Costco Wholesale Corp. v. World Wide Licensing Corp.

Worldwide Licensing Corp. (Worldwide) (defendant), whose name was misspelled in the pleading caption, is a wholesale jewelry seller that sought to do business with Costco Wholesale Corp. (Costco) (plaintiff). At a meeting between Costco executive Megghan Harruff, Worldwide executive Ed Dose, and Loren Coleman, an independent sales agent acting on behalf of Worldwide, Costco agreed to purchase 2,080 boxes of jewelry from Worldwide for $74,880. Costco paid the amount by check. Because of Harruff’s indication that the jewelry would sell quickly and that subsequent orders might be needed, Coleman recommended to Dose that Worldwide manufacture 1,248 additional boxes to have at the ready. Costco was not made aware of this request. When the jewelry was delivered, Costco was dissatisfied with its quality and complained to Worldwide. Dose instructed Coleman to offer Costco an $8 rebate per box provided that Costco agree to purchase the additional jewelry manufactured by Worldwide. The parties orally agreed to the rebate, but it is unclear whether Coleman obtained Costco’s agreement to the additional order. Worldwide then refused to pay the rebate because Costco would not purchase the additional jewelry. Costco sued Worldwide for the rebate amount. Each party argued that the statute of frauds precluded enforcement of the oral modification alleged by the other. The trial court granted summary judgment to Costco. Worldwide appealed.