Case 4:21-cv-00091-JMS-DML Document 55 Filed 06/30/22 Page 1 of 18 PageID #: 247

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF INDIANA
NEW ALBANY DIVISION

SEARS AUTHORIZED HOMETOWN )

STORES, LLC )
)
Plaintiff )
)
vs. ) CASE NO. 4:21-cv-00091-JMS-DML
)
LYNN RETAIL, INC., )
JERRY SCHNEIDER, )
and )
LAURA SCHNEIDER )
)
Defendants )

MEMORANDUM OF LAW IN SUPPORT OF

MOTION FOR SUMMARY JUDGMENT

Defendants Lynn Retail, Inc., Jerry Schneider, and Laura Schneider (collectively,

“Schneider’s Hometown”), by counsel, hereby respectfully submit the following Memorandum of

Law in Support of Summary Judgment.

INTRODUCTION

This Court should grant summary judgment to Schneider’s Hometown because there are

no genuine issues of material fact and Schneider’s is entitled to judgment as a matter of law.

Specifically, Sears Authorized Hometown Stores (“Sears”) cannot satisfy its burden of showing a

likelihood of confusion between Sears and any name or mark used by Schneider’s Hometown.

Likewise, Sears cannot satisfy the elements of its tortious interference claims and, thus, those

allegations should be dismissed as well.

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STATEMENT OF FACTS

1. The Sears Business Model

Sears is a national retailer of home appliances. (Complaint, Ex. A, at 3). It is licensed to

use two registered trademarks: “Sears Hometown Store” and “Sears Authorized Hometown Store.”

(Complaint, Ex. A, at 3-4). Sears owns the merchandise, and Sears dealers offers it for sale to the

public on consignment using Sears marks and branding, as well as Sears’ operation manual,

confidential information, vendor information, and marketing materials. (Complaint, Ex. A, at 3).

Proceeds of sales are paid to Sears, and Sears in turn pays a commission to the dealer. (Dealer

Agreement, Ex. C, at 12 (¶ 13)). The dealer is responsible for all expenses related to the premises.

(Dealer Agreement, Ex C, at 14 (¶ 14.8)).

As part of the agreement, the dealer promises to cease use of Sears’ intellectual property

upon termination. (Dealer Agreement, Ex. C, at 8 (¶ 9.2)). Additionally, the dealer agrees that, for

a period of two years after termination, neither the dealer, nor his or her affiliates or immediate

family, will have an ownership interest in any competing business located within 50 miles of any

Sears Authorized Hometown Stores. (Dealer Agreement, Ex. C, at 16 (¶ 15.8)).

2. The Dealer Agreement Between Sears and Scott Schneider

In June 2016, Sears and Scott Schneider1 renewed a Dealer Agreement for a Sears store

located at 1480 Old Highway 135 NE, Corydon, Indiana. (Dealer Agreement, Ex. C).

Approximately three years later, in 2019, Scott became concerned about the level and content of

the inventory provided by Sears at the Corydon store. (Scott Dep., Ex. D, at 99:12-20). 2

1
Scott Schneider is Jerry Schneider’s son and Laura Schneider’s husband. (Jerry Affidavit,
Ex. B, at 1). Although not a party to this suit, Scott Schneider is a respondent in an ongoing
arbitration proceeding. (See Arbitration Order, Ex. F).
2
Citations to Depositions are in the following format: (“Name” Dep., Ex. “Letter”: “page
number”:“line number(s)”).
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Specifically, because of Sears’ consistent failure to provide adequate inventory, Scott feared he

could no longer pay rent for the store and might lose his home. (Scott Dep., Ex. D, at 117:2-24).

Sears interpreted Scott’s inquiry as an intent to abandon the Dealer Agreement. (See Complaint,

Ex. A, at 6). The parties’ relationship unraveled and, by January 20, 2020, Scott closed the store.

(Complaint, Ex. A, at 6).

On January 21, 2020, Sears informed Scott that it considered Scott to have unilaterally

terminated the Dealer Agreement. (Complaint, Ex. A, at 6). Sears demanded that he discontinue

use of the name “Sears” and all trade names and trademarks associated with the store. (Complaint,

Ex. A, at 6). Sears made clear it expected Scott’s “full cooperation” in allowing Sears access to

the store to “maintain the flow of Store operations” as provided in the Dealer Agreement.

(Complaint, Ex. A, at 6).

Sears intended to take possession of the Corydon store and reopen with a new dealer.

(Complaint, Ex. A, at 7). Alden Shipley is the landlord and property owner of the premises located

at 1480 Old Highway 135 NE. (Shipley Declaration, Ex. E, at 1). Shipley has never had an

agreement or contractual relationship with Sears. (Shipley Declaration, Ex. E, at 1). After the

termination of the Dealer Agreement, Sears sought to lease the premises from Shipley, but Shipley

declined to do so. (Shipley Declaration, Ex. E, at 1). The decision was based upon a variety of

reasons, including Sears’ mistreatment of Scott Schneider, as well as Shipley’s lack of confidence

in Sears’ ability to continue supplying merchandise to store owners (and the corresponding risk

that Sears would not be able to pay its monthly rent). (Shipley Declaration, Ex. E, at 1). The

decision not to lease the premises to Sears was unrelated to Lynn Retail, Jerry Schneider, or Laura

Schneider. (Shipley Declaration, Ex. E, at 2).

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3. Schneider’s Hometown Store

Jerry Schneider is Scott Schneider’s father. (Jerry Affidavit, Ex. B, at 1). Jerry has sold

appliances out of his home for decades and previously worked at GE Appliances. (Jerry Affidavit,

Ex. B, at 1). In March 2020, Jerry opened Schneider’s Hometown at the same location where the

Sears store was located previously. (Jerry Affidavit, Ex. B, at 1). Schneider’s Hometown sells

appliances, furniture, and mattresses, and is owned by Lynn Retail, Inc., a company formed by

Jerry Schneider. (Jerry Affidavit, Ex. B, at 1). Laura Schneider, Scott’s wife, was employed at the

Schneider’s Hometown store for a time. (Jerry Affidavit, Ex. B, at 1). Neither Laura nor Scott

Schneider have an ownership interest in Schneider’s Hometown. (Jerry Affidavit, Ex. B, at 2).

Scott Schneider had no knowledge of Jerry’s decision to open Schneider’s Hometown or

information about his wife’s role in the new operation.3 (Scott Dep., Ex. D, at 44:7-21). Likewise,

Scott Schneider did not discuss his request to mutually terminate the Dealer Agreement with Jerry

Schneider at any point prior to the termination. (Scott Dep., Ex. D, at 117: 9-18;). After he

requested the mutual termination, Scott told Jerry that he was struggling, he did not have enough

income to maintain the store, and he was not going to lose his kids’ house trying to keep the store

afloat. (Scott Dep., Ex. D, at 117:19-24; Jerry Affidavit, Ex. B, at 2). Scott also told Laura about

the request for a mutual termination agreement, but again, only after-the-fact. (Scott Dep., Ex. D,

at 118:6-22; Laura Affidavit, Ex. G, at 1). Neither Jerry nor Laura Schneider had ever seen or read

the Dealer Agreement prior to this suit. (Jerry Affidavit, Ex. B, at 2; Laura Affidavit, Ex. G, at 1).

4. Sears’ Complaint

In June 2021, Sear filed this lawsuit. (Complaint, Ex. A). Sears raises three claims: (1)

unfair competition under Section 43(a) of the Lanham Act, (2) interference with a contractual

3
Laura and Scott Schneider are separated. (Scott Dep., Ex. D, at 46:13-17).
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relationship (i.e., the Dealer Agreement between Sears and Scott Schneider), and (3) tortious

interference with prospective economic advantage (i.e., Sears’ “right” to lease the premises located

at 1480 Old Highway 135 NE). (Complaint, Ex. A, at 11-13).

In support of its Lanham Act claim, Sears alleges:

 Schneider’s Hometown uses a confusingly similar sign:

(Complaint, Ex. A, at 9-10);

 Schneider’s Hometown uses the same trade dress and fixtures—specifically, the

same colors and vinyl plank wood flooring (Complaint, Ex. A, at 10);

 Schneider’s describes defendant as “experts” who have been in the appliance,

furniture, and mattress business for years (Complaint, Ex. A, at 10);

 Schneider’s sells the same types of products and many of the same brands as sold

by Sears (Complaint, Ex. A, at 10); and

 Schneider’s has the same phone number once used by Scott Schneider during his

operations of the Sears store (Complaint, Ex. A, at 10).

As to Count II, Sears alleges that Schneider’s Hometown interfered with its right to take

over and operate the Corydon store by intentionally inducing Scott Schneider into abandoning the

Sears store in breach of the Dealer Agreement. (Complaint, Ex. A, at 12). Similarly, with regard

to Count III, Sears claims Schneider’s Hometown convinced the landlord, Alden Shipley, not to

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rent to Sears, and that Schneider’s did so with actual knowledge of the Dealership Agreement’s

terms and conditions and its claimed “right” to lease the premises. (Complaint, Ex. A, at 12).

STANDARD OF REVIEW

Summary judgment is appropriate where there are no genuine disputes of material fact and

the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); Celotex Corp. v.

Catrett, 477 U.S. 317, 322-23 (1986). A court must grant a motion for summary judgment if it

appears that no reasonable trier of fact could find in favor of the non-movant on the basis of the

designated admissible evidence. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). A

trial court neither weighs the evidence, nor evaluate the credibility of witnesses, id. at 255, but

views the facts and the reasonable inferences flowing from them in the light most favorable to the

non-movant. McConnell v. McKillip, 573 F. Supp. 2d 1090, 1097 (S.D. Ind. 2008).

Where the movants seek judgment on a claim on which the non-movant bears the burden

of proof, as Defendants do here, the movants are entitled to judgment as a matter of law if they

can point to a failure of proof in the record such that no reasonable jury could find in the non-

movant's favor on one or more elements of his claims. Celotex Corp., 477 U.S. at 322-23.

ARGUMENT

For the following reasons, Sears’ claims fail as a matter of law and Schneider’s Hometown

is entitled to summary judgment.

1. Count I – Unfair Competition

The Lanham Act was intended to make “actionable the deceptive and misleading use of

marks” and “to protect persons engaged in ... commerce against unfair competition.” Section 45,

15 U.S.C. § 1127. Courts have devised a two-pronged test for determining when conduct

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constitutes infringement of an unregistered mark4 under Section 43(a): claimants must prove (1)

the validity of their trademarks, and (2) a likelihood of confusion. See Dunn v. Gull, 990 F.2d 348,

351 (7th Cir. 1993); Mayflower Transit, Inc. v. Ann Arbor Warehouse, Inc., 892 F. Supp. 1134,

1142 (S.D. Ind. 1995).

Thus, to succeed on its Lanham Act claim, Sears must first demonstrate the validity of the

trademark(s) at issue—specifically, the word “hometown”; the phone number; and Sears’ trade

dress. See Platinum Home Mortg. Corp. v. Platinum Fin. Group, Inc., 149 F.3d 722, 726 (7th Cir.

1998) (citing Echo Travel, Inc. v. Travel Assocs., Inc., 870 F.2d 1264, 1266 (7th Cir. 1989)).

Validity pertains to whether a “word, term, name, symbol or device” is entitled to protection. Id.

The inquiry focuses on whether a mark specifically identifies and distinguishes one company's

goods or services from those of its competitors. Id. “The infringement of a mark concerns whether

the actions of a subsequent user of a substantially similar or identical mark causes a likelihood of

confusion among consumers as to the source of those specific goods or services.” Id. When the

identifying “word, term, name, symbol or device” claimed as a trade name or mark is not registered

with the United States Patent and Trademark Office, the burden is on the claimant to establish that

it is entitled to protection. Id.

Marks are classified into five categories of increasing distinctiveness: (1) generic, (2)

descriptive, (3) suggestive, (4) arbitrary, and (5) fanciful. See Mil–Mar Shoe Co., Inc. v. Shonac

Corp., 75 F.3d 1153, 1156 (7th Cir. 1996). Generally speaking, the level of trademark protection

available accords with the distinctiveness of the mark. Id. As a result, generic terms receive no

4
Although it is undisputed Sears is the license holder of two registered trademarks (“Sears
Hometown Store” and “Sears Authorized Hometown Store), there is no allegation that Schneider’s
has used either mark. (See, generally, Complaint, Ex. A). Likewise, Sears’ Complaint raises a
claim under Section 43(a) of the Lanham Act, which deals exclusively with unregistered marks.
(Complaint, Ex A, at 10-11).
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trademark protection and descriptive marks are protected only if they have achieved “secondary

meaning” in the relevant community. Id. Suggestive, arbitrary, and fanciful marks are deemed

inherently distinctive, and thus entitled to full protection. Id.

A generic term is one that is commonly used to name or designate a kind of goods. Id.

“Unlike a trademark, which identifies the source of a product, a generic term merely specifies the

type, or genus, of thing into which common linguistic usage consigns that product.” Id. (citing

Gimix, Inc. v. JS & A Group, Inc., 699 F.2d 901, 905 (7th Cir. 1983)). On the other hand, a

descriptive mark is one that merely describes the ingredients, qualities, or characteristics of an

article of trade or service. Id. Such marks are generally not protectable as trademarks, “both

because they are poor means of distinguishing one source of services from another and because

they are often necessary to the description of all goods or services of a similar nature.” Id. (citing

Liquid Controls Corp. v. Liquid Control Corp., 802 F.2d 934, 936 (7th Cir.1986)). As such,

descriptive marks are only protectable where the holder can establish that the mark has acquired

“secondary meaning” in the collective consciousness of the relevant community. Id. Finally, if a

mark stands for an idea which requires some operation of the imagination to connect it with the

goods, it is suggestive. Id. If the mark imparts information directly, it is descriptive. See Platinum

Home Mortgage Corp., 149 F.3d at 727.

Here, Sears has the burden of proving that its unregistered trademarks are entitled to

protection under the Lanham Act. In that regard, Sears contends that Schneider’s has used a

confusingly similar sign, trade dress, and phone number. (Complaint, Ex. A, at 9-10). However,

an examination of the Sears sign and the Schneider’s Hometown sign reveals only two

similarities—i.e., the word “hometown” and the color scheme. The word “hometown” is either

generic or descriptive and, therefore, not entitled to protection. See, e.g., Eglen v. Am. Online, Inc.,

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No. TH 00-135-C-M/H, 2003 WL 21508343, at *9 (S.D. Ind. June 12, 2003). Moreover, although

Sears may have used “Sears Hometown” trade dress for advertising purposes, on the outside of the

Corydon store, the only sign was blue and white and did not use the word “hometown” at all:

(Jerry Affidavit, Ex. B, at 2).

Likewise, a generic phone number—i.e., not a vanity number such as 1-800-HOLIDAY—

is not entitled to Lanham Act protection because there is no risk that consumers will see the number and

associate the alleged infringer's goods or services with those of the mark holder. See, e.g.,

DaimlerChrysler AG v. Bloom, 315 F.3d 932, 939 (8th Cir. 2003) (concluding that the licensing

of a toll-free telephone number, without more, is not a “use” within the meaning of the Lanham

Act, even if one possible alphanumeric translation of the number might spell-out a protected mark).

Next, and with respect to Sears’ claim to its right to exclusive use of red, white, and blue

coloring for its trade dress, the controlling law as to the use of colors as a trademark is found in

the opinion in Life Savers Corporation v. The Curtiss Candy Company, 182 F.2d 4 (7th Cir. 1950).

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In that case, the plaintiff sued to stop the defendant from using a multicolored package to denote

its fruit flavored drops, which package closely resembled in coloration a package used by plaintiff

to sell its fruit flavored candies. Each of the packages contained a logo of the manufacturers. The

Court held:

The dominant feature of plaintiff's trademark is the words, ‘Life Savers', appearing
three times in bold white letters extending practically the length of its label. It would
indeed seem unlikely for any purchaser buying a package of ‘Life Savers' to avoid
knowledge of the origin of the package of Life Savers. The same is likewise true as
to any of defendant's packages of hard candy.

182 F.2d, at pp. 7-8. Thus, where colors are used in combination with a logo, it is the logo, not the

colors, which serves to identify the source of the goods. Here, Sears’ claim is foreclosed because

its logo—“Sears Hometown”—is the identifying mark, not the use of red, white, and blue.

Moreover, there is no genuine issue of material fact that any of the foregoing unregistered

marks have acquired secondary meaning. “A generic term is one that is commonly used and does

not identify any particular source....” Platinum Home Mortg., 149 F.3d at 727 (citing Liquid

Controls Corp., 802 F.2d at 936. “A descriptive mark is one that ‘describes the ingredients,

qualities, or characteristics of ... a service’....” Id. (quoting Liquid Controls, 802 F.2d at 936).

Generally, descriptive marks are a poor means for distinguishing a product or service from another.

See id. However, if such a mark “acquires secondary meaning ‘in the collective consciousness of

the relevant community’” it is afforded protection. Id. Suggestive, arbitrary, or fanciful marks are

automatically afforded protection because they are inherently distinctive. See id.

In this case, as noted in the Complaint, Sears Hometown stores are “typically found in

smaller communities…” (Complaint, Ex. A, at 1). Thus, it is descriptive of the services and

products sold by Sears. Nor can Sears show that its use of the word “hometown,” red, white, and

blue trade dress or phone number have acquired a secondary meaning. “Secondary meaning refers

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to the manner in which a consumer identifies a specific business or a business's reputation by a

particular trademark.” Platinum Home Mortgage, 149 F.3d at 728 (citing Vaughan Mfg. Co. v.

Brikam Int'l, Inc., 814 F.2d 346, 348 (7th Cir. 1987)). In other words, in the minds of consumers

the term “hometown,” red, white, and blue trade dress or phone number must have become

synonymous with Sears’ service only. As shown above, this is not the case for generic phone

numbers and color combinations such as red, white, and blue.

There are several factors that inform the inquiry into secondary meaning including: (1) the

amount and manner of advertising; (2) the amount of sales or number of customers; (3) the

exclusivity, length and manner of use; (4) an established place in the marketplace; (5) proof of

intentional copying; (6) direct consumer testimony; and (7) consumer surveys. See id.; Echo Travel

Inc., 870 F.2d at 1267. The latter two “factors” are considered “direct evidence” of secondary

meaning, while the others are considered “circumstantial evidence” of secondary meaning. Echo

Travel, 870 F.2d at 1267.

Sears cannot provide any direct evidence of secondary meaning. Specifically, Sears has no

direct consumer testimony that the term “hometown,” its trade dress, or a generic phone number,

have become synonymous with Sears’ appliance services and products. Nor does Sears have any

consumer surveys to show such a mental association. And, to the extent Sears relies upon its

advertising budget and long-standing existence in the appliance market, there is still no genuine

issue of material fact that the term “hometown,” the colors red, white, and blue, or a generic

telephone number have acquired secondary meaning because there is no evidence that a group of

consumers associated these marks with Sears’ services exclusively or that Sears's long-term use of

these marks created an association with Sears.

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In any event, even if the Court were to find that a genuine issue of fact exists as to whether

the foregoing constitute valid and protectable marks, Schneider’s Hometown would still be entitled

to summary judgment. That is so because, in order to prevail under Section 43(a), plaintiffs must

also carry the burden of proving likelihood of confusion. Here, the record contains no evidence of

confusion. Courts in the Seventh Circuit consider multiple factors to determine whether there is a

likelihood of confusion between two marks: (1) strength of the plaintiff's mark; (2) similarity of

the marks; (3) actual confusion; (4) deceptive intent; (5) similarity of the products; (6) area and

manner of concurrent use; and (7) degree of care likely to be exercised by consumers. See Smith

Fiberglass Prods., Inc. v. Ameron, Inc., 7 F.3d 1327, 1329 (7th Cir. 1993). “[N]one of the seven

factors alone are dispositive, and the weight accorded to each factor will vary from case to case.”

Id. at 1329. Nonetheless, “the most important factors include the similarity of the marks, the intent

of the claimed infringers and evidence of actual confusion.” G. Heileman Brewing Co. v.

Anheuser-Busch, Inc., 873 F.2d 985, 999 (7th Cir. 1989); see also Eli Lilly & Co. v. Natural

Answers, Inc., 233 F.3d 456, 462 (7th Cir. 2000).

As discussed above, the term “hometown,” the color combination of red, white, and blue,

and generic telephone numbers are the weakest type of marks, i.e., they are merely generic or

descriptive and, thus, there is little possibility of a likelihood of confusion. The less consumers

associate a term with a single source, the less likely they are to be confused when they see that

term on different products. See M-F-G Corp. v. EMRA Corp., 817 F.2d 410, 411 (7th Cir. 1987)

(finding no likelihood of confusion where “[t]he mark is ‘descriptive,’ meaning that it identifies

an attribute of the product; this suggests both that the mark does not extend beyond the product

and that its employment has not added new meaning to the word.”). And, in situations like this,

where a “prominent house mark” like “Sears” is used with a weak descriptive marks, like

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“hometown,” and generic red, white, and blue coloring, “any significant likelihood of confusion

[is dispelled.]” See G. Heileman Brewing Co. v. Anheuser-Busch, Inc., 873 F.2d 985, 999 (7th Cir.

1989); see also Philip Morris, Inc. v. R.J. Reynolds Tobacco Co., 188 U.S.P.Q. 289, 294 (S.D.N.Y.

1975) (“[P]rominent placement of each of the familiar trademarks [Marlboro Lights and Winston

Lights] obviates the likelihood of confusion.”). These factors therefore strongly favor summary

judgment for Schneider’s Hometown.

Additionally, the record is devoid of evidence of deceptive intent on Schneider's part.

Actual confusion and deceptive intent are among the most important factors under Seventh Circuit

law. See G. Heileman Brewing Co., 873 F.2d at 999. As stated in Planet Hollywood (Region IV),

Inc. v. Hollywood Casino Corp., “[t]he complete absence of proof of any actual confusion … is a

serious blow to [plaintiffs'] infringement claim.” 80 F.Supp.2d 815, 884 (N.D.Ill. 1999). These

factors therefore strongly support summary judgment for Schneider’s.

Regardless, all forms of monetary relief are foreclosed to Sears. With respect to damages,

the law in the Seventh Circuit is clear: actual damages and actual confusion are required before a

court may award damages for a violation of the Lanham Act. See, e.g., Schutt Mfg. Co. v. Riddell,

Inc., 673 F.2d 202, 206 (7th Cir. 1982) (“A party seeking [damages] is required to show not only

the likelihood of ... confusion, but must also demonstrate that it has been damaged by actual

consumer reliance on the misleading statements.”). As the Court in Web Printing Controls Co. v.

Oxy-Dry Corp. stated:

A plaintiff wishing to recover damages for a violation of the Lanham Act must
prove the defendant's Lanham Act violation, that the violation caused actual
confusion among consumers of the plaintiff's product, and, as a result, that the
plaintiff suffered actual injury, i.e., a loss of sales, profits, or present value
(goodwill).

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906 F.2d 1202, 1204-04 (7th Cir. 1990). Likewise, here, the record is devoid of any evidence of

actual confusion, and Sears is precluded from recovering damages.

Absent a genuine issue of material fact, Schneider’s Hometown is entitled to judgment as

a matter of law. Sears cannot show that its unregistered trademarks (i.e., the word “hometown,”

its use of red, white, and blue coloring in its trade dress, and a generic telephone number) have

anything more than a generic or descriptive meaning such that the Lanham Act’s protections would

apply.

2. Count II – Tortious Interference with Contract

The elements of tortious interference with a contract are: (1) the existence of a valid and

enforceable contract; (2) the defendant's knowledge of the existence of the contract; (3) the

defendant's intentional inducement of the breach of contract; (4) the absence of justification; and

(5) damages resulting from the defendant's wrongful inducement of the breach. Allison v. Union

Hosp., Inc., 883 N.E.2d 113, 118 (Ind. Ct. App. 2008). One who induces a party to a contract to

break it, intending to injure another person or to get a benefit for himself, commits an actionable

wrong unless there is sufficient justification for the interference. Wade v. Culp, 107 Ind.App. 503,

23 N.E.2d 615, 618 (1939).

Critically, a plaintiff must prove the absence of justification by establishing that “the

interferer acted intentionally, without a legitimate business purpose, and the breach is malicious

and exclusively directed to the injury and damage of another.” Bilimoria Computer Sys., LLC v.

Am. Online, Inc., 829 N.E.2d 150, 156–57 (Ind. Ct. App. 2005). The overriding question in

deciding whether the defendant's actions were justified is “whether the defendant's conduct has

been fair and reasonable under the circumstances.” Id. at 156. In short, a legitimate reason for the

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defendant's actions provides the necessary justification to avoid liability. Morgan Asset Holding

Corp. v. CoBank ACB, 736 N.E.2d 1268, 1272 (Ind. Ct. App. 2000).

Here, Sears’ tortious interference claim is foreclosed because (1) there is no evidence

Schneider’s Hometown intentionally induced Scott Schneider into terminating the Dealer

Agreement, and (2) Schneider’s Hometown was opened for legitimate business reasons. Scott

Schneider has unequivocally testified he terminated the Dealer Agreement, not because of any

inducement on the part of Schneider’s Hometown defendants, but because Sears was not providing

him adequate inventory. Scott feared losing both the store and his home.

Likewise, a legitimate business reason for a defendant’s actions forecloses a tortious

interference claim. Here, the evidence shows Jerry Schneider had been selling appliances from his

home for many years and opened Schneider’s in order to expand his business opportunities. As

such, absent some evidence of intentional inducement or some evidence of malicious intent

exclusively directed to the injury and damage of Sears, Schneider’s Hometown is entitled to

summary judgment on Count II of the Complaint.

Count III – Tortious Interference with Prospective Economic Advantage

Under Indiana law, to prove a claim for tortious interference with a prospective economic

advantage, a plaintiff must establish: (1) the existence of a business relationship, (2) the defendant's

knowledge of the existence of that relationship, (3) the defendant's intentional interference in that

relationship, (4) the absence of any justification, and (5) damages. See Wright v. Associated Ins.

Cos. Inc., 29 F.3d 1244, 1252 (7th Cir. 1994); Butts v. Oce–USA, Inc., 9 F.Supp.2d 1007, 1012

(S.D.Ind. 1998); Furno v. Citizens Ins. Co., 590 N.E.2d 1137, 1140 (Ind. Ct. App. 1992). In

addition, the plaintiff must prove that the “defendant acted illegally in achieving his end.” See

Great Escape, Inc. v. Union City Body Co., 791 F.2d 532, 542 (7th Cir. 1986); Butts, 9 F.Supp.2d

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at 1012–13; Watson Rural Water Co. v. Indiana Cities Water Corp., 540 N.E.2d 131, 139 (Ind. Ct.

App. 1989); Johnson v. Hickman, 507 N.E.2d 1014, 1019 (Ind. Ct. App. 1987).

In this case, Sears alleges that Schneider’s Hometown interfered with a prospective

economic advantage by “intentionally interfering” with Sears’ right to enter the Corydon location

and operate it as a transition store upon termination of the Dealer Agreement. This claim fails for

multiple reasons. First, the evidence establishes Sears did not have a business relationship with

Alden Shipley. Second, the Schneider’s Hometown defendants had never seen or read the Dealer

Agreement and thus had no knowledge of its terms. Third, there is no evidence showing

Schneider’s intentionally interfered with any relationship between Sears and Shipley. And, lastly,

Sears has not alleged and cannot show that Schneider’s Hometown acted illegally. On the contrary,

the declaration of Alden Shipley makes clear that his decision not to rent the premises to Sears

was based upon multiple factors—none of which had anything to do with Jerry Schneider, Laura

Schneider, or Lynn Retail, Inc. Accordingly, Schneider’s Hometown is entitled to summary

judgment on Count III of the Complaint.

CONCLUSION

For foregoing reasons, there are no genuine issue of material fact and Defendants are

entitled to judgment as a matter of law. Therefore, this Court should grant summary judgment in

favor of Lynn Retail, Inc., Jerry Schneider, and Laura Schneider.

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Case 4:21-cv-00091-JMS-DML Document 55 Filed 06/30/22 Page 17 of 18 PageID #: 263

Respectfully submitted,

KIGHTLINGER & GRAY, LLP

By: /s/ Van T. Willis

Van T. Willis, Atty. #15604-82
Bonterra Building, Suite 200
3620 Blackiston Boulevard
New Albany, IN 47150
vwillis@k-glaw.com
(812) 949-2300
(812) 949-8556
Counsel for Defendants, Lynn Retail, Inc.
Jerry Schneider, and Laura Schneider

CERTIFICATE OF SERVICE

I hereby certify that on this 30th day of June, 2022, a copy of the foregoing Memorandum in
Support of Summary Judgment was filed electronically. Notice of this filing will be sent to the following
parties by operation of the Court’s electronic filing system. Parties may access this filing through the
Court’s system.

Michael W. Oyler
FURMAN NILSEN & OYLER, PLLC
2527 Nelson Miller Pkwy, Ste. 101
Louisville, KY 40223
P: (502) 593-3118
F: (502) 244-8383
mike@oylerlegal.com
mikeoyler34@yahoo.com

and
Fredric A. Cohen
Allison R. Grow
Charles J. Hoover
CHENG COHEN, LLC
363 W. Erie St., Ste. 500
Chicago, IL 60654
P: (312) 243-1701
F: (312) 277-3961
fredric.cohen@chengcohen.com
allison.grow@chengcohen.com
charles.hoover@chengcohen.com
Counsel for Plaintiff

/s/ Van T. Willis

Van T. Willis

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Case 4:21-cv-00091-JMS-DML Document 55 Filed 06/30/22 Page 18 of 18 PageID #: 264

KIGHTLINGER & GRAY, LLP

Bonterra Building, Suite 200
3620 Blackiston Boulevard
New Albany, IN 47150
(812) 949-2300
(812) 949-8556
vwillis@k-glaw.com

214254\62173988-1
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