Breach of Contract

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7^th Circuit Court of Appeals

Case Name: Karum Holdings LLC, et al. v. Lowe’s Companies, Incorporated, et al.

Case No.: 18-1007; 18-1074

Officials: BAUER, BARRETT, and ST. EVE, Circuit Judges.

Focus: Breach of Contract

When Lowe’s Companies, Inc. (Lowe’s Inc.) expanded its retail home improvement stores into Mexico, Lowe’s Companies Mexico, S. de R.L. de C.V. (Lowe’s Mexico) contracted with Karum Holdings LLC and a few of its subsidiaries, Karum Group LLC, and Karum Card Services S.A. de C.V., SOFOM, E.N.R. (collectively, Karum), to provide private label credit card services there. The program failed to meet expectations, and Karum brought this lawsuit against both Lowe’s Inc. and Lowe’s Mexico (collectively, Lowe’s) claiming breach of contract.

The focus of this appeal is Karum’s proof of damages and expert disclosures, or lack thereof. Early on, Karum disclosed its summary “damages model,” a 37-page estimate of damages with hundreds of figures contained in charts and graphs. Karum intended to have its Chairman and former CEO Peter Johnson and/or its current CEO and CFO Russell Ouchida present the damages model at trial as lay opinion testimony; Karum never retained a damages expert. Two months before trial, Lowe’s filed a motion in limine to preclude Johnson and Ouchida from testifying as to the damages model because any testimony regarding the model required the specialized knowledge of an expert. The district court granted the motion, finding that Karum had never properly disclosed an expert pursuant to Federal Rule of Civil Procedure 26(a)(2). Since this was a case-dispositive sanction, the court granted judgment in favor of Lowe’s and Karum appealed. We affirm.

Affirmed

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.