NEW YORK (TheStreet) -- A New York state judge ruled that J.C. Penney (JCP) interfered with a contract between Macy's (M) and Martha Stewart Living (MSO) when it signed a contract to sell Martha Stewart branded products in 2011.
New York State Judge Jeffrey K. Oing ruled that Martha Stewart Living had breached its exclusive contract with Macy's when it sold a 17% stake in its business to J.C. Penney three years ago for $38.5 million.
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Macy's sued Martha Stewart Living a month later, claiming that that it had exclusive rights to sell its products due to a 2006 agreement between the two companies.
Oing also ruled that Macy's did not prove that it should receive punitive damages despite the breach of contract.
J.C. Penney announced that it was scaling back its agreement with Martha Stewart in October and only selling products that fell outside of the scope of the Macy's/Martha Stewart agreement.
TheStreet Ratings team rates PENNEY (J C) CO as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation: