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.
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.