Three years following Dreamstyle Remodeling’s filing of a $240 million lawsuit against Renewal by Andersen based on wrongful contract termination, an arbitration panel has awarded Dreamstyle $7 million.
The relationship between the two brands began in 2006, when Larry Chavez, then owner of Albuquerque-based Dreamstyle, was offered the opportunity to become New Mexico’s exclusive dealer of Renewal by Andersen products, according to court documents. Over the next seven years, the relationship expanded to include markets in Arizona, Idaho, and California.
RELATED: New Private Equity-Backed Home Improvement Network Launches with Dreamstyle Remodeling
During that time, Dreamstyle emerged as one of Minneapolis-based Renewal’s largest retailers, increasing their use of the manufacturer’s products by 35% per year for seven years, according to court documents. Renewal products became “one of the mainstays” of the business, according to reports by the Albuquerque Journal.
Dreamstyle took legal action in 2019, filing federal lawsuits in California and New Mexico claiming breach of contract, wrongful termination, fraud, and monopolization.
Both lawsuits were agreed to be settled by an arbitration panel, and the panel based its finding on the claims of breach of contract and wrongful termination but sided with Renewal on its contract termination for two of the five territories.
Claims of fraud, violation of franchise status, tortious interference with contraction, and rescission damages were all dismissed.
Contract Termination and Lawsuit
In May 2018, a Renewal executive requested a surprise meeting with Dreamstyle, announcing that the company was terminating all of Dreamstyle’s retail agreements. The termination was backed by a list of alleged contract violations, which Dreamstyle claimed were “not proper bases for termination,” according to the suit. The meeting lasted 12 minutes.
Dreamstyle alleged that Renewal attempted to monopolize the window and door replacement business due to ending the contract after Dreamstyle disclosed it wished to sell other brands and products in addition to the Renewal brand. Dreamstyle claimed it spent $34 million in marketing the Renewal brand from 2014 to 2019, yet the brand did not offer Dreamstyle good cause for canceling the contract and giving the company a chance to fix any performance issues, going against their retail agreements.
The lawsuit outlines several instances of tension between the two companies. One of which occurred in 2017 when Dreamstyle CEO Larry Chavez acquired naming rights to the University of New Mexico’s stadium for $10 million. A Renewal executive “chastised” Chavez’s decision of using the funds for his brand and not on Renewal marketing.
Other alleged tensions included discussions of declining product quality and discrimination.
Add new comment
Related Stories
Pro Remodeler’s 2024 Pinnacle Experience Reaches New Heights
The sold-out event covered leadership, lead gen, sales, and technology
Brian Gottlieb Receives Remodeling Mastery Award
Presented by industry icon, Mark Richardson, the award celebrated Gottlieb’s extraordinary impact on remodeling
What's Beyond the Hammer?
Working with Brian Gottlieb on the book Beyond the Hammer provided a masterclass on how to build an aligned team
5 Counterintuitive Strategies to Improve Your Business
Follow these strategies to inspire employees, instill trust, and beat the competition
Couple Act As Much More Than General Contractors
How LBR Partners uplifts and educates their Spanish-speaking trade partners
How to Correctly Hire for Business Growth
Refloor CEO Brian Elias shares exactly how his company hires the correct people for the correct seats
Power Home Remodeling Expands Financing Offshoot with $400M from Goldman Sachs
Industry-leading home improvement company Power plans to grow its fintech offshoot fivefold with new investment
· sponsored
Increase sales and grow your business with Momnt Contractor Financing
Give your clients simple, fast, and affordable payment options for the investments that matter most
Great Day Improvements Acquires LeafGuard and Englert
Leading home improvement company Great Day Improvements purchases two major brands from private equity firm Audax
Latest Private Equity Activity Signals Continued Strength in Home Improvement
A hot month for private equity means the industry remains opportunity-rich