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Professional Led Lighting, Ltd. v. Aadyn Technology, LLC

United States District Court, N.D. Illinois, Eastern Division

November 21, 2014

PROFESSIONAL LED LIGHTING, LTD., Plaintiff,
v.
AADYN TECHNOLOGY, LLC, FRANK GALLAGHER, MARC KAYE, and WALTER LEFLER, Defendants.

MEMORANDUM OPINION AND ORDER

AMY J. ST. EVE, District Judge.

Before the Court is Defendants' Aadyn Technology, LLC ("Aadyn" or "Defendant Aadyn"), Frank Gallagher, Marc Kaye, and Walter Lefler (collectively, "Defendants"), motion to dismiss. For the following reasons, the Court grants in part and denies in part Defendants' motion, and orders the transfer of this case in its entirety to the Southern District of Florida pursuant to 28 U.S.C. § 1404(a) as to the state law claims and either 28 U.S.C. § 1404(a) or 28 U.S.C. § 1406 as to the copyright infringement claim.

BACKGROUND

Plaintiff Professional LED Lighting Ltd., ("LED" or "Plaintiff LED") has filed a complaint alleging (1) fraud and civil conspiracy against all Defendants based on interactions between Defendants and Phil Contursi ("Contursi");[1] (2) unjust enrichment against Aadyn based on interactions between Aadyn and Contursi; (3) breach of contract against Aadyn based on interactions between Aadyn and Product Productions, Inc. ("PPI");[2] (4) fraud and civil conspiracy against all Defendants based on interactions between Defendants and PPI; (5) unjust enrichment against Aadyn based on interactions between Aadyn and PPI; and (6) copyright infringement against all Defendants based on PPI's copyright. ( See generally R.1, Plaintiff LED's Complaint.)

Defendants move to dismiss LED's complaint on several bases. Defendants move under Rule 12(b)(3) for the Court to dismiss the action for improper venue or transfer any remaining claims to the Southern District of Florida. ( See Fed.R.Civ.P. 12(b)(3); R.12, Defs.' Motion to Dismiss, at 18-19.) Defendants also move under Rule 12(b)(6) as to LED's claims directed to copyright infringement (Count VIII), civil conspiracy (Counts II and VI), and fraud (Counts I and V). ( See Fed.R.Civ.P. 12(b)(6); R.12, at 6; see also R.1, Compl. ¶¶ 62-78, 91-106, and 113-126.) Defendants further move under Rule 12(b)(1) to dismiss LED's non-copyright claims (Counts I-VII) and Rule 12(b)(2) to dismiss the Individual Defendants from this suit. ( See Fed.R.Civ.P. 12(b)(1); Fed.R.Civ.P. 12(b)(2); R.12, at 6; see also R.1, ¶¶ 62-112.)

I. The Parties' Relationship

LED alleges that Contursi and PPI both have affiliations with Defendants stemming from their work in the lighting industry.[3] Contursi first met Defendants Lefler and Kaye in the spring of 2011 at a National Association of Broadcasters in Las Vegas, Nevada. (R.1, ¶ 15.) Defendant Lefler is a "manager/member of Defendant Aadyn, formerly served as its President and currently serves as its Chief Technology Officer, " ( Id., ¶ 6) and Defendant Kaye is a "manager/member of Defendant Aadyn and currently serves as its Chief Operating Officer." (R.1, ¶ 5.) Contursi had professional experience and substantial knowledge regarding professional lights and lighting equipment that Aadyn seemed to value as it communicated its interest in working with Contursi and sought to benefit from his knowledge and experience. ( Id., ¶ 16.)

Contursi began providing business consultation, advice, and assistance on various lights produced by Aadyn in May of 2011, e.g., the ECO 5600 light (name changed to the Punch 5600) and the Punch light (name changed to the Punch Plus). ( Id., ¶¶ 18-19.) In the fall of 2011, Contursi advised Aadyn that it needed a smaller light and, at Aadyn's request, Contursi began working with Sturdy Corp - an engineering facility in North Carolina - to design the new smaller light, named Jab. ( Id., ¶¶ 20-21.) Contursi also worked with MCS - a manufacturing plant in North Carolina-to develop a monitor tent, a heat shield tent, and a lens guard for Aadyn branded products (namely the Punch, Punch Plus, and Jab lights). ( Id., ¶ 22.) In addition, Contursi worked with Chimera - a company in Boulder, Colorado that designs and manufactures portable lighting products - to develop a Lightbank for Aadyn. ( Id., ¶ 27.) Aadyn requested that Contursi create promotional materials to use at tradeshows and events, and Contursi had vinyl signs, an illuminated light box, and Plexiglas tanks with pumps created at his own expense. ( See id., ¶¶ 28-29, 38.)

Over the course of at least two years (from 2011-2013), Contursi travelled, upon Aadyn's request, to various industry conferences in New York, Orlando, Hollywood, Las Vegas, Los Angeles, and Chicago to promote Aadyn's branded products. ( See R.1, ¶¶ 23-25, 30, 32, 33, 35-37.) The only technical support contact on Aadyn's website was Contursi (contursi@aadyntech.com). ( Id., ¶ 39.) Contrusi introduced Aadyn to customers who later purchased Aadyn's branded products and he solicited, recruited, and contracted numerous dealers and sales representatives in the United States, Canada and Europe to market and sell Aadyn's branded products. ( See id., ¶¶ 24, 42.) Contursi incurred travel, lodging and miscellaneous expenses in travelling to various locations, promotion and attending numerous trade shows for Aadyn. (R.1, ¶ 43.)

While working with Contursi, Aadyn also shared its interest in having PPI[4] create, direct and produce numerous audiovisual works (the "PPI Videos") for use in promoting Aadyn's lights and lighting equipment and providing information and training to customers. ( Id., ¶ 55.) PPI spent time, labor and expense to create, direct and produce numerous PPI videos used by Aadyn for promotional, informative, and training purposes. ( Id., ¶¶ 56-57.)

II. The Forum Selection Clause And Governing Law Provisions of the Parties' Agreements

Plaintiff LED's complaint references three agreements, one between Defendants and Plaintiff LED (later assigned to PPI), and the other two between Defendants and Contursi and/or PPI (later assigned to Plaintiff LED). ( See R.1, ¶¶ 46-49.) These agreements are each discussed below.

A. The Non-Exclusive Representative Agreement

Shortly after meeting Defendants Kaye and Lefler, Contursi (on behalf of PPI) and Defendant Kaye (on behalf of Aadyn) signed a non-exclusive agreement whereby Aadyn sought the services of PPI as an independent contractor and sales representative for Aadyn branded products (the "Non-Exclusive Representative Agreement"). ( Id., ¶ 46; see also R.1-3, Non-Exclusive Representative Agreement, attached to Compl. as Ex. C, ¶ 46.) PPI's sales market territory under the Non-Exclusive Representative Agreement was Illinois, Indiana, Wisconsin, Michigan, Missouri, and Minnesota. (R.1, ¶ 46.) Per the agreement, Aadyn pays 10% commission for PPI's monthly net sales of Aadyn branded products from the previous month's paid invoices. ( Id. ) The Non-Exclusive Representative Agreement contains a forum selection clause, which states:

This Agreement is made and executed in the State of Florida and shall be construed under the laws thereof. The Courts of Broward County Florida shall have exclusive jurisdiction of any matter regarding this Contract or the relationship of the parties.

(R.1-3, at 3, ¶ 18.) The Non-Exclusive Representative Agreement was signed by Defendant Kaye as CFO/EVP for Defendant Aadyn and by Contursi as Founder for PPI. ( See R.1-3, at 3.) PPI later assigned the Non-Exclusive Representative Agreement to Plaintiff LED. (R.1, ¶ 49.)

B. The Non-Exclusive Dealership Agreement

Aadyn and Plaintiff LED also entered into a non-exclusive dealer agreement setting up a vendor/vendee relationship in the spring of 2012 (the "Non-Exclusive Dealership Agreement"). ( See R.1, ¶ 48; see also R.1-5, Non-Exclusive Dealership Agreement, attached to Compl. as Ex. E, ¶ 48.) The Non-Exclusive Dealership Agreement provided that Plaintiff LED would purchase, inventory, promote, and sell Aadyn branded products. (R.1, ¶ 48.) The primary marketing area for the Non-Exclusive Dealership Agreement consisted of Illinois, Indiana, Michigan, Missouri, Minnesota, and Wisconsin. ( Id. ) The Non-Exclusive Dealership Agreement contains a "Governing Law" provision, which states: "[t]his Agreement shall be construed and enforced in accordance with the laws of the state of Florida." (R.1-5, at 5, ¶ 23.) Plaintiff LED assigned the Non-Exclusive Dealership Agreement to PPI. ( Id., ¶ 49.)

C. The Additional Rep/Dealer Agreement

Contursi entered into an additional agreement with Aadyn in March of 2012, entitled "Contursi Client List and Agreement, " (the "Additional Rep/Dealer Agreement"). (R.1, ¶ 47; see also R.1-4, Additional Rep/Dealer Agreement, attached to Compl. as Ex. D, ¶ 47.) The Additional Rep/Dealer Agreement expanded PPI's sales market territory in exchange for Aadyn's payment of 5% commissions to PPI for related sales and mandated that all sales go through an Aadyn authorized dealer. ( See R.1-4, at 1.) Contursi and Defendant Aadyn signed the Additional Rep/Dealer Agreement, which thanks and acknowledges Contursi for all his valuable work. ( See id., at 3, "Thanking you for all your valuable work.") The Additional Rep/Dealer Agreement does not contain a forum selection clause, but does contain a choice of law provision stating "[a]ny disputes to this agreement will be determined by AAdyn Technology LLC, and the governing law shall be construed and enforced in accordance with the laws of the state of Florida." (R.1-4, at 2.) As it did with the Non-Exclusive Representative Agreement, PPI later assigned the Additional Rep/Dealer Agreement to Plaintiff LED. (R.1, ¶ 49.)

III. The Dispute

Defendants have not paid Contursi for his business consultation, advice, and assistance, nor have they reimbursed Contursi for his travel, lodging, and miscellaneous expenses. (R.1, ¶¶ 44-45.) In August of 2013, while attending the Fire-Rescue International event in Chicago, Illinois, Contursi met Defendant Gallagher, Aadyn's Chief Executive Officer, and inquired as to when he could expect payment, to which Defendant Gallagher replied "[w]hen Aadyn turns a profit, those who have worked will get paid." (R.1, ¶¶ 4, 37.) Despite the fact that Plaintiff LED sold Aadyn branded products and submitted invoices to Aadyn, Defendants failed to pay Plaintiff LED for all commissions earned. ( Id., ¶ 50.) In November of 2013, Aadyn sent Plaintiff LED written notice terminating the Non-Exclusive Representative Agreement. ( Id., ¶ 51; see also R.1-6, Termination Letter, attached to Compl. as Ex. F, ¶ 51.) Aadyn removed Plaintiff LED as a listed sales representative from its website and at least two days prior to Plaintiff LED filing its complaint, Aadyn listed PPI as a dealer on its ...


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