Opinion ID: 4294194
Heading Depth: 2
Heading Rank: 1

Heading: The Agreements Between Lowe’s and Karum

Text: Lowe’s Inc. is the second largest home improvement store in the United States, and in 2010, it expanded its North American presence into Mexico by opening two stores. Prior to opening those stores, Lowe’s Mexico entered into the “Private Nos. 18-1007 & 18-1074 3 Label Credit Card Program Agreement” (“Program Agreement”) with Karum. The term of the agreement was seven years, and it could only be terminated if certain conditions were met, or by mutual consent. The parties initially agreed to jointly fund the credit portfolio 50/50, but changed course in 2014 resulting in the “Profit Sharing and Funding Agreement” (the “Funding Agreement”), whereby Lowe’s Mexico agreed to fund 99%. Karum Card Services was an entity created as a joint venture by Lowe’s Mexico and Karum Group to manage and operate the program, i.e., issue credit cards to customers in Mexico. In turn, Karum Card Services also had a separate “Masters Credit Services Agreement” (the “Services Agreement”) with Karum Latin America S. de L.A. de C.V. (Karum LA), a subsidiary of Karum Group, to further carry out the program in Mexico. The arrangement failed to meet Lowe’s expectations, and Lowe’s sought to terminate its relationship with Karum in 2014. After mediation proved unsuccessful, Karum and Karum LA filed this lawsuit on January 14, 2015. Karum alleged that a contractual relationship between Lowe’s and Karum was reflected in all three agreements described above, and that Lowe’s had unilaterally terminated the agreements. Lowe’s filed a motion to dismiss all claims relating to the Services Agreement since Lowe’s was not a party to that particular agreement, and dismiss Karum LA, because it was not a party to any agreement to which Lowe’s was a party. The district court granted Lowe’s motion without prejudice, and Karum’s amended complaint removed Karum LA as a party and any claims for breach of contract of the Services Agreement. 4 Nos. 18-1007 & 18-1074 B. Karum’s Witness Disclosures, Damages Model, and