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Guild Seeking $6.5 Million In Damages From J.C. Penney

NEW YORK — Guild Inc. is seeking $6.5 million in damages against J.C. Penney Co. in a Texas federal district court, alleging breach of contract and fraud regarding chargebacks.<br><br>The lawsuit was originally filed in a Dallas federal court in...

NEW YORK — Guild Inc. is seeking $6.5 million in damages against J.C. Penney Co. in a Texas federal district court, alleging breach of contract and fraud regarding chargebacks.

The lawsuit was originally filed in a Dallas federal court in March, but transferred by the court to a different federal division, this time in Tyler, Tex. Tyler is part of the judicial geographic division that includes Plano, home of Penney’s headquarters.

The lawsuit says the chargebacks issued by the retailer against Guild were “not justified” under the contract. Examples alleged in the lawsuit include refusal by Penney’s to provide justification for the charges despite timely objection by Guild, as well as charges for items shipped and received “more than a year before the date of the chargeback, in clear contravention of the contract.”

A Penney’s spokesman said, “We are prepared to vigorously defend against these claims, which we believe are without merit.”

The retailer has filed an answer and counterclaim, alleging that Guild failed to allow chargebacks for lost and late merchandise according to the terms of their agreement, Guild said in a statement. Robert Filteau of Filteau and Sullivan, representing Guild, said the next step will be to file a response to the retailer’s counterclaims.

As reported, the children’s and junior apparel manufacturer is also a party to a lawsuit it filed against the retail chain last week in a Los Angeles federal court, alleging copyright infringement over a floral screen print, and is seeking $3.5 million in damages.