Future Tech Intern., Inc. v. Tae Il Media, Ltd.

• Decision Date: 18 July 1996
• Docket Number: No. 95-2512-CIV.,95-2512-CIV.
• Citation: 944 F.Supp. 1538
• Parties: FUTURE TECH INTERNATIONAL, INC., a Florida corporation, Plaintiff, v. TAE IL MEDIA, LTD., Tae IL U.S.A., Inc., Tech Media Computer Systems, Inc., Otomation Engineering, Inc. and Andrew Park, individually, Defendants.
• Court: U.S. District Court — Southern District of Florida

944 F.Supp. 1538

FUTURE TECH INTERNATIONAL, INC., a Florida corporation, Plaintiff, v. TAE IL MEDIA, LTD., Tae IL U.S.A., Inc., Tech Media Computer Systems, Inc., Otomation Engineering, Inc. and Andrew Park, individually, Defendants.

No. 95-2512-CIV.

United States District Court, S.D. Florida.

July 18, 1996.

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Andrew C. Hall, Miami, FL, for Plaintiff.

Brian S. Dervishi, Ft. Lauderdale, FL, Thomas M. Karr, Steel Hector & Davis, Miami, FL, for Defendants.

ORDER

MARCUS, District Judge.

THIS CAUSE comes before the Court upon the following motions: (1) Defendant Tae Il Media's Emergency Motion for Pre-Judgment Replevin, Attachment and/or Preliminary Injunction and Order to Show Cause, filed December 5, 1995; (2) Defendants Tae Il USA, Techmedia and Otomation's Rule 12(b)(6) Motion to Dismiss Plaintiff's Complaint, filed January 16, 1996; (3) Defendants Tae Il USA, Techmedia, Otomation and Park's Rule 56 Motion for Summary Judgment Dismissing Plaintiff's Complaint, filed January 16, 1996; (4) Defendant Park's Rule 12(b)(6) Motion to Dismiss Complaint, filed January 16, 1996; and (5) Defendants Tae Il USA, Techmedia, Otomation and Park's Rule 12(b)(2) Motion to Dismiss for Lack of Personal Jurisdiction, filed January 16, 1996.

After a thorough review of the record and pleadings, and having considered the argument of counsel, Defendant Tae Il Media's emergency motion for pre-judgment replevin, attachment and/or preliminary injunction and order to show cause must be and is DENIED. Defendants Tae Il USA, Techmedia and Otomation's motion to dismiss for lack of personal jurisdiction is GRANTED as to Defendant Tae Il USA, and the Plaintiff's complaint is DISMISSED as to this Defendant. The motion is DENIED as to the other Defendants. Defendants Tae Il USA, Techmedia and Otomation Rule 12(b)(6) motion to dismiss, Tae Il USA, Techmedia, Otomation and Park's Rule 56 motion for summary judgment and Park's motion to dismiss are all GRANTED IN PART and DENIED IN PART. The Plaintiff's breach of contract claims in Counts I, III, IV and IX are DISMISSED to the extent that they concern these Defendants. In all other respects, the motions to dismiss and motions for summary judgment are DENIED.

I.

Plaintiff Future Tech International, Inc. filed this diversity action on November 13, 1995 against Defendants Tae Il Media, Ltd., Tae Il USA, Inc., Tech Media Computer Systems, Inc. ("Techmedia"), Otomation Engineering, Inc. and Andrew Park. Future Tech, a buyer/distributor of computer equipment, alleges among other things that the Defendants, manufacturers of computer equipment, have engaged in conduct designed to usurp its Latin American distribution network. The complaint alleges breach of contract (Count I), fraud in the inducement (Count II), breach of purchase orders by failing to deliver product and late deliveries (Count III), breach of contract and warranty (Count IV), tortious interference with business relationships (Count V), theft of trade secret (Count VI), breach of fiduciary duty (Count VII), bad checks (Count VIII), breach of contract (Count IX) and trade dress infringement (Count X). As relief, Future Tech seeks $100,000,000.00 in compensatory damages and an additional $100,000,000.00 in punitive damages, plus costs and interest.

The allegations in the complaint can be summarized as follows. Future Tech was established in 1988, and thereafter entered the Latin American market as a distributor of Samsung monitors and other computer products. In 1993, Future Tech determined that brand loyalty was important, and that it would offer its own brand of computer products in order to strengthen market share. In view of previous problems regarding Samsung, which allegedly interfered with Future Tech's distribution channel by attempting to sell its products directly to customers in Latin America, Future Tech insisted that companies manufacturing products for its new brand (MarkVision) promise not to interfere with its network of customers.

In the summer of 1994, according to the Plaintiff, it agreed with Defendant Tae Il Media, Ltd. that Tae Il Media would be the sole manufacturer of monitors and computer systems for its MarkVision brand. Tae Il Media also committed to maintain a $5 million dollar line of credit. Future Tech now asserts that the Defendants (all of whom are associated with Tae Il Media, Ltd.) "never intended to live up to any contract or promise [and instead] intended to put a strangle hold on [Future Tech] and [its] plan to build the MarkVision name by aggressively developing branded loyalty to Defendants' own brand, Tech Media." Id. at ¶ 28. Plaintiff insists that the Defendants (1) withheld products and falsely promised a catch-up schedule; (2) took orders knowing they could not deliver the products; (3) provided Tech Media branded products for MarkVision products; (4) solicited Future Tech's customers; (5) delayed the delivery of MarkVision products, creating a need on the part of Future Tech customers and facilitating their secret competition with the Plaintiff; and (6) used Future Tech's "motherboards, cases, and bezels" in their own systems, creating customer confusion. Id. Plaintiff also alleges that it agreed with Defendants as early as June, 1994 that, in order to avoid customer confusion, no other monitors or systems produced by Tae Il Media would be distributed in Latin America, and Future Tech would be given certain trade appearance and price protections.

More specifically, Future Tech maintains that untimely shipments emerged as a problem from the very outset of the parties' relationship, with the first shipping delay announced in writing by the Defendants on July 14, 1994. Plaintiff adds that problems relating to exclusivity began by late November, 1994. A meeting was held in Korea in December, 1994, after which Future Tech allegedly received new assurances relating to exclusivity and price protection. In January and February, 1995, Plaintiff says that the Defendants provided additional assurances to address continuing problems regarding exclusivity and price protection. During this time, the Defendants represented to Future Tech that its products would have the lowest prices in South America, and also assured Plaintiff that they were "not interested in interfering in the South American market.... In no circumstances will Tech Media knowingly sell our products for direct sales to the South American Market." Id. at ¶ 52.

Further problems relating to price protection and delays in filling orders took place between February and July of 1995, although additional promises and assurances were made during this time. At one point in March, 1995, Future Tech felt compelled to re-label and re-box products of Defendant Techmedia in order to alleviate delays in the delivery of its Mark Vision products. In July, 1995, the parties reached still another agreement addressing issues of price and exclusivity. Nevertheless, Plaintiff submits that it learned that Tae Il Media was breaching the agreement "literally as the ink was drying," and that Tae Il Media "never had any intent to perform." Id. at ¶ 79. In particular, Future Tech alleges that it learned Tae Il Media "had sent several containers of its products direct[ly] into South America, promoting its brand over that of Plaintiff, including motherboards and bezels, while withholding shipments of MarkVision branded products. [Tae Il Media] sold their products using Future Tech International's motherboard and case bezels to pawn those `covered over' motherboards and pawning off specifically designed products owned by Future Tech International as its own." Id. Plaintiff alleges that Defendants' secret sales in Latin America enabled them, as of October, 1995, to sever their relationship with Future Tech, and permitted Tae Il Media to repudiate its contracts with the Plaintiff in favor of establishing its own Techmedia distribution channel in Latin America.

Tae Il Media responded to Future Tech's complaint by filing an answer and counterclaim.¹ Tae Il Media takes the position that the Court does not have personal jurisdiction over it. It adds, however, that to the extent that this Court exercises personal jurisdiction, then Tae Il Media must seek relief of its own against Future Tech. Answer of Def. Tae Il Media, at ¶ 34. Tae Il Media says that since approximately 1983, it has been in the business of manufacturing and distributing computer equipment under the Techmedia name, and that it also operates as an original equipment manufacturer ("OEM"), making products to specification for buyers. Tae Il Media says that it has developed its Techmedia brand to be distinct from the unbranded OEM product that it sells to buyers like Future Tech. According to Tae Il Media, it began delivering OEM equipment to Future Tech in May, 1994, but thereafter Future Tech "regularly made belated and partial payments on the Tae Il Media invoices." Id. at ¶ 48. This Defendant further alleges that Future Tech sold Tae Il Media's Techmedia equipment by removing the trademark without its permission and mislabeling the same as "MarkVision." Id. at ¶ 49. Tae Il Media says that the relabeling of the product was a false representation which had a misleading and deceptive effect on customers. In addition, Tae Il Media says that Future Tech failed to make payments and is now past due on its invoices. The counterclaim alleges breach of contract (count I), action for price (Count II), action for replevin (count III), action for attachment (Count IV), and federal statutory unfair competition (Count V), and seeks damages based on over $16,000,000 of equipment allegedly manufactured and sold to Future Tech.

The parties appeared before this Court for a status conferences on April 29, 1996, at which time the Court took argument on the various pending motions.

II.

Defendant Tae Il Media has moved for pre-judgment...