XIP Techs., LLC v. Ascend Global Servs., LLC
Decision Date | 15 August 2018 |
Docket Number | Case No. 2D17-3718 |
Citation | 253 So.3d 1183 |
Parties | XIP TECHNOLOGIES, LLC, Appellant, v. ASCEND GLOBAL SERVICES, LLC, Appellee. |
Court | Florida District Court of Appeals |
John C. Webb of John Webb Legal Group, P.L., Fort Myers, for Appellant.
Louis D. D'Agostino of Cheffy Passidomo, P.A., Naples; and Richard Cimino of Richard D. Cimino, P.A., Naples, for Appellee.
XIP Technologies, LLC, challenges the modified temporary injunction entered against it and in favor of Ascend Global Services, LLC, in Ascend's action against XIP for breach of contract, conversion, civil theft, and injunctive relief. We reverse.
XIP and Ascend entered into a contract by which Ascend would pay XIP a monthly fee in exchange for the use of XIP computer software that enabled Ascend to accept credit card payments from its customers. Pursuant to the contract, XIP's merchant services account captured all credit card purchases by Ascend customers and deposited all monies received into Ascend's account. XIP also tracked all of Ascend's customer information, customer purchases, and sales transactions and provided this client data to Ascend. For its part, Ascend was required to pay XIP a monthly base fee of $10,000, which was due on the fifth day of each month. In the event that Ascend did not pay the fee within five days of the due date, its license and access to the XIP software system would be suspended until all outstanding fees were paid in full. Ascend concedes that it was often late making its monthly fee payments and that it failed to make the $10,000 payments for June, July, and August 2017. However, at some point, XIP stopped communicating with Ascend's vendors, marketing representatives, and customers; stopped accepting credit card payments for products sold to Ascend's customers; and stopped transferring to Ascend funds from the sales of its products and memberships. Ascend alleges that this happened before it first failed to make its monthly fee payment in June 2017.
Ascend filed suit against XIP, asserting claims for breach of contract, conversion, civil theft, and injunctive relief. Ascend alleged that XIP breached the contract by failing to remit monies due, provide customer data, and accept credit card payments from Ascend's customers. Ascend's conversion and civil theft counts alleged that XIP failed to pay approximately $117,000 due to Ascend from XIP's merchant services account. As to the timing of the breaches and who breached first, Ascend's complaint alleged that XIP started withholding customer data as early as February 2017.
After filing its complaint, Ascend filed a verified emergency motion for temporary injunction, seeking to prevent XIP from withholding revenue and customer data and to require XIP to continue providing the services spelled out in the parties' contract. The trial court referred the matter to a general magistrate, who held a hearing for which only Ascend was given notice. Following the ex parte hearing, the magistrate entered a report and recommendation in which it concluded that XIP's withholding of Ascend's net sales revenues and data files "has resulted in irreparable harm to" Ascend. The magistrate recommended injunctive relief, further concluding that Ascend "has no adequate remedy at law," that Ascend "has a likelihood of success on the merits for a permanent injunction," and that the temporary injunction will serve the public interest. The trial court adopted the report and recommendation and entered a temporary injunction. XIP moved to dissolve the temporary injunction, and following a hearing, the trial court entered an order granting in part and denying in part the motion. The court then entered a modified temporary injunction, which incorporated the factual findings and legal conclusions set forth in the magistrate's report and recommendation and provided as follows:
XIP now appeals, first arguing that the trial court erred in directing it to pay $117,291.54 to Ascend because there was no showing of irreparable harm or a lack of an adequate remedy at law. We agree.
An order on a motion for temporary injunction entered by a trial court must be based on the likelihood of irreparable harm, the unavailability of an adequate remedy at law, the substantial likelihood of success on the merits, and considerations of public interest. Richard v. Behavioral Healthcare Options, Inc., 647 So.2d 976, 978 (Fla. 2d DCA 1994). "The trial court has wide discretion to grant or deny a temporary injunction, and the appellate court will not intercede unless the grieving party clearly shows an abuse of discretion." Id.
In the temporary injunction here, the trial court adopted and incorporated the report and recommendation in which the magistrate concluded that the withholding of revenue and client data information caused Ascend irreparable harm for which Ascend has no adequate remedy at law. However, by directing XIP to pay Ascend approximately $117,000 for withheld sales revenues, the trial court demonstrated that Ascend has an adequate remedy at law in the form of money damages. By awarding that sum to Ascend at this stage of the proceedings, the trial court effectively decided the underlying breach of contract claim in Ascend's favor and...
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