Entm't USA, Inc. v. Moorehead Commc'ns, Inc.

Decision Date20 March 2015
Docket NumberNo. 1:12–CV–116.,1:12–CV–116.
Citation93 F.Supp.3d 915
CourtU.S. District Court — Northern District of Indiana

Jason M. Kuchmay, Carson Boxberger LLP, Fort Wayne, IN, for Plaintiff.

Karen T. Moses, Kevin J. Mitchell, Steven L. Jackson, Faegre Baker Daniels LLP, Fort Wayne, IN, for Defendant.


RUDY LOZANO, District Judge.

This matter is before the Court on the: (1) Motion for Summary Judgment filed by Plaintiff Entertainment USA, Inc., on August 18, 2014 (DE# 86); (2) Motion for Partial Summary Judgment filed by Defendant Moorehead Communications, Inc., on August 18, 2014 (DE# 90); (3) Motion to File Exhibits in Opposition to Summary Judgment Under Seal filed by Defendant on September 15, 2014 (DE# 97); and (4) Motion to Strike filed by Defendant on September 29, 2014 (DE# 99). For the reasons set forth below, Plaintiff's Motion for Summary Judgment (DE# 86) is DENIED, Defendant's Motion for Partial Summary Judgment (DE# 90) is GRANTED IN PART AND DENIED IN PART, Defendant's Motion to File Exhibits in Opposition to Summary Judgment Under Seal (DE# 97) is GRANTED, and Defendant's Motion to Strike (DE# 99) is DENIED AS MOOT.


For the purposes of the parties' motions for summary judgment, the facts below are material and undisputed:

Plaintiff Entertainment USA, Inc. is one of several companies doing business as One Wireless World (“OWW”). OWW was a multi-carrier for wireless services including AT & T, Nextel, Sprint, and T–Mobile, until the spring of 2006, when OWW began working exclusively with Sprint. OWW served the central Pennsylvania area, and had a significant presence in that area at that time. Chau Nguyen (“Chau”) was CEO of each of the companies doing business as OWW. Chau and his brother, Chinh Nguyen (“Chinh”), co-owned these companies until Chinh sold his interest to Chau in January 2007.

Defendant Moorehead Communications, Inc., (Moorehead) is a master agent for Verizon Wireless (“Verizon”), which signs up individuals and entities to sell Verizon cellular phone services as a sub-agent or sub-dealer of Moorehead. Originally located in Indiana, Moorehead has expanded to numerous states throughout the country. Moorehead began expanding into the central Pennsylvania area in the early 2000s. By 2005, Moorehead had signed up two sub-dealers by the names of “Kimmel's 1–Stop” and “Quick Cell Phone.”

In an effort to expand Moorehead's presence in central Pennsylvania, Moorehead entered into an agreement with OWW for referral fees (“Referral Agreement”) in January 2006. The two-page Referral Agreement states in large part:

OWW Referral Fee

The proposed referral fee is designed to compensate OWW for location handoffs and offset loss incurred from adding another carrier to their Branded Store's existing lineup. This will also include any locations, other than the current list of Branded stores that are approved through Verizon and signed up under Moorehead Communications in the future that are referred directly to us by the OWW group.1
Moorehead is proposing the following:
For all handoffs/referrals from OWW, dating back to Jan. 1, 2006 and any locations that are approved following that date as a direct result of an OWW referral, we will pay a referral bonus in the amount described below.
Monthly Activations for the referred group
* * * 20$ per activation (New Activations Only) to assist with ramp up period which will remain in effect 6 months from the date this agreement is signed by both parties. After which, referral bonus will be adjusted to the appropriate tier. (See Below)
50–150 per month—10$ referral bonus per activation2
151–250 per month—15$ referral bonus per activation
251–350 per month—20$ referral bonus per activation
351–450 per month—25$ referral bonus per activation
451–500 per month—30$ referral bonus per activation
501 per month and higher—35$ referral bonus per activation
*There will be a flat fee of 10$ per 2 year upgrade in addition to the items listed above.
*There is a 180 day chargeback period in which commissions can be revoked. If we chargeback any of the referred locations for a deactivation by one of their customers, OWW will also be charged back the referral bonus for that activation.
Any representation required for Verizon in these locations, will be conducted entirely by Moorehead Communications and will not be affiliated with the OWW group in any way. These locations will be approved on a case by case basis by Verizon and will be designated a sub agent of Moorehead Communications Inc.
All support, training, merchandising, collateral and commission payout to these approved locations, will be supplied by Moorehead Communications, and will not be filtered through OWW in any way.
List of Referred locations as of Jan. 9th, 2006 (Pending Approval)
[Table of ten rows, each row identifying a store name, an individual's name, and a street address, among other information. For example, John Forsyth–Etown Branded ... John Forsyth ... 32 N Market Street.” The table also includes street addresses for “Quick Cellular” and “Kimmel's 1 Stop.”]
Street Kicks—Tony Baaklini—Harrisburg, PA
Signage Change—
Moorehead will help with Signage build-out in select locations, and will help to finance 50% of the build-out. This will however, be approved on a case by case basis and will require a minimum of activations per month, per location. This is will be coordinated with the independent owner/operator and will not be filtered in any way through OWW corporate.

(DE# 95–1 at 2–3.) Larry Myers (“Myers”), Moorehead's Vice President of the Dealer Division at the time, drafted the Referral Agreement. Chau negotiated the Referral Agreement on behalf of OWW.

In December 2006, Moorehead employee Erik Schlesselman (“Schlesselman”) communicated with OWW employee Jason Annibali via email regarding a list of specific OWW locations referred to Moorehead by OWW (Annibali Email). (DE # 88–2 at 26–42.) At some point, OWW also provided Schlesselman with a list of dealer locations that OWW was terminating because those dealers did not want to sell exclusively for Sprint and OWW (“Term List”). (DE# 89–3 at 20–22, DE# 87 at 48–49.) Chau testified that he referred individuals to Moorehead during several meetings with Schlesselman by displaying lists of individuals' names on projection screens and computer monitors. (DE# 89–3 at 30.) He also testified that he shared OWW's dealers and their credit terms with Schlesselman. (Id. ) Chinh testified that OWW gave Moorehead access to its vice-presidents, the names of all of its people, and its business model. (DE# 89–4 at 20.)

In 2007, Chau purchased Chinh's interests in the OWW companies, and formed a new company named “OWW Consulting, Inc. In mid–2007, OWW Consulting hired one of Chinh's companies, “ChinhCo Incorporated,” to perform consulting services. According to the Consulting Services Agreement, ChinhCo's services were (1) personnel management, (2) management of certain sub-agent relationships, and (3) leasing. (DE# 95–7 at 11.) OWW claims that it paid ChinhCo for consulting services in 2007, but provides no proof of payment.

By January 2008, OWW's relationship with Sprint had terminated. Chau created a new entity, “United Consulting,” and Chinh operated his own company named “Wireless Advisors, Inc. Neither United Consulting nor Wireless Advisors is an OWW company.

In January 2008, the OWW Consulting's Vice President of Operations emailed a location to Moorehead, and Chinh provided Moorehead with a spreadsheet of OWW locations. In February 2008, Chau proposed a new referral agreement with Moorehead and United Consulting, which included, among other things, referring “quality exclusive agents” to Moorehead. No agreement was reached.

OWW asserts that it referred locations, individuals, and entities to Moorehead in the Referral Agreement, the Annibali email, the Term List, and/or in verbal communications with Moorehead. Some of these individuals include:

1. John Forsyth (“Forsyth”). Forsyth was subagent for OWW, and his “Etown” location at 32 N. Market Street is identified in the Referral Agreement. (DE # 95–1 at 3.) Forsyth eventually closed his Etown store and moved to a larger location at 1575 South Market. Forsyth had more than ten locations that were approved by Verizon and signed up under Moorehead.
2. Mike Kapp (“Kapp”). Kapp joined OWW in 2006 or early 2007, after working for T–Mobile for several years. Kapp managed OWW-owned stores in western central Pennsylvania for approximately one year. Kapp left OWW and pursued a venture called Mobile Pros with Chinh, which involved selling for T–Mobile. Chinh suggested that Kapp join Moorehead during a meeting with Moorehead employees. (DE# 89–7 at 9.) Kapp left Mobile Pros in July 2007 to begin working with Moorehead as an account manager. Kapp was promoted twice, and is now Vice President of Moorehead's Northeast and South regions of its Dealer Division. Multiple regional managers report to Kapp in this role.
3. Mike Trimble (“Trimble”). Chau testified that, during a couple of meetings in 2006 and 2007, he told Schlesselman that Moorehead might want to hire Trimble, who was working for OWW at the time. (DE# 89–3 at 24–26.) Trimble worked for OWW until January 2008. He then worked for Mobile Pros for over a year before joining Moorehead. In 2010, Moorehead began establishing locations in H.H. Gregg stores. Trimble became Vice President of Moorehead's H.H. Gregg Division, and, as of 2013, oversaw more than 220 locations in the H.H. Gregg Division in almost 20 states.
4. Jordan Golob (“Golob”). Golob had four locations that were approved by Verizon and were signed up under Moorehead. Because both Forsyth and Chinh claimed to have referred Golob to Moorehead, Moorehead entered into an agreement with Forsyth and Chinh in 2008 to split a referral fee for a one-year period.

Between 2006 and mid–2008, Moorehead paid OWW referral fees totaling approximately...

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