In the

United States Court of Appeals

For the Seventh Circuit ____________________

No. 19-1070

DIVISION SIX SPORTS, INC.,

Plaintiff-Appellant,

v.

THE FINISH LINE, INC.,

Defendant-Appellee.

____________________

Appeal from the United States District Court for the

Southern District of Indiana, Evansville Division.

No. 1:17-cv-03879 — Sarah Evans Barker, Judge.

____________________

ARGUED MAY 23, 2019 — DECIDED JUNE 27, 2019

____________________

Before BAUER, MANION, and BRENNAN, Circuit Judges.

MANION, Circuit Judge. This case involves an alleged 

breach of contract between Plaintiff Division Six Sports, Inc. 

(“Division Six”) and Defendant The Finish Line, Inc. (“Finish 

Line”). The district court dismissed the case for failure to state 

a claim, holding the contract was not in force at the time of the 

alleged breach. Division Six argues on appeal that the district 

court misinterpreted the contract’s automatic renewal
2 No. 19-1070

provision. For the reasons below and those explained in the 

district court’s thorough analysis, we affirm.

I. Background

Finish Line is a large retailer of athletic shoes, apparel, and 

accessories. Through the course of its business, Finish Line 

generates a stock of surplus goods that includes aged merchandise (products that do not sell over time) and customerreturned merchandise. Division Six specializes in the resale of 

both aged and customer-returned athletic wear products.

In 2001, Finish Line and Division Six entered an agreement 

by which Division Six received the exclusive right to purchase 

aged and customer-returned merchandise from Finish Line 

(the “Agreement”). Paragraph 9 of the Agreement provided 

for an 18-month term “commencing on March 1, 2001” that 

could be extended by written agreement of the parties “prior 

to the expiration of the term or any extension thereof.” See 

App’x A. Paragraph 9 also gave Division Six a right of first 

refusal if Finish Line received a bona fide arms-length offer 

from a third party to purchase its surplus merchandise within 

six months prior to the term’s expiration. If Finish Line did 

not receive such an offer, the Agreement would “automatically renew for an additional eighteen (18) month term.” Id.

In 2002, the parties amended the Agreement (the “2002 

Amendment”). One effect of this amendment was to modify

Paragraph 9. The modification was set forth in a letter written 

by Finish Line, which stated:

Finish Line would be amenable to adding language to 

Paragraph 9 of the Purchase Agreement to reflect a 

three year (3) extension of the agreement (ie. [sic]

through August 31, 2005). In addition, should Finish 
No. 19-1070 3

Line not receive a bona fide, arm’s length written offer 

from any third party at any time within six months of 

the end of said extended term, then the Agreement will 

automatically renew for an additional three (3) year extension.

Both parties further agree that no other provisions of 

the Agreement shall be modified by this letter, and that 

all other terms and conditions of the Agreement shall 

remain in full force and effect and are hereby reaffirmed by the parties.

The Agreement was not re-drafted to reflect the language 

change contemplated in this letter. Instead, the letter itself 

served to memorialize the modification agreed to by the parties and was signed by both parties. The new extended term 

ran to the stated date of August 31, 2005, at which point it automatically renewed for a second three-year extension until 

August 31, 2008, all pursuant to the 2002 Amendment.1

In September 2008, Finish Line proposed another amendment (the “2008 Amendment”), once again by letter. This letter included the following:

Finish Line would be amenable to adding language to 

Paragraph 9 of the Purchase Agreement to reflect a 

new five (5) year term extension, commencing September 1, 2008 and ending December 31, 2013 ... unless 

sooner terminated pursuant to any provisions of the 

Governing Agreements.

 1 A second amendment was agreed upon in 2003, but it had no effect 

on Paragraph 9 and thus warrants no further discussion.
4 No. 19-1070

The 2008 Amendment further provided that “no other 

provisions of the Governing Agreements shall be modified by 

this ... Amendment, and that all other terms and conditions 

of the Governing Agreements shall remain in full force effect 

[sic] and are hereby reaffirmed by both parties.”

Despite the 2008 Agreement’s express ending date of December 31, 2013, Finish Line continued to ship products to Division Six in 2014. However, Finish Line eventually stopped 

dealing with Division Six and began dealing with other parties instead. In January 2015, Division Six wrote to Finish Line

asserting its exclusive right under the Agreement to purchase 

Finish Line’s surplus products. Finish Line asserted in response that the Agreement was no longer in effect, having terminated in December 2013 following the end of the 2008 

Amendment’s five-year extension.

Division Six filed suit in October 2017. Finish Line moved

to dismiss for failure to state a claim, arguing the Agreement 

terminated at the end of 2013. In its complaint and in opposition to the motion to dismiss, however, Division Six claimed

the Agreement had in fact automatically renewed for another 

three years at the end of 2013. Division Six argued the Agreement and its amendments created a perpetual self-renewal

process triggered by the end of each extended term so long as 

Finish Line did not receive a third-party offer.

The district court granted Finish Line’s motion to dismiss. 

The court noted the terms set forth in the original Agreement 

and the 2002 Amendment were expressly tied to specific dates 

and ran for specific lengths of time. According to the court, 

the automatic extension provisions of each applied specifically to those defined terms and only provided for a single

extension following each term. Thus, the Agreement did not 
No. 19-1070 5

provide for perpetual self-renewal. Furthermore, since the 

2008 Amendment did not provide for any automatic extension, the court held the Agreement expired in 2013.

The court also rejected Division Six’s alternative argument 

that the contract was ambiguous about automatic renewal.

Since the plain language was not ambiguous, the court refused to consider Division Six’s extrinsic evidence of the parties’ intent—namely, Finish Line’s continued shipments to Division Six in 2014 after the Agreement had allegedly expired.

In October 2018, Division Six moved for reconsideration

pursuant to Fed. R. Civ. P. 59(e). It argued the district court 

committed an error of law by not “extending its reasoning” to 

conclude that even if the Agreement did not provide for perpetual self-renewal, the 2002 Amendment provided for one 

final automatic renewal following the end of the 2008 extended term. Therefore, the Agreement renewed a final time

in 2014. The district court rejected this argument and held its

decision not to adopt Division Six’s interpretation was not 

“manifestly wrong.” See Cincinatti Life Ins. Co. v. Beyrer, 722 

F.3d 939, 954 (7th Cir. 2013) (requiring a movant under Rule 

59(e) to demonstrate “a manifest error of law or fact” committed by the court). The court denied the motion for reconsideration. Division Six appeals the dismissal of its case.

II. Discussion

Our review of the district court’s dismissal for failure to 

state a claim is de novo, drawing all reasonable inferences in 

favor of Division Six as the non-moving party and accepting 

its factual allegations as true. O’Boyle v. Real Time Resolutions, 

Inc., 910 F.3d 338, 342 (7th Cir. 2018).
6 No. 19-1070

The parties agree the contract is governed by Indiana law, 

so we need not examine the choice-of-law question further. 

See Wood v. Mid-Valley Inc., 942 F.2d 425, 427 (7th Cir. 1991). 

The goal of contract interpretation under Indiana law is to determine the parties’ intent. Tender Loving Care Mgmt., Inc. v. 

Sherls, 14 N.E.3d 67, 72 (Ind. Ct. App. 2014). To do so, “an unambiguous contract should be given its plain and ordinary 

meaning ... and ... no extrinsic evidence is admissible to explain the terms of such an agreement.” Louis & Karen Metro 

Family, LLC v. Lawrenceburg Conservancy Dist., 616 F.3d 618, 

622 (7th Cir. 2010). If the contract is ambiguous, however, extrinsic evidence may be presented to determine the parties’

intent. Id.

On appeal, Division Six has chosen not to reassert the perpetual-renewal theory. Instead, it relies on the theory it argued in its motion to reconsider: Division Six was entitled to 

one more automatic three-year extension at the end of December 2013. As the district court noted, an issue raised for the 

first time in a Rule 59(e) motion that could have been raised 

earlier is generally not preserved for review. However, “such 

an issue is subject to appellate review if the district court exercises its discretion to consider the issue on the merits.” Gerhartz v. Richert, 779 F.3d 682, 686 (7th Cir. 2015) (quoting Dyson v. District of Columbia, 710 F.3d 415, 419 (D.C. Cir. 2013)). 

Finish Line has conceded the argument is preserved for our 

review.

Alternatively, Division Six argues the Agreement is ambiguous about whether one more extension occurred in December 2013. It asserts the district court should have considered extrinsic evidence of the parties’ intent.
No. 19-1070 7

Regarding the ambiguity argument, Division Six points to 

the phrase “adding language” used in both the 2002 and 2008 

Amendments. It asserts this phrase is ambiguous because the 

district court and Finish Line interpreted it differently than

Division Six. However, “[a] contract is not ambiguous merely 

because the parties disagree as to its proper construction; rather, a contract will be found to be ambiguous only if reasonable persons would differ as to the meaning of its terms.” Vincennes Univ. ex rel. Bd. of Trs. v. Sparks, 988 N.E.2d 1160, 1165 

(Ind. Ct. App. 2013). Our question, then, is whether the Agreement and its amendments are susceptible to multiple reasonable interpretations.

The interpretation that Division Six proposes is not a reasonable one. Division Six argues that, because the amendments each purported to “add” language to the Agreement 

while leaving all other terms in full force and effect, the modified Agreement could reasonably be understood to strike out 

and replace incongruous language related to term lengths and 

automatic extensions. This, it asserts, would allow for a final 

automatic extension after December 2013.

To illustrate its position, Division Six provided us with 

two separate modified versions of Paragraph 9 (included with 

this opinion as appendices). The first supplements the original Paragraph 9 by deleting the specific language defining the 

original term length, dates, and the automatic extension 

length. It then replaces them with the 2002 Amendment’s extended term length as well as the automatic extension length

(three years). This modified version also adds the word “extended” before every subsequent mention of the word “term”

in Paragraph 9. The apparent intent is that each provision of

the paragraph may be understood to relate to the new 
8 No. 19-1070

extension rather than the original term. For example, the 

phrase “If within six (6) months prior to the end of the term” 

in the original Agreement is changed to “If within six (6) 

months prior to the end of the extended term” in the modified 

version. Notably, Division Six’s modified Paragraph 9 does 

not include the 2002 Amendment’s language tying the threeyear automatic extension to “the end of said extended term”

(emphasis added). See App’x B.

The second modified version begins with the first modified version but now deletes the term length and ending date 

that had been added by the 2002 Amendment and replaces 

them with the five-year extension set forth in the 2008 

Amendment. Because the 2008 Amendment made no mention 

of another automatic extension, the language providing for a 

three-year extension is left intact. The result is that the threeyear extension now applies to “the end of the extended term,”

which, in this second modified version, would be the fiveyear extension ending in December 2013. See App’x C.

Thus, Division Six argues the final result of the Agreement 

as modified by both amendments required one final automatic renewal after December 2013.

The problem with this interpretation is that nothing in the 

amendments evidences an intent to strike out the language 

relating to the previous terms’ lengths or the dates to which 

the terms were anchored. The amendments only state an intent to “add” language, which ordinarily does not mean to 

delete. See generally Add, Webster’s Third New International 

Dictionary Unabridged (1981). Absent a clear indication to the 

contrary, we must construe the words in a contract according 

to their ordinary meaning. THQ Venture v. SW, Inc., 444 

N.E.2d 335, 338–39 (Ind. Ct. App. 1983). 
No. 19-1070 9

Nor do the amendments say anything about adding the 

word “extended” to change the meaning of Paragraph 9 the 

way Division Six has proposed. See Evan v. Poe & Assocs., Inc., 

873 N.E.2d 92, 98 (Ind. Ct. App. 2007) (holding a court may 

not “add provisions [to a contract] not agreed upon by the 

parties”). The 2002 Amendment expressly defined the extended term it created and anchored it to the beginning date 

of September 2002. It then created an automatic extension

provision that applied to a specific term, i.e. “said extended 

term,” not any extended term. Division Six’s proposed interpretation ignores this.

Indeed, in another portion of the original Paragraph 9,

where the Agreement contemplates the parties agreeing in 

writing to an extension, the Agreement specifically stated this 

could occur “prior to the expiration of the term or any extension thereof.” The parties could have used this same language 

if they intended the automatic renewal provision to apply to 

any extension of the original term, but they did not. 

Furthermore, the three-year automatic extension in the 

2002 Amendment already occurred at the end of the 2002 

Amendment’s first three-year extended term in 2005, resulting in an extension to 2008. Division Six’s argument requires 

the court to read into the parties’ agreement the idea that the 

automatic extension provision was revived and reapplied after the 2008 Amendment’s five-year extension. This is not a 

reasonable interpretation of the parties’ Agreement.

The only reasonable interpretation is that each automatic 

renewal provision applied to the specific term or extension to 

which it was expressly attached. Thus, the original Agreement, the 2002 Amendment, and the 2008 Amendment together created the following sequence of events:
10 No. 19-1070

(1) An 18-month term lasting from March 2001 until September 2002, which could, but ultimately did not, automatically renew for one additional 18-month extension;

(2) A three-year extension lasting from September 2002 

until August 2005, which could, and did, automatically 

renew for one additional three-year extension until 

August 2008; and finally

(3) A five-year extension lasting from September 2008 until December 2013, without any further provision for 

automatic renewal.

Because the Agreement is clear and unambiguous, Divisions Six’s extrinsic evidence (that Finish Line continued to 

perform in 2014) is irrelevant and cannot be considered. Tender Loving Care, 14 N.E.2d at 72. There was no automatic extension provided for following the 2008 Amendment extension. Thus, the Agreement was no longer in force after December 2013 and Finish Line did not commit a breach when it 

began dealing with third parties in 2014.

III. Conclusion

The Agreement and its amendments are not ambiguous,

and the plain language did not provide for any extension after 

the end of 2013. The district court, in its thorough and wellreasoned opinion, properly dismissed the action for failure to 

state a claim. Accordingly, we AFFIRM the decision of the district court.
No. 19-1070 11

APPENDIX A

Original Paragraph 9 of the Agreement:

TERM OF AGREEMENT

The term of this Agreement shall be eighteen months (18) 

commencing on March 1, 2001 (the Effective Date). The term 

may be extended by the written agreement of the parties prior 

to the expiration of the term or any extension thereof. If within

(6) months prior to the end of the term, Finish Line shall receive a bona fide, arm’s length written offer from any third 

party to purchase the same or similar Finish Line Products 

that Division Six Sports is purchasing under the terms of this 

Agreement, then Division Six Sports shall have a right of first 

refusal for an additional eighteen (18) month period to extend 

this Agreement with Finish Line upon materially identical 

consideration and terms set forth in such third party’s written 

offer .... If Finish Line does not receive a bona fide, arm’s 

length written offer at any time within six months of the end 

of the term, then this Agreement will automatically renew for 

an additional eighteen (18) month term.
12 No. 19-1070

APPENDIX B

2002 Amendment Relevant Part:

Finish Line would be amenable to adding language to Paragraph 9 of the Purchase Agreement to reflect a three year (3) 

extension of the agreement (ie. Through August 31, 2005). In 

addition, should Finish Line not receive a bona fid, arm’s 

length written offer from any third party at any time within 

six months of the end of said extended term, then the Agreement will automatically renew for an additional three (3) year 

extension.

Division Six’s First Modified Version of Paragraph 9:

TERM OF AGREEMENT

The term of this Agreement shall be eighteen months (18) 

commencing on March 1, 2001 (the Effective Date) extended 

by three (3) years (i.e., through August 31, 2005). The term 

may be extended by the written agreement of the parties prior 

to the expiration of the term or any extension thereof. If within 

(6) months prior to the end of the extended term, Finish Line 

shall receive a bona fide, arm’s length written offer from any 

third party to purchase the same or similar Finish Line Products that Division Six Sports is purchasing under the terms of 

this Agreement, then Division Six Sports shall have a right of 

first refusal for an additional eighteen (18) month three-year

period to extend this Agreement with Finish Line upon materially identical consideration and terms set forth in such third 

party’s written offer .... If Finish Line does not receive a bona 

fide, arm’s length written offer at any time within six months 

of the end of the extended term, then this Agreement will automatically renew for an additional eighteen (18) month term

three (3) year extension.
No. 19-1070 13

APPENDIX C

2008 Amendment Relevant Part:

Finish Line would be amenable to adding language to Paragraph 9 of the Purchase Agreement to reflect a new five (5) 

year term extension, commencing September 1, 2008 and ending December 31, 2013, (“Third Amendment Extended Term”) 

unless sooner terminated pursuant to any provisions of the 

Governing Agreements.

Division Six’s Second Modified Version of Paragraph 9:

TERM OF AGREEMENT

The term of this Agreement shall be extended by three (3) five 

(5) years (i.e., through August 31, 2005) commencing September 1, 2008 and ending December 31, 2013, (“Third Amendment Extended Term”) unless sooner terminated pursuant 

to any provisions of the Governing Agreements. The term 

may be extended by the written agreement of the parties prior 

to the expiration of the term or any extension thereof. If within 

(6) months prior to the end of the extended term, Finish Line 

shall receive a bona fide, arm’s length written offer from any 

third party to purchase the same or similar Finish Line Products that Division Six Sports is purchasing under the terms of 

this Agreement, then Division Six Sports shall have a right of 

first refusal for an additional three-year period to extend this 

Agreement with Finish Line upon materially identical consideration and terms set forth in such third party’s written offer 

.... If Finish Line does not receive a bona fide, arm’s length 

written offer at any time within six months of the end of the 

extended term, then this Agreement will automatically renew 

for an additional three (3) year extension.