach 

this issue because even if the MAP policy applied to VF Outdoor, Plaintiffs have not offered any 

evidence that VF Outdoor breached the policy with respect to its own advertising. While 

Plaintiffs have submitted numerous screenshots of products being sold on thenorthface.com at a 

discount, they have not offered evidence showing that thenorthface.com advertised discounts to its 

products online. (Dkt. No. 94-1 at Exs. 40-47.) The following are forms of advertising covered 

by the co-op advertising policy and MAP:

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(Dkt. No. 91-1, Ex. A at ECF 10.) Plaintiffs have not offered evidence that VF Outdoor 

advertised discounts in any of these forms. Thus, Plaintiffs have failed to provide factual support 

for their breach of contract claim predicated on VF Outdoor’s breach of the MAP policy by 

offering its own products at a discount. 

Plaintiffs’ breach of contract claim based on VF Outdoor’s failure to enforce the MAP 

policy against third-party resellers fares no better. While Plaintiffs have offered evidence that they 

repeatedly complained about third-party resellers breach of the MAP policy to VF Outdoor, they 

have not offered any evidence that VF Outdoor reimbursed those allegedly non-compliant resellers 

their advertising costs. (Dkt. Nos. 94-1 at ¶¶ 25-26.) At oral argument, Plaintiffs admitted that 

they had no direct evidence that VF Outdoor had not reimbursed the non-compliant resellers. This 

lack of evidence is fatal to Plaintiffs’ breach of contract claim. The MAP states that resellers are 

“free to advertise and sell The North Face products at any price [they] deem appropriate,” but they 

will not receive reimbursement under the co-op advertising program unless they comply with 

MAP. (Dkt. No. 91-1, Ex. A at ECF 19.) Thus, any breach of contract claim based on VF 

Outdoor’s failure to comply with the MAP requires evidence that VF Outdoor actually reimbursed 

non-compliant resellers. Because Plaintiffs have not offered any such evidence, their breach of 

contract claim based on VF Outdoor’s failure to enforce the policy as to other resellers fails as 

well.

Likewise, to the extent Plaintiff’s breach of contract claim is tethered to the purchase 

agreements and Plaintiffs’ argument that the purchase agreements contained an implied term that 

they would make a profit from their purchases which VF Outdoor breached by failing to enforce 

the MAP pricing plan, this theory fails for the reasons discussed supra. See In re Marriage of 

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Corona, 172 Cal. App. 4th 1205, 1222 (2009) (“A court may find an implied contract provision 

only if [] the implication either arises from the contract’s express language or is indispensable to 

effectuating the parties’ intentions”).

Even if Plaintiffs had established the existence of an agreement which VF Outdoor 

allegedly breached, their breach of contract claim would still fail as a matter of law because the 

undisputed facts show that they have not performed on their part of the contract(s). Plaintiffs do 

not dispute that TNF Gear has an outstanding unpaid balance with VF Outdoor of $615,637.78. 

(Dkt. No. 91-2 at ¶ 8.) Plaintiffs’ lack of performance on the contract(s) precludes them from 

prevailing on their breach of contract claim. See Durell v. Sharp Healthcare, 183 Cal. App. 4th 

1350, 1367 (2010) (“[I]t is elementary that one party to a contract cannot compel another to 

perform while he himself is in default.”).

Because Plaintiffs have failed to demonstrate a factual or legal basis for their breach of 

contract claim, VF Outdoor is entitled to summary judgment on this claim.

2) Breach of the Implied Covenant of Good Faith and Fair Dealing

Plaintiffs also plead a claim for breach of the implied covenant of good faith and fair 

dealing. Unlike a breach of contract claim, a breach of the implied covenant claim is not based on 

the breach of an explicit contractual term; rather, “A breach of the implied covenant of good faith 

and fair dealing involves something beyond breach of the contractual duty itself.” Careau v. Sec. 

Pac. Bus. Credit, Inc., 222 Cal. App. 3d 1371, 1394 (1990). This is because every contract 

possesses an implied covenant of good faith and fair dealing in which “neither party will do 

anything which will injure the right of the other to receive the benefits of the agreement.” Foley v. 

Interactive Data Corp., 47 Cal. 3d 654, 684 (1988). As such, if the “allegations do not go beyond 

the statement of a mere contract breach and, relying on the same alleged acts, simply seek the 

same damages or other relief already claimed in a companion contract cause of action, they may 

be disregarded as superfluous as no additional claim is actually stated.” Careau, 222 Cal. App. 3d 

at 1395.

Here, Plaintiffs’ breach of the covenant of good faith and fair dealing claim is based on the 

same allegations as their breach of contract claim as well as the allegation that VF Outdoor 

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“breached the implied covenant of good faith and fair dealing by offering to purchase Plaintiffs’ 

business for only a small fraction of what it was worth, while at the same time forbidding 

Plaintiffs from accepting any competing offers for the purchase of their business.” (FAC at ¶ 35.) 

To the extent that Plaintiffs’ breach of the implied covenant claim is based on the same allegations 

as their breach of contract claim, it is superfluous of the breach of contract claim. The Court thus 

only addresses Plaintiffs’ allegation that VF Outdoor breached the covenant by undervaluing their 

business and precluding them from accepting competing offers for the business. 

Plaintiffs have offered evidence of a business evaluation which Mr. Vinci attests was 

commissioned after Francois Goulet suggested that the Vincis sell the business to VF Outdoor. 

(Dkt. No. 94-1 at ¶ 40; Ex. 33 at ECF 126.) The business evaluation contains a number of figures, 

but is not accompanied by an expert declaration or other explanation for the contents. (Id. at ECF

129-134.) Further, that Plaintiffs sent this business evaluation to VF Outdoor as part of the 

parties’ negotiations regarding the sale of the business to VF Outdoor does not show that VF 

Outdoor breach the implied covenant of good faith and fair dealing by offering less than the 

business evaluation as a counteroffer. See Careau, 222 Cal. App. 3d at 1395 (holding that breach 

of the covenant of good faith and fair dealing requires “a conscious and deliberate act, which 

unfairly frustrates the agreed common purposes and disappoints the reasonable expectations of the 

other party thereby depriving that party of the benefits of the agreement”). Plaintiffs have offered 

no evidence in support of their allegation that VF Outdoor precluded Plaintiffs from accepting 

competing offers to purchase the business.

Accordingly, Plaintiffs have not satisfied their evidentiary burden to support a breach of 

the implied covenant claim, and have not demonstrated that the claim is different from the one for 

breach of contract. VF Outdoor is thus entitled to summary judgment on this claim.

3) Promissory Estoppel

Next, Plaintiffs plead a claim for promissory estoppel. “The elements of a promissory 

estoppel claim are (1) a promise clear and unambiguous in its terms; (2) reliance by the party to 

whom the promise is made; (3) [the] reliance must be both reasonable and foreseeable; and (4) the 

party asserting the estoppel must be injured by his reliance.” Flintco Pac., Inc. v. TEC Mgmt. 

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Consultants, Inc., 1 Cal. App. 5th 727, 734 (2016) (internal citation and quotation marks omitted). 

Plaintiffs’ promissory estoppel claim is based on the same theory as their breach of contract claim; 

namely, that VF Outdoor imposed certain marketing policies which Defendants “promise[d] to 

enforce,” but it failed to do so and encouraged others to “flout” the policies while also violating 

the policies themselves.” (FAC at ¶¶ 26-29.) 

As a threshold matter, Plaintiffs’ promissory estoppel claim cannot be based on the same 

promises as their breach of contract claim—i.e., any promises purportedly contained in the MAP 

policy. See Raedeke v. Gibraltar Sav. & Loan Assn., 10 Cal. 3d 665, 672 (1974); Walker v. KFC 

Corp., 728 F.2d 1215, 1219 (9th Cir. 1984). In opposing summary judgment, the only specific 

promise Plaintiffs identify is the one Francois Goulet made to Mr. Vinci that VF Outdoor would 

soon halt online discounting. (Dkt. No. 94 at 27:3-6.) Mr. Vinci attests that Mr. Goulet told him 

at the February 2016 “Specialty Dealer Roundtable” that “the discounting would soon be coming 

to a halt.” (Dkt. No. 94-1 at ¶ 38.) This promise is not sufficiently definite to give rise to a claim 

of promissory estoppel. The promise must be “definite enough that a court can determine the 

scope of the duty[,] and the limits of performance must be sufficiently defined to provide a 

rational basis for the assessment of damages.” Garcia v. World Sav., FSB, 183 Cal. App. 4th 

1031, 1045 (2010). That VF Outdoor stated that discounting “would soon” come “to a halt” is 

vague at best—it provides no specific timeframe by which the Court could measure its 

performance. Further, by Mr. Vinci’s own admission, the Vincis were aware as of the following 

month that “VF Outdoor had no intention of reigning in sales of discounted merchandise.” (Dkt. 

No. 94-1 at ¶ 39.) Thus, even if the promise to halt discounting soon was an actionable promise, 

the Vincis’ reliance on it would be limited to the month of February 2016 and Plaintiffs have 

failed offer evidence of any harm resulting from their reliance on Mr. Goulet’s promise during this 

one-month period.

Accordingly, Plaintiff have failed to demonstrate a factual or legal basis for their

promissory estoppel claim and VF Outdoor is entitled to summary judgment on this claim.

4) Fraudulent Nondisclosure

Plaintiffs’ final claim is for fraudulent nondisclosure. The elements of a claim for 

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fraudulent nondisclosure (concealment) are: “(1) concealment or suppression of a material fact; (2) 

by a defendant with a duty to disclose the fact to the plaintiff; (3) the defendant intended to 

defraud the plaintiff by intentionally concealing or suppressing the fact; (4) the plaintiff was 

unaware of the fact and would not have acted as he or she did if he or she had known of the 

concealed or suppressed fact; and (5) plaintiff sustained damage as a result of the concealment or 

suppression of the fact.” Graham v. Bank of Am., N.A., 226 Cal. App. 4th 594, 606 (2014). 

Plaintiffs allege that from 2015-2017 VF Outdoor “changed their marketing policy, dumping large 

quantities of goods into the discount market,” that VF Outdoor failed to disclose this change in its 

marketing policy to Plaintiffs, and that had VF Outdoor disclosed these changes to Plaintiffs they 

would not have “sunk millions of dollars into inventory purchases and could have salvaged some 

value out of their business.” (FAC at ¶¶ 39-40.) While not clearly articulated in their opposition 

brief, it appears that Plaintiffs’ claim is premised on the following alleged nondisclosures: (1) that 

VF Outdoor planned to sell its own merchandise at a discount online, (2) that VF Outdoor did not 

itself comply with the MAP policy, (3) that VF Outdoor failed to disclose that it was not requiring 

other retailers to comply with the MAP policy, and (4) that VF Outdoor knew of increased 

closeout inventory in liquidation channels. The Court addresses each in turn.

First, Plaintiffs have not identified any evidence that reasonably supports the inference that 

VF Outdoor failed to disclose that it planned to sell its own merchandise at a discount online. To 

the contrary, the evidence reflects that on January 21, 2015, VF Outdoor advised Mr. Vinci of its 

new marketing plan and intent to offer its own product at a discount online. (Dkt. No. 91-3 at ¶ 8; 

Ex. T.) Mr. Vinci confirmed that he was aware of the planned discounting in an email to another 

North Face retailer, Alpine Outfitters, on January 23, 2015. (Dkt. No. 91-3 at ¶ 9; Ex. U.) 

Second, Plaintiffs have failed to offer evidence that VF Outdoor either promised that it 

would comply with the MAP policy or suggested that the MAP policy covered VF Outdoor’s

advertising activity. Again, the evidence is to the contrary. The MAP policy itself is directed at 

“Online Dealers and Online Dealer Affiliates.” (Dkt. No. 91-1, Ex. H at ECF 52.) There is no 

reference to the MAP policy applying to VF Outdoor’s advertising activity in the document 

outlining the policy or elsewhere. Indeed, the co-op advertising program on which the MAP 

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policy is based states that eligibility is limited to “[a]ny dealer who is authorized to sell The North 

Face products directly to the end user.” (Dkt. No. 91-1, Ex. A at ECF 9.) And given that the 

purpose of the policy was to allow dealers to obtain reimbursement from VF Outdoor it would not 

make sense for the policy to apply to VF Outdoor—it has no need to obtain reimbursement from 

itself. Further, as discussed supra, Plaintiffs have failed to offer any evidence that VF Outdoor did 

not in fact comply with the MAP policy.

Third, Plaintiffs have not offered evidence showing that VF Outdoor did not require other 

retailers to comply with the MAP policy. That is, as discussed supra, Plaintiffs have not identified 

evidence sufficient to support a finding that VF Outdoor in fact reimbursed advertising costs of 

third-party dealers who were non-compliant with the MAP policy. Absent evidence that VF 

Outdoor was not enforcing the policy by reimbursing other dealers who failed to comply, there 

was nothing for VF Outdoor to disclose. 

Finally, Plaintiffs have not offered evidence that VF Outdoor failed to disclose that it was 

increasing closeout inventory in liquidation channels. Plaintiffs do not dispute that they were 

aware of VF Outdoor’s liquidation practices and that as brand partners they were afforded early 

access to closeout inventory. (Dkt. No. 91-1 at ¶ 14; Ex. C at ECF 26.) To the extent VF 

Outdoor increased the amount of closeout inventory subject to liquidation in 2015, Plaintiffs have 

not offered any evidence which shows that VF Outdoor intentionally concealed this information 

from Plaintiffs. VF Outdoor, on the other hand, has offered evidence—that Plaintiff has not 

disputed—showing that it had no means of knowing in advance the volume of excess merchandise 

that might end up in liquidation channels because merchandise is manufactured months in advance 

based on sales volume estimates which are just that—estimates—that are subject to outside forces 

such as cancellation of orders or unusually warm winter weather. (Dkt. No. 91-1 at ¶¶ 12-13; Dkt. 

No. 91-4 at ¶ 54.)

To the extent that the Vincis have personal claims of fraudulent concealment, their 

personal claims based on these same alleged non-disclosures fail as to them for the same reasons. 

In addition, Plaintiffs have not established that VF Outdoor owed them any duty—where there is 

no fiduciary relationship between the parties, the duty to disclose arises “as a result of some sort of 

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transaction between the parties.” LiMandri v. Judkins, 52 Cal. App. 4th 326, 337 (1997). The 

Vincis have not offered any evidence of a transactional relationship between themselves and VF 

Outdoor (as opposed to between their businesses and VF Outdoor). The Vincis’ reliance on the 

Vermont District Court’s decision denying VF Outdoor’s motion to dismiss their individual 

fraudulent concealment claims as constituting “the law of the case” suggesting that the court 

already found in their favor on these claims is misplaced. (Dkt. No. 94 at 27:22-26.) The 

Vermont District Court denied a motion to dismiss the claim, it did not grant summary judgment 

for the Vincis’ on the claim. It also did not apply California law, which the Vincis concede apply 

to their claims. (Case No. 18-4126, Dkt. No. 24.) On summary judgment, the Vincis were 

obligated to offer evidence in support of their allegations. Because they have failed to do so, VF 

Outdoor is entitled to summary judgment.

Accordingly, Plaintiffs have failed to demonstrate a factual or legal basis for their 

fraudulent nondisclosure/concealment claim generally and as to the Vincis personally. VF 

Outdoor is therefore entitled to summary judgment on this claim. 

CONCLUSION

For the reasons stated above, the Court GRANTS VF Outdoor’s motion for summary 

judgment on its breach of contract counterclaims and on Plaintiffs’ claims. (Dkt. No. 91.) VF 

Outdoor is awarded damages in the amount of $615,637.78 plus interest from June 16, 2017.

Judgment will be entered separately in VF Outdoor’s favor against TNF Gear, KL Sports, 

William Vinci, and Linda Vinci jointly and severally.

IT IS SO ORDERED.

Dated: July 30, 2019

JACQUELINE SCOTT CORLEY

United States Magistrate Judge

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