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Entertainment USA, Inc. v. Moorehead Communs., Inc.

United States District Court, N.D. Indiana, Fort Wayne Division

March 20, 2015


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[Copyrighted Material Omitted]

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For Entertainment USA Inc, Plaintiff: Jason M Kuchmay, Carson Boxberger LLP - FW/IN, Fort Wayne, IN USA.

For Moorehead Communications Inc, Defendant: Karen T Moses, Kevin J Mitchell, LEAD ATTORNEYS, Steven L Jackson, Faegre Baker Daniels LLP - FW/IN, Fort Wayne, IN USA.

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RUDY LOZANO, United States 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

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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 twopage 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 activation[2]
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

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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 buildout. 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 ...

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