Nautica Intern., Inc. v. Intermarine Usa, L.P.

• Decision Date: 17 March 1998
• Docket Number: No. 97-1772-CIV.,97-1772-CIV.
• Citation: 5 F.Supp.2d 1333
• Parties: NAUTICA INTERNATIONAL, INC., Plaintiff, v. INTERMARINE USA, L.P., Defendant.
• Court: U.S. District Court — Southern District of Florida

5 F.Supp.2d 1333

NAUTICA INTERNATIONAL, INC., Plaintiff, v. INTERMARINE USA, L.P., Defendant.

No. 97-1772-CIV.

United States District Court, S.D. Florida.

March 17, 1998.

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Richard Stanton, Miami, FL, Christopher Wawack, Joseph Camardo, Auburn, NY, for Plaintiff.

C. Torrence Armstrong, McGuire, Woods, Battle & Boothe, LLP, McClean, VA, Isaac Mitrani, Mitrani, Rynor & Adamsky, P.A., Miami, FL, Matthew Simchack, Paul Khoury Robert E. Johnston, Washington, DC, for Defendant.

ORDER GRANTING IN PART DEFENDANT'S MOTION TO DISMISS: VACATING ORDER STAYING DISCOVERY

GOLD, District Judge.

THIS CAUSE came before the Court upon defendant Intermarine USA, L.P.'s ("IUSA") Motion to Dismiss, plaintiff Nautica International, Inc.'s ("Nautica") Memorandum of Law in Opposition to Defendant's Motion to Dismiss, and IUSA's Reply to Plaintiff's Memorandum of Law in Opposition to Defendant's Motion to Dismiss. Plaintiff petitions the Court in an eleven count, 166 paragraph complaint for damages, costs and attorneys' fees as provided by law for IUSA's breach of contract in the design and production of a prototype boat, in response to a solicitation by the United States Special Operations Command ("SOCOM"). Defendant seeks dismissal of this Cause pursuant to Fed. R.Civ.P. Rule 12(b)(6), for failure to state of a cause of action. After careful consideration of parties' arguments, the relevant case law and the record as a whole, the Court concludes that defendant's motion to dismiss should be granted in part and denied in part.

I. Findings of Fact and Procedural Background

The following facts are gleaned from plaintiff's original complaint and are deemed to be true for purposes of this motion. In October 1995, SOCOM published a Request for Proposals to develop and produce a Rigid Hull Inflatible Boat ("RIB") for use by the United States Special Operations Units. SOCOM intended to make multiple awards to contractors to design and produce a prototype or Test Article from which SOCOM would choose one contractor to manufacture the production lots.

Nautica had significant experience in the production of RIBs, having manufactured these boats for more than 10 years. Nautica, however, lacked the financial resources to respond to this RFP. Accordingly, Nautica agreed to cooperate with IMUSA to submit a joint proposal to SOCOM. Nautica was to contribute its expertise in producing RIBS and its Parent Craft,¹ and IMUSA was to contribute its financial resources and expertise in contracting with the federal government. The parties agreed to formalize the agreement in writing at a later date.

From July through November, 1995, Nautica invested over $600,000 in preparing the Parent Craft for testing. On or about December 1, 1995, Nautica and IMUSA entered into a written agreement entitled "Solicitation # USZA22-96-R-0003, Agreement for Proposal and Subsequent Production of 10 Meter Rigid Inflatable Boat (RIB)" ("Agreement"), which outlined the parties' roles in the event that SOCOM awarded the parties a Test Article, and further awarded them production lots. The Agreement provided, inter alia, that, 1) Nautica would provide IMUSA its design for the Parent Craft, 2) IMUSA would pay Nautica $20,000 royalty for each boat sold using Nautica's design, 3) Nautica would provide technical assistance and consultation at a reasonable cost for IMUSA's initial production, 4) Nautica would complete the Parent Craft at its own cost, 5) upon award of the SOCOM Test Article, Nautica would provide the Prototype Boat and IMUSA would contribute certain other accessories, and 6) the parties would work together exclusively for the duration of the SOCOM contract.

In early 1996, IMUSA submitted the proposal to SOCOM in its own name, identifying Nautica as its "teaming partner." On June 14, 1996, SOCOM awarded the Test Article to IMUSA at a price not to exceed $1,304,426. SOCOM awarded two other Test Article contracts, one to United States Marine, Inc., at a price not to exceed $852,338 and a second to Willard Marine, Inc., at a price not to exceed $965,454.

In late June 1996, Nautica and IMUSA began to negotiate the details of the scope of work to be performed by Nautica in production of the Test Article as anticipated by the December 1, 1995 Agreement. On July 2 1996, the parties entered into a second written agreement ("Memorandum Agreement"), in which the parties agreed as follows:

Should SOCOM award the production contract to Intermarine/Nautica, Intermarine will pay Nautica $300,000, and will have the rights to use the Nautica design and data for the production of that model, or any variation of it, based upon the same lines plan, on a non-competitive basis with Nautica.

Intermarine will pay Nautica $20,000 for each boat built under the construction contract with SOCOM and 5% for any boat sold to any other customer that Nautica would provide. If a Finder's fee needs to be paid, Nautica will inform Intermarine accordingly, prior to stipulating the sale contract.

Any advertisement done either by Nautica or Intermarine, will refer to SOCOM RIB as Nautica-Intermarine design or Inter-Nautica design.

If the boat is built by Nautica, Nautica will pay a royalty to Intermarine of the same amount indicated above. The agreement will expire five (5) years after its commencement and may be renegotiated after that time.

(Complaint, Ex. 3). The Memorandum Agreement is signed by both parties and dated July 2, 1996.

On July 23, 1996, IMUSA issued a Purchase Order to Nautica in the aggregate amount of $445,500. IMUSA confirmed in the Purchase Order that it had control over the materials to be used in the lamination process and further that it would supervise this process, giving IMUSA ultimate responsibility for the weight of the Test Article hull and deck.²

In a letter dated August 6, 1996, from IMUSA to SOCOM, IMUSA allegedly misrepresented that Nautica had demanded an additional $200,000 for the work in progress on the Test Article. Nautica contends that IMUSA made this request in an intentional attempt to defraud SOCOM and to damage Nautica's business reputation. After inquiry by SOCOM, IMUSA declined to pursue the requested additional funds.

IMUSA and Nautica's business relationship continued to unravel. Nautica had significant disagreements with IMUSA regarding various design issues, including the construction of radar arch, the size of the "service box," and the weight of the materials used by IMUSA and its subcontractors. Nautica also became increasingly concerned that the parties had not consummated a final contract, as contemplated by the December 1, 1995 Agreement, and that IMUSA had continued to exclude Nautica from design and production decisions of considerable importance. Nautica expressed these concerns to IMUSA in letters dated September 17, 24, 25 and 26, 1996.

On October 5, 1996, Nautica completed its portion of the production effort and shipped the hull and deck to IMUSA for acceptance. Nautica again voiced its dissatisfaction with IMUSA's work, emphasizing the excessive weight of various materials used to build the Test Article.³ IMUSA ignored Nautica's objections. On October 30, 1996, Nautica's legal counsel sent a letter to IMUSA accusing IMUSA of failing to use its best efforts to procure the SOCOM contract, by staffing the project with inexperienced personnel, and failing to utilize Nautica's significant expertise. Nautica sought assurances from IMUSA that it was pursuing the SOCOM production contract with due diligence. IMUSA never responded.⁴

On October 31, 1996, Nautica submitted a draft contract to IMUSA to memorialize the parties' agreements, setting out their respective roles for the remainder of the SOCOM contract and during production, if necessary. IMUSA refused to negotiate the contract. IMUSA also allegedly caused to be published an advertisement of the RIB on the Internet, referring to the boat as "Intermarine USA NSW RIB AT."

On or about December 2, 1996, IMUSA shipped the Test Article to SOCOM. Because the Light Load Displacement weight exceeded the 14,000 pound limit by 1,488 pounds, IMUSA attached an explanation for the excess weight, suggesting ways that the weight could be reduced. According to Nautica, IMUSA falsely blamed Nautica for exceeding the weight threshold, concluding that excessive resin content in the lamination process of the hull and deck was the prime reason for the overweight. Nautica claims that IMUSA was responsible for 2408 pounds of extra unnecessary weight.⁵ Using Nautica's recommendations, IMUSA suggested to SOCOM that the SOCOM RIB could be brought into compliance.

On December 5, 1996, SOCOM declined to waive the weight requirement, issued a stop work order for the SOCOM RIB, and eliminated IMUSA from further competition for the production contracts. In a letter dated December 6, 1996, Nautica urged IMUSA to file a timely protest with the General Accounting Office to preserve the parties' rights. By letter dated December 6, 1996, IMUSA requested a debriefing from SOCOM pursuant to federal regulation, and in a letter dated December 12, 1996, IMUSA again suggested that Nautica had caused the weight problem, resulting from the high resin content of hull. Nautica contends that these statements were made in an attempt to damage its reputation. Nautica further asserts that IMUSA failed to obtain the requisite waiver for the excessive weight and further failed to submit a Contract Problem Identification, as provided by the SOCOM contract.

On or about December 17, 1996, IMUSA filed a bid protest with the General Accounting Office. Despite repeated requests for the GAO's report, IMUSA refused to provide a copy to Nautica. Nautica contends that IMUSA refused because IMUSA filed an untimely protest, destroying the parties' opportunity to rejoin the competition for the award of the production lots.

Nautica originally brought suit in the Circuit...