Part‑Specific Proof or No Price Increase: Eleventh Circuit Clarifies Supplier Obligations, Upholds Severe Rule 37 Sanctions, and Elevates Settlement Memoranda in Defining Contract Scope

Introduction

In Whitesell Corporation v. Husqvarna Outdoor Products, Inc. (consolidated with Electrolux Home Products, Inc.), the Eleventh Circuit—per Judge Kidd, with Chief Judge William Pryor and Judge Grant concurring—brought to a close two decades of high-stakes commercial litigation stemming from a turbulent supplier relationship. The dispute arose from a Strategic Partnership Agreement (SPA) under which Whitesell was to supply “Goods” (various fasteners and Class C items) to Electrolux and, later, Husqvarna following its spinoff.

The litigation’s twists include: disagreement over the scope of the SPA (especially due to the parties’ failure to finalize “Exhibit B” listing covered parts), a subsequent Settlement Memorandum and consent order, serial discovery battles culminating in sanctions that struck Whitesell’s lost-profits claim, and pretrial rulings that pared down the case to a narrow set of issues tried to a jury in 2023. The appellate opinion affirms every challenged ruling—on summary judgment, sanctions, evidentiary exclusions, and denial of leave to amend—offering clear guidance on contract interpretation after later settlements, documentation required for contractually permitted price increases, and the consequences of discovery misconduct.

Key issues addressed:

• Whether a settlement memorandum can control and cure an otherwise indefinite SPA’s scope.
• Whether a court may decide contract scope on summary judgment without additional discovery.
• What evidence a supplier must produce to justify price increases under a clause requiring proof of changes to “specific unit prices.”
• When severe Rule 37 sanctions (striking a lost-profits claim) are warranted for discovery violations.
• The propriety of excluding “bad faith” and background evidence under Rules 401 and 403.
• Denial of a long-delayed motion to amend to add prejudgment interest.

Summary of the Judgment

The Eleventh Circuit affirmed the district court in full:

• Contract Scope: The Settlement Memorandum, not the SPA’s broad “Goods” definition, governs the enforceable scope; performance further cures indefiniteness. Deciding scope on summary judgment without additional discovery was proper because the issue was legal.
• Discovery Sanctions: Striking Whitesell’s lost-profits claim was within the court’s discretion under Rules 37(b)(2)(A) and 37(c), and inherent authority, given Whitesell’s repeated misrepresentations and withholding of ERP/IFS part-level cost data.
• Price Increase Claim: Summary judgment for Electrolux/Husqvarna was appropriate; the SPA required part-specific cost evidence supporting requested changes to specific unit prices. Generic commodity news articles and untranslated invoices did not suffice.
• Leave to Amend: Denial of Whitesell’s late motion to add prejudgment interest was proper due to undue delay; no need to reach futility.
• Trial Evidence: Exclusion of “bad-faith” emails, unpaid-invoice testimony, and pre-consent-order communications was proper under Rules 401/403 given the narrowed trial issues.
• Verdict: The jury’s defense verdicts and counterclaim awards stood, including findings that Whitesell failed to satisfy a concurrent condition (transitioning Brunner/Matrix parts) and provided inaccurate inventory information during phase-out.

Analysis

Precedents Cited and How They Shaped the Decision

• Contract interpretation and summary judgment:
  • Feliciano v. City of Miami Beach, 707 F.3d 1244 (11th Cir. 2013) and Ginsburg v. United States, 17 F.4th 78 (11th Cir. 2021): summary-judgment standards, de novo review.
  • Daewoo Motor America, Inc. v. GM, 459 F.3d 1249 (11th Cir. 2006): contract interpretation reviewed de novo.
  • Powers v. United States, 996 F.2d 1121 (11th Cir. 1993): affirm on any ground supported by the record.
  • Lawyers Title Ins. Corp. v. JDC, 52 F.3d 1575 (11th Cir. 1995): contract interpretation as a question of law.
• Modification and cure of indefiniteness (Georgia law):
  • Thomas v. Garrett, 456 S.E.2d 573 (Ga. 1995); Albany Fed. Sav. & Loan Ass’n v. Henderson, 36 S.E.2d 330 (Ga. 1945): parties may later modify a written contract to reflect their actual agreement.
  • Touche Ross & Co. v. DASD Corp., 292 S.E.2d 84 (Ga. Ct. App. 1982); Pine Valley Apartments, 237 S.E.2d 716 (Ga. Ct. App. 1977); Self v. Smith, 107 S.E.2d 721 (Ga. Ct. App. 1959): performance and acceptance can cure indefiniteness.
• Discovery management and sanctions:
  • Pesaplastic, C.A. v. Cincinnati Milacron, 799 F.2d 1510 (11th Cir. 1986) and Chudasama v. Mazda, 123 F.3d 1353 (11th Cir. 1997): abuse-of-discretion review for sanctions.
  • Hines v. Costa Crociere, 969 F.3d 1295 (11th Cir. 2020): inherent authority to sanction bad-faith conduct.
  • Malautea v. Suzuki, 987 F.2d 1536 (11th Cir. 1993); Harris v. Chapman, 97 F.3d 499 (11th Cir. 1996): wide discretion in sanctions.
  • Wallace v. Brownell Pontiac-GMC, 703 F.2d 525 (11th Cir. 1983): party must identify specific discovery needed to oppose summary judgment.
• Evidence and trial management:
  • Cabello v. Fernández-Larios, 402 F.3d 1148 (11th Cir. 2005): broad discretion to assess relevance (Rule 401).
  • United States v. Frazier, 387 F.3d 1244 (11th Cir. 2004): Rule 403 balancing—exclude where probative value is substantially outweighed by prejudice, confusion, or delay.
• Price-increase proof requirement and liquidated-damages interest:
  • Calderon v. Sixt, 114 F.4th 1190 (11th Cir. 2024): “mere scintilla” insufficient to withstand summary judgment.
  • Primary Investments LLC v. Wee Tender Care III, Inc., 746 S.E.2d 823 (Ga. Ct. App. 2013): give meaning to all contract terms.
  • Maynard v. Board of Regents, 342 F.3d 1281 (11th Cir. 2003): undue delay alone supports denial of leave to amend.

Legal Reasoning

1) Settlement Memorandum Controls Scope; Performance Cures Indefiniteness

The SPA’s “Goods” definition was expansive and amorphous, especially without the contemplated Exhibit B listing covered parts. Rather than attempt to enforce an indeterminate description sweeping in “any type of material” and “Class C items,” the court looked to the parties’ subsequent Settlement Memorandum, which:

• Enumerated identifiable categories (existing Whitesell-supplied parts; in-process transitions; designated Bamal-supplied parts; Brunner/wireform parts via Exhibit B-1).
• Reflected the parties’ intended narrowing of obligations, thereby modifying the SPA under Georgia law.

The court then added a fourth category through the parties’ course of performance: parts actually supplied under the agreements. Georgia law recognizes performance and acceptance can cure indefiniteness, making obligations enforceable within the realm of actual dealings. Because this interpretive issue was purely legal, the district court properly resolved it on summary judgment without additional discovery—especially where Whitesell identified no concrete discovery that could change the analysis.

2) Severe Rule 37 Sanctions for Withholding ERP/IFS Cost Data

Whitesell repeatedly represented that its IFS/ERP system did not track part-level cost data, despite emails and sworn testimony indicating otherwise. Years later, depositions confirmed the IFS contained “cost numbers” per part and maintained historical purchase-order data; additional cost data emerged only after the close of fact discovery. The court found violations of:

• Rule 37(b)(2)(A): failure to obey discovery orders to produce part-level cost data and to certify completeness.
• Rule 37(c): failure to supplement disclosures, thereby preventing the opposing party from using essential information.
• Inherent authority: bad-faith misrepresentations and strategic nonproduction warranting punitive measures.

Given the centrality of cost data to Whitesell’s lost-profits claim and the extensive prejudice caused by prolonged concealment, striking the lost-profits claim was not just permissible but proportionate. By contrast, Whitesell’s reciprocal sanctions motion, premised on Electrolux’s missing 2002–2004 executive emails, was denied as untimely and non-prejudicial to remaining claims—well within the court’s broad discretion.

3) Part-Specific Evidence Is Required for Contractual Price Increases

The SPA created a mechanism for price increases upon “drastic” cost changes but expressly required the supplier to “provide such cost increase evidence…for any requested changes in any specific unit prices.” On cross-motions for summary judgment, Whitesell’s submissions—general news articles about rising steel prices, a one-page “Taiwan Wire Analysis,” and untranslated invoices—were not tied to specific part numbers or to the magnitude of the requested increases (which varied from ~3% to ~96%) and even swept in non-steel parts. The undisputed record showed Electrolux requested supporting evidence (by calls and emails) and sought competitor quotes as the SPA permitted.

The court enforced the contract as written: proof must connect cost changes to the specific unit price at issue. Generic market trends, without part-level linkage, do not satisfy such clauses. The failure of proof warranted judgment as a matter of law against the price increase claim.

4) Denial of Late Amendment to Add Prejudgment Interest

Nearly ten years into the operative complaint, Whitesell sought to add prejudgment interest on unliquidated damages—contrary to a prior order removing interest claims. The district court denied leave for undue delay alone, a sound exercise of discretion under Maynard. Having so ruled, the court did not need to reach futility (which the district court alternatively found).

5) Narrowed Trial, Narrowed Evidence: Rules 401 and 403

With only discrete transition and inventory issues left for trial, the court excluded:

• 2004–2005 “bad-faith” emails about exiting the relationship,
• Testimony about $6.5 million unpaid invoices (later paid), and
• Pre-consent-order communications showing dissatisfaction in 2004.

None bore directly on the narrow surviving claims; admitting them risked unfair prejudice, jury confusion, and undue delay. The Eleventh Circuit endorsed the trial court’s gatekeeping under Rules 401 and 403, emphasizing that “full story” narratives cannot eclipse the constrained questions the jury must decide.

6) The Verdict and Concurrent Conditions

The jury found Husqvarna breached by not paying for Whitesell’s inventory but also found that Whitesell failed to perform a concurrent condition—properly transitioning supply of Brunner/Matrix parts at contract prices—offsetting recovery and producing counterclaim damages for inaccurate, untimely inventory lists to both Husqvarna and Electrolux. The Eleventh Circuit left the verdict and judgment undisturbed.

Impact

• Contract Drafting and Management:
  • Broad “requirements” language without an enumerated exhibit is risky; expect courts to anchor scope in later settlement instruments and actual performance.
  • Settlement memoranda can effectively become the governing contract on scope; update exhibits diligently or lose arguments for broader coverage.
• Price-Adjustment Clauses:
  • Where a contract demands proof for “specific unit prices,” suppliers must produce part-level cost support (e.g., ERP/IFS cost fields tied to part numbers, BOM-level material/labor/overhead deltas, and clear translation/traceability).
  • Commodity trend articles and generic analyses are inadequate, particularly for parts unaffected by the cited commodity or where increases vary widely without explanation.
• Discovery Discipline:
  • Courts will strike core damages theories where parties conceal or misrepresent the existence of key ERP/IFS data. Certifications carry real consequences.
  • Sanctions motions must be timely and linked to prejudice on the claims still in play; stale or tangential spoliation arguments are unlikely to succeed.
• Trial Focus:
  • As claims narrow, so does admissible evidence. “Bad-faith atmospherics” and historical grievances risk exclusion under Rules 401/403.
  • Concurrent conditions remain powerful defenses: a party cannot recover for another’s breach if it failed to perform its own dependent obligation.

Complex Concepts Simplified

• Indefiniteness cured by performance: Even if a contract term is too vague to enforce at inception, parties can “cure” it by actually performing in a consistent way that clarifies what the term means in practice.
• Modification by later agreement: Parties may adjust prior commitments through a subsequent settlement memorandum; that later document can supersede or refine earlier ambiguity.
• Summary judgment: A way to resolve claims without trial when no genuine dispute of material fact exists and the movant is entitled to judgment as a matter of law; contract interpretation questions are often purely legal.
• Standards of review:
  • De novo: The appellate court gives no deference, re-deciding the legal question (e.g., contract interpretation).
  • Abuse of discretion: Substantial deference to the trial judge’s judgment calls (e.g., sanctions, evidentiary rulings, trial management, leave to amend timing).
• Rule 37(b) and 37(c) sanctions:
  • Rule 37(b) punishes disobeying discovery orders (including striking claims).
  • Rule 37(c) punishes failure to disclose or supplement; undisclosed information may be excluded and further sanctions imposed.
  • Courts also wield inherent authority to sanction bad-faith litigation conduct.
• Rules 401 and 403:
  • Rule 401: Evidence must make a consequential fact more or less likely.
  • Rule 403: Even relevant evidence may be excluded if its probative value is substantially outweighed by unfair prejudice, confusion, or delay.
• Concurrent conditions: Mutual obligations that are due at the same time; a party generally cannot claim the other breached if it failed to perform its own concurrent duty.
• Prejudgment interest under Georgia law: Typically available as of right only for liquidated damages (sum certain at breach); for unliquidated amounts, it’s discretionary or unavailable, and delay can bar late claims to add interest.

Practical Guidance for Counsel and Businesses

• Anchor scope in writing: If an SPA anticipates an exhibit (e.g., Exhibit B listing parts), complete and regularly update it. If litigation ensues, expect courts to privilege later settlements and actual performance over aspirational breadth.
• Design price-increase protocols:
  • Link each requested increase to a specific part number and unit price.
  • Document BOM-level changes (material, labor, overhead), with date-stamped ERP snapshots and translated, verifiable supplier invoices.
  • Explain variability across parts; justify why some items require steeper changes.
• Treat ERP/IFS data as discoverable: Inventory and preserve standard cost fields, purchase-order histories, and cost snapshots. If data is inaccurate, disclose and explain—do not conceal.
• Certify with care: A Rule 26/37 certification that “all responsive data” has been produced must be accurate. Misstatements can cost a damages theory (or the case).
• Sanctions strategy: Move promptly on spoliation or discovery failures; show relevance to live issues and concrete prejudice.
• Pretrial triage: Tailor exhibits and testimony to the narrowed issues; background “bad faith” narratives may be excluded and can distract from the claims that remain.
• Plan for concurrent conditions: If your right to payment is conditioned on a transition or other deliverable, document full and timely performance; deficiencies can defeat your claim.
• Amend early or not at all: Requests to add claims (including interest) late in protracted litigation are susceptible to denial for undue delay.

Conclusion

The Eleventh Circuit’s decision underscores three practical rules for complex supply relationships:

1. Settlement memoranda and performance define enforceable scope where original agreements are indefinite or incompletely implemented.
2. Price increases require part-specific proof when the contract says so; generalized market data will not carry the day.
3. Discovery transparency is non-negotiable; withholding ERP/IFS cost data can cost a party its lost-profits claim, and courts will sustain severe sanctions for sustained noncompliance and misrepresentation.

By affirming summary judgment rulings, discovery sanctions, evidentiary exclusions, and case-management discretion, the court fortifies a pragmatic, disciplined approach to long-running commercial disputes: narrow the issues to what the parties proved and performed, enforce contracts as written, and ensure the truth-finding process is not undermined by discovery gamesmanship. For suppliers and OEMs alike, the message is clear—document precisely, disclose completely, and litigate within the contract you actually made and performed.