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Wathne Imports, Ltd. v. PRL USA, Inc.

Supreme Court, New York County

March 27, 2013

WATHNE IMPORTS, LTD., Plaintiff,
v.
PRL USA, INC., THE POLO/LAUREN COMPANY, L.P., POLO RALPH LAUREN CORPORATION, and RALPH LAUREN, Defendants. Index No. 603250/05

Unpublished Opinion

DECISION AND ORDER

Charles E. Ramos, J.S.C.

In this commercial action, plaintiff Wathne Imports, Ltd. (Wathne) moves for permission to present damages testimony at trial through its owner and chief executive Berge Wathne.

Wathne is a family business that has been a licensee of defendants PRL USA, Inc., the Polo/Lauren Company, L.P., Polo Ralph Lauren Corporation (Polo) since 1984. On November 23, 1999, Wathne entered into an amended licensing agreement with Polo (the Agreement), pursuant to which Wathne had the exclusive license through December 31, 2007 to manufacture and sell men's, women's and children's luggage and handbags bearing the trademarks "Polo By Ralph Lauren, " "Ralph (Polo Player Design) Lauren, " "Ralph Lauren, " "Polo Sport, " "Lauren/Ralph Lauren, " and "Polo Jeans Co, " in the United States and Canada.

Pursuant to the Agreement, if Polo discontinued one of those trademarks, Polo was obliged to provide Wathne with a replacement trademarks, Polo was obliged to provide Wathne with a replacement mark of "substantially equivalent market value." Wathne alleges that Polo discontinued the use of the "Polo Sport" and "Ralph Lauren" trademark and Wathne suffered damages, including lost profits.

After conducted extensive discovery in this action, plaintiff filed the note of issue on April 21, 2011.

Shortly after plaintiff's current counsel entered the action, they purportedly discovered that prior counsel had not selected a witness to testify about plaintiff's damages for its claim for breach of contract related to the Ralph Lauren trademark.

Earlier in the litigation, plaintiff's damages expert, Glenn Newman, submitted a report, dated May 17, 2010, opining as to damages flowing from the discontinuance of the Polo Sport, Collection and Children's Backpack products. According to Newman's supplemental report, his original report addressed damages involving the use of the Ralph Lauren trademark, but in his subsequent deposition preparation, he discovered that the "price points and distributions [sic] channels of products sold under the Ralph Lauren trademark changed after 2000, " and that "after 2000, the Ralph Lauren trademark was segmented into various labels including Collection and Blue Label ... ." As a result, with the submission of his supplemental report, Newman withdrew his damages calculation for the Ralph Lauren-Collection line.

Wathne's prior counsel then planned to replace Newman's testimony concerning the Ralph Lauren/Collection line with the testimony of Laura Gunther (Gunther), Wathne's former president. In a January 23, 2012 decision, this Court barred Gunther from testifying as to these damages, because she was unprepared to testify about Wathne's Collection line damages at her deposition in 2007. Wathne's counsel argued that, at the time of Gunther's deposition, she had not done the work "necessary to quantify the damages" on the Collection mark. Upon discovering that Wathne's counsel did not supplement its disclosure with the information about which Gunther would testify at trial, the Court ruled that she was not permitted to testify as to these damages as trial.

As set forth in this Court's January 23, 2012 transcript of proceedings, this Court stated:

"MR. SUMMIT: She [Gunther] can testify - the cases are almost unanimous that an officer of a company is in a position to talk about how a company was injured.
"THE COURT: I agree, but if she testifies at a deposition that she can't do it and you don't supplement the deposition, she is precluded" (Aff of Steiner, Exhibit I at 11).
"THE COURT: Have you submitted something to the defendants that would now fill in the void in the deposition testimony so we know how she is going to testify?
"MR. CALLAGY: Nothing, your Honor.
"MR. SUMMIT: No.
"THE COURT: Then how can I permit her to testify? We don't try cases by surprise ...

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