in the united states bankruptcy court...

{00209079.DOCX / 2}

George Hoffman (10005)Benjamin J. Kotter (9592)Adam H. Reiser (13339)COHNE KINGHORN, P.C.111 East Broadway, 11th FloorSalt Lake City, Utah 84111Telephone: (801) 363-4300Facsimile: (801) 363-4378Email: [email protected]

[email protected]@cohnekinghorn.com

Attorneys for the Debtor-in-Possession DGS Store Fixtures, Inc.

IN THE UNITED STATES BANKRUPTCY COURTDISTRICT OF UTAH, CENTRAL DIVISION

In re:

DGS STORE FIXTURES, INC.,

Debtor.

Bankruptcy Case No. 14-31080

Chapter 11

Honorable Joel T. Marker

Adv. Pro. No. _______________

DGS STORE FIXTURES, INC.,

Plaintiff,

v.

LULULEMON USA, INC.,

Defendant.

COMPLAINT

Case 15-02065 Doc 1 Filed 04/07/15 Entered 04/07/15 11:42:31 Desc Main Document of 13

{00209079.DOCX / 2}

Plaintiff DGS Store Fixtures, Inc., debtor and debtor-in-possession (“DGS” or

“Plaintiff”) in the above-captioned bankruptcy case, for causes of action against

defendant Lululemon USA, Inc. (“Lululemon” or “Defendant”), files this Complaint (the

“Complaint”) and alleges as follows:

PARTIES, JURISDICTION AND VENUE

1. DGS filed a voluntary petition for relief under Chapter 11 of Title 11 of the

United States Code (the “Bankruptcy Code”) on October 20, 2014 (the “Petition Date”).

2. Lululemon is a Nevada corporation headquartered in Vancouver, British

Columbia with various retail locations located throughout the United States, including

several retail locations in Utah.

3. This Court has jurisdiction over this adversary proceeding pursuant to

28 U.S.C. §§157 and 1334.

4. This is a core proceeding under 28 U.S.C. §157(b).

5. Venue is proper before this Court pursuant to 28 U.S.C. §§1408 and 1409.

GENERAL ALLEGATIONS

6. DGS sells custom retail store fixtures to large material retail chains, drug

stores, supermarkets, department stores and various specialty retailers, including

Lululemon. Customers, like Lululemon, retain DGS to attain custom fixtures specific to

their individual needs and designs.

7. In 2014, Lululemon and DGS contracted for DGS to provide various

services and/or products in conjunction with the summer 2014 opening of Lululemon’s

Westfield San Francisco Centre store.


{00209079.DOCX / 2}

8. On or about April 22, 2014, DGS issued Invoice No. 976451 to Lululemon

for unpaid product and/or services in the amount of $2,817.50.

9. On or about May 28, 2014, DGS issued a credit memorandum (Invoice

No. 98107) to Lululemon in the amount of $560.00.

10. On or about June 10, 2014, DGS issued Invoice No. 98306 to Lululemon


11. On or about June 12, 2014, DGS issued Invoice No. 98337 to Lululemon


12. In January 2015 DGS received a partial payment of $18,620.50 on the

outstanding Invoices leaving an outstanding principal balance of $77,560.50 as detailed

below:

Invoice No. 97645 $2,817.50Invoice No. 98107 ($560.00)Invoice No. 98306 $4,800.00Invoice No. 98337 $70,645.50Partial Payment ($18,620.50)

Outstanding Balance $59,082.50

13. On February 4, 2015, DGS made formal written demand on Lululemon for

payment of the outstanding principal balance. Despite such demand, Lululemon has

failed, refuses and continues to refuse to pay DGS the amounts due and owing DGS for

the services and/or products DGS has provided to Lululemon.

1This invoice and all the other invoices referred to in this Complaint are referred to collectively as the “Invoices”

and are attached hereto as Exhibit A.


{00209079.DOCX / 2}

FIRST CLAIM FOR RELIEF(Breach of Contract)

14. DGS repeats, realleges and incorporates by reference each of the

preceding allegations of the Complaint.

15. DGS and Lululemon entered into one or more contracts for the sale and

purchase of certain products and/or services form DGS to Lululemon as described

above (collectively, the “Contracts”).

16. Lululemon breached the Contracts by failing to pay for the products and/or

services that DGS provided to Lululemon as described above.

17. DGS performed its obligations under the Contracts by delivering the

products and/or services set forth in the Invoices as requested by Lululemon.

18. DGS is entitled to recover no less than $59,082.50from Lululemon which

is the unpaid principal balance due for the products and/or services provided by DGS to

Lululemon.

SECOND CLAIM FOR RELIEF(Breach of Implied Covenant of Good Faith and Fair Dealing)



20. The Contracts are enforceable contracts between DGS and Lululemon.

21. Inherent in the Contracts, as implied by Utah law, is a duty to act in good

faith and to deal fairly with the other contracting party or parties.


{00209079.DOCX / 2}

22. As described above, Lululemon breached its duty to act in good faith and

deal fairly by, among other things, failing to timely pay DGS for the products and/or

services provided.

23. The wrongful conduct of Lululemon, as described above, is inconsistent

with the Contracts and DGS’s justified expectations when it entered into the Contracts.

24. Lululemon’s breach of the covenant of good faith and fair dealing actually

and proximally causes substantial loss and detriment to DGS’s bankruptcy estate.

25. As a result of Lululemon’s breach of the covenant of good faith and fair

dealing, DGS is entitled to recover damages in an amount to be established at trial, but

in no event less than $59,082.50.

THIRD CLAIM FOR RELIEF(Unjust Enrichment)



27. The products and/or services provided by DGS to Lululemon, as set forth

in the Invoices, were a benefit that DGS conferred upon Lululemon, which Lululemon

knowingly accepted and enjoyed.

28. Lululemon was and is aware of the benefit which was conferred upon it by

DGS and has retained the benefit under circumstances which make it inequitable or

unjust, unless DGS is reasonably compensated for its product and/or services.

29. Except for the partial payment, Lululemon has not provided any additional

consideration for the products and/or services provided by DGS to Lululemon as alleged


{00209079.DOCX / 2}

herein and has retained such products and/or services without any legal or equitable

claim to the products and/or services.

PRAYER FOR RELIEF

WHEREFORE, DGS respectfully requests this Court to enter judgment in its

favor and against Lululemon as follows:

A. Pursuant to DGS’s First Claim for Relief alleging breach of contract, for

judgment against Lululemon in the amount of no less than $59,082.50, plus pre- and

post-judgment interest from and after the date of the applicable invoice, in an amount to

be determined at trial;

B. Pursuant to DGS’s Second Claim for Relief alleging breach of the implied

covenant of good faith and fair dealing, for judgment against Lululemon in the amount of

no less than $59,082.50, plus pre- and post-judgment interest from and after the date of

the applicable invoice, in an amount to be determined at trial;

C. Pursuant to DGS’s Third Claim for Relief alleging unjust enrichment, for

judgment against Lululemon in the amount of no less than $59,082.50, plus pre- and

post-judgment interest from and after the date of the applicable invoice, in an amount to

be determined at trial;

D. For DGS’s costs and reasonable attorneys’ fees incurred in this matter,

including augmentation thereof for reasonable post-judgment costs and attorneys’ fees

incurred in collecting and enforcing any judgment entered herein; and


{00209079.DOCX / 2}

E. For such other and further relief as the Court deem just and proper.

Dated this 7th day of April, 2015.

COHNE KINGHORN, P.C.

/s/ Benjamin J. KotterGeorge HofmannBenjamin J. KotterAdam H. Reiser

Attorneys for DGS Store Fixtures, Inc.


in the united states bankruptcy court...

Documents