April 11 (Bloomberg) -- A lawyer for Martha Stewart Living Omnimedia Inc. said “there’s not going to be a Martha Stewart store at J.C. Penney anymore” during arguments over a breach-of-contract claim brought by Macy’s Inc.
The lawyer, Eric Seiler, asked a state court judge in Manhattan today to dismiss Macy’s claim, which was brought in a dispute over whether J.C. Penney Co. can sell some Martha Stewart merchandise. Seiler told New York State Supreme Court Justice Jeffrey Oing that the agreement with Macy’s doesn’t prevent Martha Stewart Living from giving designs for products in exclusive categories to others.
“We’ve not promised to give them all of our best designs,” Seiler said.
The judge is hearing motions by the three retailers after the conclusion of Macy’s case. If any part of the lawsuit survives, Martha Stewart Living and J.C. Penney may be forced to present a defense. Afterwards, the judge will deliver a verdict in the non-jury trial.
Oing ruled yesterday that Martha Stewart Living didn’t violate the confidentiality requirement of its Macy’s contract by disclosing it to rival J.C. Penney. A Macy’s lawyer said the company will appeal that decision.
The three sides returned to court this week to resume a trial of Macy’s lawsuits following a monthlong break, during which mediation efforts ordered by Oing were unsuccessful. The trial, which began Feb. 20, has featured testimony from Martha Stewart, Macy’s Chairman Terry Lundgren and former J.C. Penney Chief Executive Ron Johnson, who was ousted the same day the trial resumed.
Before today’s proceeding, Seiler declined to comment on a New York Post report, citing a source it didn’t name, that Johnson’s replacement at Plano, Texas-based J.C. Penney, Mike Ullman, is seeking a settlement in the case.
J.C. Penney in December 2011 acquired a 17 percent stake in New York-based Martha Stewart Living for $38.5 million.
Macy’s, which has sold Martha Stewart-branded home goods since 2007, sued her company in January 2012, saying it had the exclusive right to sell items in certain categories including bedding and cookware. Cincinnati-based Macy’s sued J.C. Penney about three months later.
The cases are Macy’s Inc. v. Martha Stewart Living Omnimedia Inc., 650197/2012; Macy’s Inc. v. J.C. Penney Corp., 652861/2012, New York State Supreme Court (Manhattan).
To contact the reporter on this story: Chris Dolmetsch in New York State Supreme Court in Manhattan at firstname.lastname@example.org
To contact the editor responsible for this story: Michael Hytha at email@example.com