Opinion
CASE NO. 18-CIV-80758-RAR
2019-09-06
ORGANO GOLD INT'L, INC., Plaintiff, v. AUSSIE RULES MARINE SERVICES, LTD., et al., Defendants.
James M. Bulthuis, Kevin Arnold Bay, Tousley Brain Stephens, Seattle, WA, Juan Guillermo Sanchez, Cardozo, Eckert & Sanchez, PLLC, Hollywood, FL, Wilfredo A. Rodriguez, Jennifer Nicole Hernandez, Avila Rodriguez Hernandez Mena & Ferri LLP, Coral Gables, FL, Seth A. Nichamoff, Pro Hac Vice, Nichamoff Law PC, Houston, TX, for Plaintiff. Jose Manuel Ferrer, Desiree Erin Fernandez, Bilzin, Sumberg, Baena, Price & Axelrod, LLP, Miami, FL, for Defendants.
James M. Bulthuis, Kevin Arnold Bay, Tousley Brain Stephens, Seattle, WA, Juan Guillermo Sanchez, Cardozo, Eckert & Sanchez, PLLC, Hollywood, FL, Wilfredo A. Rodriguez, Jennifer Nicole Hernandez, Avila Rodriguez Hernandez Mena & Ferri LLP, Coral Gables, FL, Seth A. Nichamoff, Pro Hac Vice, Nichamoff Law PC, Houston, TX, for Plaintiff.
Jose Manuel Ferrer, Desiree Erin Fernandez, Bilzin, Sumberg, Baena, Price & Axelrod, LLP, Miami, FL, for Defendants.
ORDER ON DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
RODOLFO RUIZ, UNITED STATES DISTRICT JUDGE
THIS CAUSE comes before the Court on Defendants, Aussie Rules Marine Services, Ltd.'s ("ARMS"), Greg Norman's ("Norman"), and ABG-Shark, LLC's ("ABG-Shark") Motion for Summary Judgment [ECF No. 63], filed June 12, 2019. Defendants assert they are entitled to summary judgment on Plaintiff Organo Gold Int'l, Inc.'s ("Organo Gold") claims for declaratory judgment, injunctive relief, and breach of contract, and on ABG-Shark's counterclaim against Plaintiff for breach of contract. Having considered the parties written submissions, the record, and applicable case law, it is hereby
ORDERED AND ADJUDGED that Defendants' Motion for Summary Judgment [ECF No. 63] is GRANTED IN PART AND DENIED IN PART as set forth herein.
BACKGROUND
Plaintiff Organo Gold sources, markets, and distributes various products, including coffee products, through a network of independent distributors in the United States. See Defendants' Statement of Material Facts [ECF No. 62] ("Defs. SOMF") ¶ 3; Plaintiff's Statement of Material Facts [ECF No. 73] ("Pl. SOMF") ¶ 3. In 2013, Plaintiff entered two agreements with former professional golfer Norman and his company, ARMS, to promote its products using Norman's identity. Defs. SOMF ¶¶ 1–2, 4, 12; Pl. SOMF ¶¶ 1–2, 4, 12. This action stems from both sides' purported breaches of these agreements. The facts relevant to the instant Motion follow.
A. The License Agreement
In July 2013, Plaintiff entered into a License Agreement with Norman and ARMS. Defs. SOMF ¶ 4; Pl. SOMF ¶ 4. Under the License Agreement, Norman and ARMS agreed to license Norman's identity to Plaintiff for marketing purposes in exchange for certain royalty fees. Defs. SOMF ¶ 4; Pl. SOMF ¶ 4; see also License Agreement [ECF No. 61-1] at 188–206.
The License Agreement requires ARMS to use "commercially diligent efforts" to conduct trademark searches in certain countries to determine whether Norman's identity can be registered as a trademark in those countries. See License Agreement ¶ 8.3; Pl. SOMF ¶ 5. It further provides: "Following such diligence, ARMS agrees to use commercially reasonable efforts to apply for and seek the necessary registration of the Norman Identity for the Branded Products. " License Agreement ¶ 8.4 (emphasis added); Defs. SOMF ¶ 5; Pl. SOMF ¶ 5.
"Branded Products" is defined as "Norman approved premium signature coffee sold by Organo Gold pursuant the Business Plan. " License Agreement ¶ 1.2(b) (emphasis added); Defs. SOMF ¶ 6; Pl. SOMF ¶ 6. The "Business Plan" is defined as a plan consisting of:
i. The brand development, brand plan and marketing objectives of the Business for the Financial Year;
ii. The operating and financial targets and forecasts of the Business for the Financial Year; and
iii. Business and financial forecasts for the Business for the 5 (five) Financial Years following the Financial Year.
License Agreement ¶ 1.2(e); Defs. SOMF ¶ 7; Pl. SOMF ¶ 7. The License Agreement places the burden of developing and implementing the Business Plan on Plaintiff. License Agreement ¶ 10.1; Defs. SOMF ¶ 8; Pl. SOMF ¶ 8.
The License Agreement also contains the following default provisions:
13.1 Either party shall have the right, without prejudice to any other rights it may have, to terminate this Agreement if the other Party materially breaches its obligations hereunder and such breach remains uncured. A material breach occurs if either Party:
a. Fails to make any payment as required, or
b. Fails to observe or perform any of the covenants, agreements, or obligations (other than payments of money).
13.2 Upon the breach of either of the above conditions, the non-defaulting Party may terminate this Agreement as follows:
a. With respect to "13.1(a)" above, if payment is not made within ten (10) days after the defaulting Party shall have received Notice of such failure to make payment;
b. With respect to "13.1(b)" above, if such default is not cured within thirty (30) days after the defaulting Party shall have received Notice specifying in reasonable detail the nature of such default and such action the defaulting Party must take in order to cure each such item of default.
License Agreement ¶¶ 13.1, 13.2; Defs. SOMF ¶ 10; Pl. SOMF ¶ 10.
B. The Promotion Agreement, Amendment, and Assignment
In September 2013, Plaintiff entered into a Promotion and Services Agreement ("Promotion Agreement") with Norman and ARMS. Defs. SOMF ¶12; Pl. SOMF ¶ 12. Under the Promotion Agreement, Norman and ARMS agreed to provide promotion and consulting services to further Plaintiff's business interests, in exchange for the payment of service fees. Defs. SOMF ¶ 12; Pl. SOMF ¶ 12; Promotion Agreement [ECF No. 61-1] at 207–221. The Promotion Agreement requires Norman to make himself available to Plaintiff for a certain number of promotional appearances per year of the contract. See Promotion Agreement ¶ 2.1. It also provides: "ARMS shall use their reasonable efforts during the Contract Period to promote the business of Organo Gold in the Contract Territory." Promotion Agreement ¶ 3.2. This requires ARMS to make "its resources, including its senior managers, available to Organo Gold for consultation as is reasonably requested," among other obligations. Promotion Agreement ¶ 3.2(a). In exchange for these services, the Promotion Agreement sets forth "service fees" Plaintiff was required to pay ARMS and Norman. Defs. SOMF ¶ 16; Pl. SOMF ¶ 16; Promotion Agreement ¶ 6.1.
Like the License Agreement, the Promotion Agreement allows either party to terminate the Agreement if the other party "materially breaches its obligations ... and such breach remains uncured." Promotion Agreement ¶ 13.2; Defs. SOMF ¶ 13; Pl. SOMF ¶ 13. The Promotion Agreement contains the same notice-and-cure provision as paragraph 13.2 of the License Agreement. Promotion Agreement ¶ 13.3; Defs. SOMF ¶ 13; Pl. SOMF ¶ 13.
In January 2016, Plaintiff was experiencing a decline in overall product sales. Defs. SOMF ¶ 17; Pl. SOMF ¶ 17. Plaintiff proposed, and ARMS and Norman accepted, a monthly payment plan extending the due dates for all outstanding payments under the Promotion Agreement. Defs. SOMF ¶ 18; Pl. SOMF ¶ 18. Thus, Plaintiff, ARMS, and Norman entered into an Amendment to the Promotion Agreement ("Amendment," or collectively with the Promotion Agreement, the "Amended Promotion Agreement"), effective August 31, 2016, restructuring the payment schedule. Defs. SOMF ¶ 19; Pl. SOMF ¶ 19; Amendment [ECF No. 61-1] at 222–24. The Amendment provides for scheduled monthly payments over a three-year period, beginning on September 1, 2016 and ending on August 1, 2019. Defs. SOMF ¶ 20; Pl. SOMF ¶ 20; Amendment at 222–223.
On March 14, 2017, Norman and ARMS assigned the monetary benefits of the Amended Promotion Agreement to ABG-Shark. Def. SOMF ¶ 21; Pl. SOMF ¶ 21. The Promotion Agreement permits assigning the monetary benefits of the Agreement. Promotion Agreement ¶ 19.6. Plaintiff disputes that only monetary benefits were assigned by Norman and ARMS. Pl. SOMF ¶ 21. After the assignment, Plaintiff made six payments under the Amended Promotion Agreement directly to ABG-Shark. Defs. SOMF ¶ 23; Pl. SOMF ¶ 23.
C. The Parties' Purported Breaches of the Agreements
Both sides claim the other breached at least one of the Agreements.
1. Plaintiff's Purported Breach
It is undisputed that the last payment Plaintiff made pursuant to the Amended Promotion Agreement was the payment due July 1, 2017. Defs. SOMF ¶ 24; Pl. SOMF ¶ 24. Plaintiff failed to make the payment due August 1, 2017 and all payments due thereafter. Defs. SOMF ¶ 24; Pl. SOMF ¶ 24.
On September 22, 2017, ABG-Shark provided Plaintiff with a letter giving notice of Plaintiff's failure to make the payments due August 1, 2017 and September 1, 2017 under the Amended Promotion Agreement. Defs. SOMF ¶ 25; Pl. SOMF ¶ 25; ABG-Shark's Notice Letter [ECF No. 60-1] at 205–06. ABG-Shark never terminated the Amended Promotion Agreement. Defs. SOMF ¶ 27; Pl. SOMF ¶ 27.
2. Defendants' Purported Breaches
On October 4, 2017, Plaintiff sent a letter to ARMS and Norman accusing them of breaching several provisions of the License Agreement and Promotion Agreement. Defs. SOMF ¶ 28; Pl. SOMF ¶ 28. These include, among other alleged breaches: Norman's failure to make himself available for certain appearances or correspondence in violation of paragraphs 2.1, 2.3, and 2.4 of the Promotion Agreement; ARMS' failure to use reasonable efforts to promote Plaintiff's business in violation of paragraph 3.1 of the Promotion Agreement; and ARMS' failure to use "commercially reasonable efforts" to obtain trademark registrations in violation of the License Agreement. Pl.'s Notice Letter [ECF No. 60-1] at 207–10.
On November 7, 2017, Plaintiff's counsel wrote another letter to ARMS and Norman purporting to terminate both Agreements because the time to cure the alleged breaches lapsed without Defendants taking action to remedy the breaches. Defs. SOF ¶ 30; Pl. SOF ¶ 30; Pl.'s Termination Letter [ECF No. 60-1] at 215–16. The parties dispute whether this letter effectively terminated either Agreement. Defs. SOMF ¶ 31; Pl. SOMF ¶ 31.
The parties present conflicting evidence regarding Defendants' purported breaches. Specifically, Defendants argue their obligation to use "commercially reasonable efforts" to obtain trademarks was never triggered because Plaintiff never developed a Business Plan designating the products for which Defendants should seek to obtain such trademarks. Motion at 8. In support of this proposition, Defendants rely on deposition testimony from Plaintiff's corporate designee, Norman Perrett, stating it was his understanding that Norman or ARMS were supposed to supply the Business Plan — not Plaintiff. Defs. SOMF ¶ 9 (citing Perrett Depo. [ECF No. 61-1] at 78:6–11).
Plaintiff contends it did develop a Business Plan, highlighting testimony from Michael Filon, the Chief Financial Officer of Greg Norman Company, which suggests Plaintiff had created several business plans. Pl. SOMF ¶ 9. For instance, Filon stated: "Organo Gold had a business model in 2013 that was heavily focused on coffee distribution." Filon Depo. [ECF No. 60-1] at 44:18–19. He further testified that in late 2016, early 2017, he "was involved in working with executives at Organo ... in evaluating their business plan[s] as they evolved." Id. at 44:22–25 (alterations added). He also referenced discussions he had with "the Organo team" during which they "went through business plans" that were prepared "[b]y Organo." Id. at 59:6–25, 60:20–22. Testimony from Chris Dillavou, the Chief Operating Officer of Greg Norman Company, also suggests Plaintiff discussed business plans with Defendants prior to August 2017. Dillavou Depo. [ECF No. 59-1] at 89:15–25, 90:1–2.
With regard to Plaintiff's claim that Norman and ARMS failed to adequately make themselves available to promote Plaintiff's products, Defendants' note Perrett testified that he was unaware of any request Plaintiff ever made of ARMS or Norman that they "[d]id not eventually honor." Perrett Depo. at 140:12–17 (alteration added). In contrast, Plaintiff emphasizes that Perrett also testified: "It was difficult ... to arrange times to get [Norman and ARMS] to do certain things for us, or to work with us on promoting the business. Scheduling was very difficult." Id. at 41:8–11 (alterations added). Charmane Abad, the Vice President of Marketing for Organo Gold Enterprises, Inc., similarly testified that although ARMS did not outright refuse requests to consult regarding Plaintiff's products, "there were a lot of delays to get things done," describing instances where Defendants caused delay. Abad Depo. [ECF No. 72-1] at 38:2–10; 39:1–4; 40:10–14; 41:4–18. D. Procedural History
On January 24, 2018, Plaintiff filed the instant lawsuit, alleging three claims against Defendants: declaratory relief (Count I), breach of contract (Count II), and injunctive relief (Count III) [ECF No. 1]. After the U.S. District Court for the Western District of Washington transferred the case to this Court [ECF No. 22], ABG-Shark asserted a counterclaim for breach of contract against Plaintiff [ECF No. 38]. On June 12, 2019, Defendants filed the instant Motion, seeking summary judgment on each of Plaintiff's claims and on ABG-Shark's counterclaim [ECF No. 63].
LEGAL STANDARD
Summary judgment is rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(a), (c). An issue of fact is "material" if it might affect the outcome of the case under the governing law. See Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). It is "genuine" if the evidence could lead a reasonable jury to find for the non-moving party. See id. ; see also Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). At summary judgment, the moving party has the burden of proving the absence of a genuine issue of material fact, and all factual inferences are drawn in favor of the non-moving party. See Allen v. Tyson Foods Inc. , 121 F.3d 642, 646 (11th Cir. 1997). The non-moving party's presentation of a "mere existence of a scintilla of evidence" in support of its position is insufficient to overcome summary judgment. Anderson , 477 U.S. at 252, 106 S.Ct. 2505.
If there are any factual issues, summary judgment must be denied and the case proceeds to trial. See Whelan v. Royal Caribbean Cruises Ltd. , No. 1:12-CV-22481, 2013 WL 5583970, at *2 (S.D. Fla. Aug. 14, 2013) (citing Envtl. Def. Fund v. Marsh , 651 F.2d 983, 991 (5th Cir. 1981) ). Even when the parties "agree on the basic facts, but disagree about the inferences that should be drawn from these facts[,]" summary judgment "may be inappropriate." Id. (alteration added; citation omitted).
ANALYSIS
Defendants request summary judgment on Plaintiff's declaratory relief, breach of contract, and injunctive relief claims, as well as on ABG-Shark's breach of contract counterclaim. The Court reviews each count and the counterclaim in turn.
A. Plaintiff's Declaratory Relief Claim
Defendants move for summary judgment on Count I of the Complaint, for declaratory relief, arguing it is redundant with Plaintiff's breach of contract claim and serves no useful purpose. See Motion at 5–7. The Court has "exceptionally broad discretion in deciding whether to issue a declaratory judgment." Otwell v. Ala. Power Co. , 747 F.3d 1275, 1280 (11th Cir. 2014). "If a district court, in the sound exercise of its judgment, determines after a complaint is filed that a declaratory judgment will serve no useful purpose, it cannot be incumbent upon that court to proceed to the merits before staying or dismissing the action." Wilton v. Seven Falls Co. , 515 U.S. 277, 288, 115 S.Ct. 2137, 132 L.Ed.2d 214 (1995).
The "breach of contract claims brought by both sides in this case will more effectively resolve the issues at stake" than would Plaintiff's declaratory judgment claim. Goodbys Creek, LLC v. Arch Ins. Co. , 3:07-cv-947-J-34HTS, 2009 WL 10671130, at *5 (M.D. Fla. Aug. 11, 2009). Plaintiff contends the declaratory relief claim is not duplicative because it seeks a determination that the Agreements were properly terminated, whereas the breach of contract claim seeks damages for Defendants' breaches of the Agreements. See Response [ECF No. 74] at 8. However, the Court must determine whether the Agreements were properly terminated in evaluating the breach of contract claim.
Both Agreements contain default provisions requiring notice and an opportunity to cure prior to terminating the Agreements. See Promotion Agreement ¶¶ 13.2, 13.3; License Agreement ¶¶ 13.1, 13.2. For Plaintiff to prevail on its breach of contract claim, the Court must find Plaintiff complied with these provisions. See In re Colony Square Co. , 843 F.2d 479, 481 (11th Cir. 1988) ("If a party does not comply with the requirements of the contract's default clause, it forfeits its rights under the clause ... and summary judgment is warranted if notice is not given.") (citations omitted); see also Abecassis v. Eugene M. Cummings, P.C. , No. 09-81846-CIV, 2010 WL 9452252, at *5 (S.D. Fla. June 3, 2010) ("A party may not sue for breach of contract where the party failed to comply with the requirements of the contract's default provision.").
The Agreements provide they shall be governed by and construed in accordance with Florida law. See License Agreement ¶ 19.8; Promotion Agreement ¶ 19.10.
The Court also must determine whether the Agreements were properly terminated to resolve ABG-Shark's breach of contract counterclaim. ABG-Shark asserts a counterclaim against Plaintiff for failing to make payments due under the Amended Promotion Agreement [ECF No. 38]. Plaintiff argues its performance was excused by Defendants' prior breaches. See Answer to Counterclaim [ECF No. 39] at 3. For Plaintiff to prevail in this defense, it must show it complied with the notice-and-cure requirements in the default provisions. See Fla. Recycling Servs., Inc. v. Greater Orlando Auto Auction, Inc. , 898 So. 2d 129, 131 (Fla. 5th DCA 2005) (holding Auto Auction could not terminate a contract based on Florida Recycling's prior breach because Auto Auction failed to give written notice of the breach as required by the contract); Alliance Metals, Inc., of Atlanta v. Hinely Indus., Inc. , 222 F.3d 895, 903–04 (11th Cir. 2000) (rejecting the defendant's prior breach defense because the defendant did not comply with the "notice and cure" requirements in the contract). Thus, whether Plaintiff properly terminated the Agreements will necessarily be determined by both the breach of contract claim and counterclaim, and the declaratory judgment count serves no useful purpose.
Where, as here, the declaratory judgment count would serve no useful purpose because the issues will be resolved by another claim, courts generally decline to entertain the declaratory judgment count. See, e.g., Goodbys Creek, LLC , 2009 WL 10671130, at *5 (declining to hear declaratory judgment claim because the breach of contract claims brought by both sides would "more effectively resolve the issues at stake" that the declaratory judgment action); Gendler v. Related Grp. , No. 09-21867-CIV, 2009 WL 10668980, at *4 (S.D. Fla. Sept. 14, 2009) (dismissing declaratory relief claim because it "simply restate[d] the breach of contract claim" and thus "serve[d] no useful purpose"); Martino v. City Furniture, Inc. , No. 05-61316-CIV, 2006 WL 8431397, at *4 (S.D. Fla. Nov. 8, 2006) (finding declaratory relief would serve no useful purpose where the issue to be determined by the requested declaration would be resolved by final disposition of the FDUTPA claim); Marotto v. Scottsdale Ins. Co. , 8:08-cv-1375-T-30MSS, 2008 WL 2952830, at *2 (M.D. Fla. July 30, 2008) (dismissing declaratory relief claim because the issues would be resolved by the court's consideration of the plaintiff's breach of contract count); Knights Armament Co. v. Optical Sys. Tech., Inc. , 568 F. Supp. 2d 1369, 1375 (M.D. Fla. 2008) (dismissing declaratory judgment claim because the infringement claims brought by both sides would decide the issues at stake in the claim for declaratory judgment).
Plaintiff argues these cases are distinguishable because they involve declaratory judgment claims seeking to resolve issues that would already be decided by another count. See Response at 9–10. As set forth above, the same is true here: the relief requested in the declaratory judgment count will be resolved by the parties' breach of contract claims.
Accordingly, the Court declines to exercise jurisdiction over the declaratory judgment claim and grants summary judgment in favor of Defendants on Count I.
B. Plaintiff's Breach of Contract Claim
Defendants move for summary judgment on Count II of the Complaint, for breach of contract, because they contend no genuine issue of material fact is in dispute. "For a breach of contract claim, Florida law requires the plaintiff to plead and establish: (1) the existence of a contract; (2) a material breach of that contract; and (3) damages resulting from the breach." Vega v. T-Mobile USA, Inc. , 564 F.3d 1256, 1272 (11th Cir. 2009). "Generally, whether there has been a breach of the terms of a contract is a question of fact for the factfinder." Bryka Skystocks, LLC v. Skystocks, Inc. , No. 11-CV-62135, 2013 WL 12090022, at *2 (S.D. Fla. June 11, 2013) (citation omitted); Commc'ns, Inc. v. Ernest , No. 10-CV-20019, 2011 WL 13220159, at *2 (S.D. Fla. Dec. 12, 2011).
Defendants construe Plaintiff's breach of contract claim as asserting four different breaches and argue Plaintiff cannot withstand summary judgment on any of the alleged breaches. See Motion at 7. Plaintiff disputes that there are only four alleged breaches, but submits that even if there were, genuine issues of material fact as to these breaches preclude summary judgment. See Response at 5. The Court denies summary judgment on the breach of contract claim because there are material disputes of fact as to at least two of the alleged breaches: (1) Defendants' failure to acquire certain trademarks and (2) Defendants' failure to make Norman or ARMS sufficiently available for Plaintiff's marketing needs.
1. Defendants' Alleged Failure to Acquire Trademarks
Defendants argue their obligation to use "commercially reasonable efforts" to obtain trademarks was never triggered because Plaintiff failed to create a Business Plan designating the products for which Defendants should seek to obtain such trademarks. See Motion at 7–8. Plaintiff refutes Defendants' assertion that it never developed a Business Plan, claiming Plaintiff developed multiple business plans. See Response at 6.
Genuine issues of material of fact exist as to whether Plaintiff developed a Business Plan. Defendants' argue Perrett's testimony that he thought Norman or ARMS were supposed to supply the Business Plan, rather than Plaintiff (see Perrett Depo. at 78:6–11), establishes Plaintiff never prepared a Business Plan as required by the License Agreement. Defs. SOMF ¶ 9. However, Plaintiff presents evidence from which a reasonable factfinder could infer Plaintiff did prepare a Business Plan, including Filon's testimony that he "was involved in working with executives at Organo ... in evaluating their business plan[s] as they evolved," which suggests Plaintiff had prepared multiple business plans. Filon Depo. at 44:22–25. Filon further testified about discussions he had with "the Organo team" during which they "went through business plans" that were prepared "[b]y Organo. " Id. at 59:6–25, 60:20–22 (emphasis added). Dillavou's testimony likewise supports the inference that Plaintiff discussed its business plans with Defendants prior to August 2017. Dillavou Depo. at 89:15–25, 90:1–2.
Viewing this record evidence in the light most favorable to Plaintiff, a reasonable factfinder could determine Plaintiff did prepare a Business Plan, triggering ARMS's duty to use "commercially reasonable efforts to apply for and seek registration" of trademarks. License Agreement ¶ 8.4. Defendants have not established that they used "commercially reasonable efforts" to seek such trademarks. Thus, there are genuine issues of material fact as to whether Defendants breached their obligations under the License Agreement.
2. Defendants' Alleged Failure to Make Norman or ARMS Sufficiently Available
Defendants argue there is no material dispute of fact that Norman and ARMS made themselves sufficiently available for Plaintiff's marketing needs. See Motion at 8. In support, they cite Perrett's testimony that he was unaware of any request Plaintiff ever made of ARMS or Norman that ARMS or Norman "[d]id not eventually honor[.]" Perrett Depo. at 140:12–17 (emphasis and alterations added). Plaintiff responds that Defendants breached obligations owed under the Promotion Agreement to make Norman and ARMS available even if they did not outright refuse Plaintiff's requests. Pl.'s SOMF ¶ 34.
The Court agrees with Plaintiff that outright refusal is not the only way to breach the Promotion Agreement. The Promotion Agreement sets forth how often Norman shall make himself available to Plaintiff for appearances. See Promotion Agreement ¶ 2.1. It also provides "ARMS shall use their reasonable efforts during the Contract Period to promote the business of Organo Gold in the Contract Territory." Id. ¶ 3.2 (emphasis added). This includes ARMS making "its resources, including its senior managers, available to Organo Gold for consultation as is reasonably requested." Id. ¶ 3.2(a).
Under these provisions, ARMS may breach its duty to use "reasonable efforts" to promote Plaintiff's business by causing delay, even if ARMS eventually honored all of Plaintiff's requests. Plaintiff presented evidence from which a reasonable factfinder could infer ARMS did not make "reasonable efforts" to promote Plaintiff's business. For instance, though Perrett said ARMS and Norman eventually honored Plaintiff's requests, Perrett also testified "[i]t was difficult ... to arrange times to get them to do certain things for us, or to work with us on promoting the business. Scheduling was very difficult." Perrett Depo. at 41:4–11 (alteration added). Abad likewise testified that although ARMS did not outright refuse requests to consult regarding Plaintiff's products, "there were a lot of delays to get things done," describing instances where Defendants caused delay. Abad Depo. at 38:2–25; 39:1–4; 40:10–14; 41:4–18.
The record evidence, viewed in the light most favorable to Plaintiff, thus presents genuine issues of material fact as to whether Defendants breached their obligations to make Norman or ARMS available under the Promotion Agreement. Therefore, Defendants' Motion as to Count II, breach of contract, is denied.
Because these disputes of fact preclude the entry of summary judgment on this count, the Court need not address the other alleged breaches of the Agreements.
C. Plaintiff's Injunctive Relief Claim
Defendants move for summary judgment on Count III of the Complaint, for injunctive relief, arguing injunctive relief is not an independent cause of action. See Motion at 11. The Court agrees injunctive relief cannot be pled as an independent claim for relief.
The Eleventh Circuit has made clear that "any motion or suit for either a preliminary or permanent injunction must be based upon a cause of action.... There is no such thing as a suit for a traditional injunction in the abstract. For a traditional injunction to be even theoretically available, a plaintiff must be able to articulate a basis for relief that would withstand scrutiny under Fed. R. Civ. P. 12(b)(6) (failure to state a claim)." Alabama v. U.S. Army Corps of Engineers , 424 F.3d 1117, 1127 (11th Cir. 2005) (citation and internal quotation marks omitted); see also Blue Water Innovations, LLC v. Fettig , 18-60671-CIV, 2019 WL 1904589, at *2 (S.D. Fla. Mar. 8, 2019) (dismissing claim for injunctive relief with prejudice because injunctive relief is not an independent cause of action).
None of the cases cited by Plaintiff address whether pleading injunctive relief as an independent cause of action is proper. See Macrotrend Capital Grp. Inc. v. Edwards , 18-cv-61327, 2019 WL 2106421, at *1 (S.D. Fla. Mar. 4, 2019) (evaluating personal jurisdiction); Charles Schwab & Co., Inc. v. McMurry , 208-CV-534-FTM-29SPC, 2008 WL 5381922, at *1 (M.D. Fla. Dec. 23, 2008) (analyzing motion for injunctive relief); VAS Aero Servs., LLC v. Arroyo , 860 F. Supp. 2d 1349, 1351 (S.D. Fla. 2012) (same); Merrill Lynch, Pierce, Fenner, & Smith Inc. v. Kurgis , 2:08-cv-777-FTM-99DNF, 2008 WL 4710919, at *1 (M.D. Fla. Oct. 23, 2008) (same). Thus, Plaintiff's cases do not persuade the Court that Plaintiff may proceed on an independent claim for injunctive relief.
Accordingly, the Court grants summary judgment in favor of Defendants on Count III of the Complaint. However, this does not preclude Plaintiff from seeking injunctive relief as a remedy for its breach of contract claim.
The Complaint's prayer for relief seeks injunctive relief as a remedy for all counts. See Complaint [ECF No. 1] at 10. Defendants assert Plaintiff is not entitled to injunctive relief on its breach of contract claim because an adequate remedy (money damages) is available at law. See Motion at 11–12. However, Plaintiff pleads breaches of contract that, if successful, could warrant injunctive relief, including the disclosure of confidential information. See Complaint ¶¶ 30(d), 31(g); Pharmerica, Inc. v. Arledge , 8:07-cv-486-26MAP, 2007 WL 865510, at *5 (M.D. Fla. Mar. 21, 2007) (granting motion for temporary restraining order/preliminary injunction based in part on likelihood of success on breach of nondisclosure agreement claim). Thus, should Plaintiff prevail on its breach of contract claim, it may seek injunctive relief as a remedy.
D. ABG-Shark's Breach of Contract Counterclaim
Defendants also move for summary judgment on ABG-Shark's breach-of-contract counterclaim, arguing Plaintiff's failure to make payments due on August 1, 2017 or thereafter constitutes a clear breach of the Amended Promotion Agreement. See Motion at 12. Thus, Defendants claim they are entitled to summary judgment for the balance of payments due and outstanding under the Amended Promotion Agreement, in the amount of $4,521,316. See id.
Plaintiff disagrees, arguing there are genuine issues of material fact as to whether ABG-Shark has standing to bring this claim. See Response at 4–5. Plaintiff asserts even if ABG-Shark does have standing, genuine issues of material fact exist as to whether Defendants' prior breaches excuse Plaintiff's failure to make payments. See id. The Court first addresses whether ABG-Shark has standing, then evaluates whether there are genuine disputes of material fact as to Plaintiff's defense of prior breach.
First, ABG-Shark has standing to assert the breach-of-contract counterclaim against Plaintiff as an assignee of the monetary benefits of the Amended Promotion Agreement. See Sierra Equity Grp., Inc. v. White Oak Equity Partners, LLC , 650 F. Supp. 2d 1213, 1227 (S.D. Fla. 2009) ("Following an assignment, the assignee stands in the shoes of the assignor" and may sue to enforce the assigned rights) (citations and internal quotation marks omitted).
Defendants rely on MSPA Claims 1, LLC v. Tenet Florida, Inc. , 918 F.3d 1312 (11th Cir. 2019) and Nationwide Mutual Company v. Ft. Myers Total Rehab Center, Inc. , 657 F. Supp. 2d 1279 (M.D. Fla. 2009), to support the general premise that an assignee can enforce payments under an assigned contract. Motion at 12. Plaintiff argues Defendants' reliance on these cases is misplaced because they do not involve an assignment of solely monetary benefits, whereas here, according to Defendants, only monetary benefits were assigned. Response at 4.
The Court finds that even if only monetary benefits were assigned to ABG-Shark, it would still have standing to bring the counterclaim. The basis for the breach of contract counterclaim is that Plaintiff failed to pay amounts due under the Amended Promotion Agreement. See Counterclaim [ECF No. 38] at 8, ¶ 12. It is undisputed that, at the very least, ABG-Shark acquired the right to payments under the Amended Promotion Agreement. Defs. SOMF ¶ 21; Pl. SOMF ¶ 21. Plaintiff does not cite any authority to support its position that the assignment of monetary benefits is insufficient to confer standing to enforce the right to payments, nor is the Court aware of any. Thus, ABG-Shark may sue to enforce its right to payments. See, e.g., Conn. State Dental Ass'n v. Anthem Health Plans, Inc. , 591 F.3d 1337, 1352 (11th Cir. 2009) (explaining "that assignment of the right to payment is enough to create standing" for an assignee to sue for payment of benefits under ERISA); A& M Gerber Chiropractic LLC v. Geico Gen. Ins. Co. , No. 16-cv-62610, 2017 WL 850177, at *3 (S.D. Fla. Mar. 3, 2017) (finding plaintiff had standing to sue insurance company for paying incorrect amount under policy where the plaintiff had been assigned the benefits under the policy).
Though Plaintiff disputes that only monetary benefits were assigned, Plaintiff agrees that at least the monetary benefits of the Amended Promotion Agreement were assigned to ABG-Shark. See Pl. SOMF ¶ 21. Indeed, after the assignment, Plaintiff made six payments directly to ABG-Shark before it ceased making payments. Defs. SOMF ¶ 23; Pl. SOMF ¶ 23. Plaintiff does not challenge the validity of the assignment of monetary benefits to ABG-Shark because the assignment of monetary benefits is expressly permitted under the Amended Promotion Agreement. See Promotion Agreement ¶ 19.6.
Second, material questions of fact exist over whether Defendants' prior breaches excused Plaintiff's performance under the Amended Promotion Agreement. Generally, whether there is a legitimate defense that excuses a breach of a contract is a question of fact. Bryka Skystocks , 2013 WL 12090022, at *2 (citation omitted; alteration added); Ernest , 2011 WL 13220159, at *2. "It is a fundamental principle of Florida contract law that a material breach by one party excuses the performance by the other." Hamilton v. Suntrust Mortg., Inc. , 6 F. Supp. 3d 1300, 1309 (S.D. Fla. 2014) (citations omitted).
Here, as discussed above, there are questions of fact as to whether ARMS breached its duty to use "reasonable efforts" to acquire certain trademarks and to promote Plaintiff's business. See supra at Part B. Plaintiff contends — and Defendants dispute — that it gave Defendants notice of these breaches on October 4, 2017 and terminated the Agreements on November 7, 2017, in accordance with the default provisions in the Agreements. Defs. SOMF ¶¶ 28, 30–31; Pl. SOMF ¶¶ 28, 30–31. Viewing the evidence in the light most favorable to Plaintiff, a reasonable factfinder could determine Plaintiff properly terminated both Agreements on November 7, 2017 after Defendants' material breaches and were not liable for payments thereafter. Accordingly, questions of fact preclude entry of summary judgment on ABG-Shark's breach of contract counterclaim.
Even if the factfinder is persuaded that Plaintiff properly terminated both Agreements on November 7, 2017 after Defendants' prior breaches, Plaintiff would still be liable for payments owed that were due prior to that date. See Alliance Metals, Inc. , 222 F.3d at 903–04 (explaining a party must comply with "notice and cure" provision in contract before ceasing performance based on prior breach); Fla. Recycling Servs., Inc. , 898 So. 2d at 131. The Court denies summary judgment on ABG-Shark's counterclaim because there are disputes of fact as to whether Plaintiff is liable for payments due after November 7, 2017.
CONCLUSION
For the foregoing reasons, it is
ORDERED AND ADJUDGED that Defendants' Motion for Summary Judgment [ECF No. 63] is GRANTED IN PART AND DENIED IN PART . The Motion is granted as to Count I, for declaratory relief, and Count III, for injunctive relief. The Motion is denied as to Count II, for breach of contract, and ABG-Shark's counterclaim for breach of contract.
DONE AND ORDERED in Fort Lauderdale, Florida, this 6th day of September, 2019.