United States District Court, N.D. Indiana, Fort Wayne Division
OPINION AND ORDER
A. BRADY JUDGE
Defendant, The Cellular Connection, LLC f/k/a Moorehead
Communications, Inc. (Moorehead), has moved to dismiss the
Complaint pursuant to Federal Rule of Civil Procedure
12(b)(6) on res judicata grounds. Moorehead argues that the
litigation repeats allegations that the Plaintiff,
Entertaining USA, Inc. d/b/a One Wireless World
(OWW) filed against Moorehead in 2012, which
were resolved in favor of Moorehead and affirmed on appeal.
reasons stated in this Opinion and Order, the Court will deny
Moorehead's Motion to Dismiss [ECF No. 7].
AND COMPLAINT ALLEGATIONS
operated as a cell phone wholesaler and licensor. It had a
network of affiliated dealers and retail stores in central
Pennsylvania. OWW was a wholesaler for ATT/Cingular and
Sprint/Nextel, later focusing exclusively on Sprint Nextel.
is a Verizon master agent based out of Indiana. Moorehead
wanted to expand its presence in central Pennsylvania.
Partnering with OWW could accomplish this goal, but if OWW
added Verizon to its offerings, OWW might lose revenue to be
gained from offering services through other carriers. In
2006, the parties entered into a “referral
agreement” (the Agreement) intended to memorialize
their understanding that OWW would refer some of its stores
to Moorehead as potential Verizon stores. In return,
Moorehead agreed to pay OWW a “referral bonus”
for each new Verizon activation that resulted, regardless of
whether the referred stores continued to offer service with
The 2012 Litigation
2012, OWW sued Moorehead in federal district court, alleging
that it breached the Agreement by discontinuing payments in
2008. OWW also requested an equitable accounting, and claimed
that Moorehead had been unjustly enriched. The terms of the
contract were litigated and decided through partial summary
judgment and a bench trial.
the findings on liability could have entitled OWW to
recovery, OWW failed to prove its damages with any certainty,
as was required by Indiana law. “[OWW] hasn't
proved that it was paid any less than it should have been.
This record doesn't support a damages award in any
amount.” Entm't USA, Inc. v. Moorehead
Commc'ns, Inc., No. 1:12-CV-116 RLM, 2017 WL
3432319, at *16 (N.D. Ind. Aug. 9, 2017). Because the
plaintiff failed to prove its damages with any certainty,
despite the full use of the discovery process, the district
court also denied an equitable accounting. Id. at
*17. As a result, the district court ruled that
“Entertainment USA, Inc. . . . shall take nothing by
its complaint.” Id.
appeal, the Seventh Circuit focused on the damages issue as a
dispositive one that was “sufficient to decide
virtually all of this appeal.” Entm't
USA, Inc. v. Moorehead Commc'ns, Inc., 897 F.3d
786, 792 (7th Cir. 2018). It concluded that,
“[r]egardless of the scope of potential liability under
the referral agreement, Entertainment USA did not show the
district court that it was entitled to any recovery.”
Id. at 795. Because OWW had not proven its damages
with reasonable certainty, despite “equal means of
knowledge” through discovery, it was not entitled to
the equitable remedy of an accounting as a “second
attempt at proving its damages.” Id. at 796.
The Seventh Circuit added the following footnote:
At oral argument we raised the possibility that under the
district court's duration analysis-that the referral
agreement remained in force “as long as any referred
location was producing activations, ” 2017 WL 3432319,
at *6-Moorehead may have had an ongoing post-trial duty to
pay referral fees in 2016 and beyond that an equitable
accounting would reveal. Entertainment USA did not fail to
“make the substantive argument” on this point in
either the district court or on appeal, so the argument has
not been forfeited. See Dixon v. ATI Ladish LLC, 667
F.3d 891, 895 (7th Cir. 2012), citing Elder v.
Holloway, 510 U.S. 510 (1994), and FDIC v.
Wright, 942 F.2d 1089, 1094-95 (7th Cir. 1991). However,
given that an equitable accounting is a remedy left to the
sound discretion of the trial court in the first instance,
and given that Entertainment USA did not ask the district
court to clarify the prospective implications of its ruling,
we decline to reach that issue here. We do not express an
opinion on this question beyond observing that the general
rule in Indiana is that “a contract containing no
specific termination date is terminable at will.”
See City of East Chicago, Ind. v. East Chicago Second
Century, Inc., 908 N.E.2d 611, 623 (Ind. 2009), citing
House of Crane, Inc. v. H. Fendrich, Inc., 256
N.E.2d 578 (1970).
Id. at 796 n.5 (parallel citations omitted).
The Current Litigation
October 4, 2018, Entertainment USA, Inc., which does business
as OWW, filed a Complaint against The Cellular Connection,
LLC f/k/a Moorehead Communications, Inc. The Complaint sets
forth the same General Allegations contained in the 2012
complaint. Additionally, the Complaint recites findings the
district court made in the 2012 Litigation, including the
finding that the parties intended the Agreement to live on as
long as any referred location was producing activations. The
Complaint identifies four locations that OWW referred to
Moorehead and alleges that, following the trial in the 2012
litigation, these four “Referred Locations were open
and producing activations and upgrades” that warranted
payment of a referral fee. (Compl., ¶ 16.) According to
the Complaint, “[d]espite multiple ...