Max International v. VitImmune
Filing
21
MEMORANDUM DECISION granting 5 Motion to Dismiss for Failure to State a Claim ; granting request for attorney's fees ; that on or before February 10, 2012, VitImmune may file a motion for determination of its costs and expenses including reasonable attorney fees incurred, and on or before February 17, 2012, any response may be filed. Signed by Magistrate Judge David Nuffer on 02/01/2012. (asp)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, CENTRAL DIVISION
MAX INTERNATIONAL, LLC, a Utah
limited liability company
Plaintiff,
MEMORANDUM DECISION AND
ORDER GRANTING
MOTION TO DISMISS
v.
Case No. 2:11-cv-00970 DN
VITIMMUNE, INC., a Florida Corporation,
dba Robkeller.com
Defendant.
Judge David Nuffer
Plaintiff Max International, LLC (Max) brought an action against Defendant VitImmune,
Inc. (VitImmune), alleging that VitImmune violated an agreement between the parties. 1 In
response, VitImmune filed a motion to dismiss Max’s Complaint and also moved for an award of
attorney’s fees. 2
FACTUAL AND PROCEDURAL BACKGROUND
On July 1, 2007, VitImmune and Max entered into a Product License Agreement
(License). Under the License, Max agreed to “license [VitImmune]’s Glutathione technology for
the purpose of producing and marketing said technology in a form agreed upon by the parties.” 3
The License was “an exclusive world-wide license,” meaning that VitImmune would “not
license the glutathione technology to any other Company” except under certain circumstances. 4
On December 23, 2010, Max and VitImmune entered into a second agreement—a
Settlement, Amendment and Modification Agreement (Settlement Agreement)—which modified
1
Complaint, docket no. 2, filed October 19, 2011.
2
[Defendant’s] Motion to Dismiss for Failure to State a Claim, docket no. 5, filed November 29, 2011.
3
License ¶ 3, attached as Exhibit 1 to Complaint, docket no. 2, filed October 19, 2011.
4
License ¶ 3.
the License. Under the Settlement Agreement, Max and VitImmune agreed that “Max’s license
of Vitimmune’s Glutathione technology shall be non-exclusive and that Vitimmune shall have
the right to market or license such technology as Vitimmune may determine in its sole
discretion . . . .” 5 The only limit on VitImmune’s discretion to license was that VitImmune could
not “license its Glutathione technology to another entity while Max is making timely payments
due under this agreement.” 6 Subsequently, VitImmune began selling its glutathione technology
through a website it created. 7
Max filed a Complaint based on two allegations. First, that it was the “exclusive licensee
of VITIMMUNE’S glutathione technology pursuant to the LICENSE and the [Settlement
Agreement],” 8 and second, that it was current on all payments under the Settlement Agreement. 9
Max therefore claimed VitImmune breached the parties’ agreement by creating and maintaining
a website to sell the glutathione technology. 10
MOTION TO DISMISS
VitImmune argues that dismissal of Max’s Complaint is appropriate because, under the
controlling agreement (the Settlement Agreement) Max does not have an exclusive license to sell
5
Settlement Agreement ¶ 3, attached as Exhibit 2 to Complaint, docket no. 2, filed October 19, 2011 (emphasis
added). In its entirety, paragraph 3 of the Settlement Agreement provides:
Non-Exclusivity. Notwithstanding any term to the contrary in the License, the Parties agree that
Max’s license of Vitimmune’s Glutathione technology shall be non-exclusive and that Vitimmune
shall have the right to market or license such technology as Vitimmune may determine in its sole
discretion except that Vitimmune shall not license its Glutathione technology to another entity
while Max is making timely payments due under this agreement. Max at its option may continue
to keep Vitimmune from licensing the technology to another entity by making consecutive
monthly payments (the first such payment being 30 days after the last required payment is made)
in the amount of $50,000 per month after all required payments are made.
6
Settlement Agreement ¶ 3 (emphasis added).
7
Complaint ¶ 7.
8
Id. ¶ 9; see also id. ¶¶ 12, 15.
9
Id. ¶ 6.
10
Id. ¶ 9.
2
VitImmune’s glutathione technology. 11 VitImmune argues that the Settlement Agreement “does
not preclude VitImmune from directly marketing or selling its glutathione technology to any
person or entity;” 12 rather, VitImmune “is only restricted from licensing that technology to
another entity.” 13 VitImmune therefore argues that because it did not license its glutathione
technology to another entity (instead, it simply sold the technology through a self-created
website), Max’s claims are defeated as a matter of law. 14 The court agrees.
“The court’s function on a Rule 12(b)(6) motion is not to weigh potential evidence that
the parties might present at trial, but to assess whether the plaintiff’s complaint alone is legally
sufficient to state a claim for which relief may be granted.” 15 “In doing so, all facts alleged in
the complaint are taken as true and all reasonable inferences are indulged in favor of the
plaintiffs.” 16 However, “the complaint must give the court reason to believe that this plaintiff
has a reasonable likelihood of mustering factual support for these claims.” 17
There is no factual support for Max’s first allegation that Max was the “exclusive
licensee” of VitImmune’s glutathione technology. While it is true that Max held exclusive
license under the original License, the parties’ Settlement Agreement made clear that,
“[n]otwithstanding any term to the contrary in the License, . . . Max’s license of Vitimmune’s
Glutathione technology shall be non-exclusive,” 18 which meant that VitImmune was free to
11
See [Defendant’s] Memorandum in Support of Motion to Dismiss (Supporting Memorandum), docket no. 6, filed
November 29, 2011, at 8.
12
Supporting Memorandum at 2 (emphasis in original).
13
Id. (emphasis in original).
14
See id.
15
Tal v. Hogan, 453 F.3d 1244, 1252 (10th Cir. 2006) (citation omitted).
16
Id. (citation omitted).
17
Ridge at Red Hawk, L.L.C. v. Schneider, 493 F.3d 1174, 1177 (10th Cir. 2007) (emphasis omitted).
18
Settlement Agreement ¶ 3 (emphasis added).
3
“market or license such technology as Vitimmune may determine in its sole discretion . . . .” 19
Therefore, the Settlement Agreement unequivocally abrogated the exclusivity that previously
existed under the License.
Moreover, VitImmune did not breach the parties’ agreement by selling the glutathione
technology directly on the internet. As the Settlement Agreement makes clear, the only
restriction on VitImmune’s ability to market or license the technology was that VitImmune could
not license the glutathione technology to another entity. 20 The Settlement Agreement does not
limit VitImmune’s ability to market or sell the technology directly. Max’s Complaint
acknowledges that the website which sells the glutathione technology was “creat[ed] and
maintain[ed]” by VitImmune itself. 21 Because Max does not allege in its Complaint that
VitImmune has licensed the technology to another entity, the Complaint fails as a matter of law.
Max asserts that the intent of the parties is unclear from the language of the Settlement
Agreement and that Max would have never agreed to allow VitImmune to engage in direct
competition with Max.22 But that is exactly what the plain language of the Settlement
Agreement allows. The plain language of the Settlement Agreement makes clear that the parties
intended, in no uncertain terms, to enter into a “non-exclusive” agreement and that VitImmune
could market the glutathione technology at its own discretion.
Max also claims VitImmune was prohibited from selling or marketing the glutathione
technology directly on its own website because Max remained current on its payments. 23 But
19
Id. (emphasis added).
20
See id.
21
Complaint ¶ 9.
22
See [Plaintiff’s] Response to Defendant’s Motion to Dismiss for Failure to State a Claim (Opposing
Memorandum), docket no. 16, filed Dec. 28, 2011, at 4.
23
See Opposing Memorandum at 5; Complaint ¶ 6.
4
VitImmune was free to sell or market the technology at any time, regardless of Max’s
conformance with payment obligations. The Settlement Agreement did not restrict VitImmune
from selling or marketing the technology; rather, it only provided that VitImmune could not
license the technology to another entity as long as Max remained current on its obligations.
Because Max has failed to allege that VitImmune licensed the technology in violation of
the parties’ agreement, Max has failed to state a claim upon which relief can be granted.
Therefore, VitImmune’s Motion to Dismiss is GRANTED.
ATTORNEY’S FEES
In its Motion to Dismiss, VitImmune asserts that it is “entitled to recover all of its
reasonable attorney fees and costs in defending this action.” 24 Florida law governs the
Settlement Agreement. 25 Under Florida law, “each party generally bears its own attorneys’ fees
unless a contract or statute provides otherwise.” 26 If an agreement clearly provides for attorney’s
fees to the prevailing party, “courts have no discretion to decline to enforce” the attorney’s fees
provision. 27
Here, the Settlement Agreement clearly provides for attorney’s fees to the prevailing
party. The Settlement Agreement states: “If any party shall seek to enforce or protect its rights
under this Agreement . . . the prevailing party shall be entitled to receive from the other party
payment of its costs and expenses, including reasonable attorney fees incurred . . . .” 28
24
Supporting Memorandum at 9.
25
Settlement Agreement ¶ 13.
26
Price v. Tyler, 890 So.2d 246, 250 (Fla. 2004) (citation omitted).
27
Brickell Bay Club Condominium Ass’n, Inc. v. Forte, 397 So.2d 959, 960 (Fla. 3d Dist. Ct. App. 1981) (emphasis
added)(rev. den. 408 So.2d 1092 (Fla. 1981).
28
Settlement Agreement ¶ 14.
5
In Brickell Bay Club v. Forte, the parties entered into an agreement which provided that
if the parties were involved in “any litigation arising out of this Contract, the prevailing party
shall be entitled to recover all costs incurred, including reasonable attorneys’ fees.” 29 A dispute
arose and litigation followed. 30 The trial court declined to award the prevailing party reasonable
attorney’s fees and costs, reasoning that attorney’s fees were not justified “because the action
had been brought in good faith and on fairly debatable grounds.” 31 The prevailing party
appealed regarding the denial of attorney’s fees. 32 The appellate court reversed, holding that the
fees provision gave the prevailing party “a clear and unequivocal right to the recovery of both
attorney’s fees and costs.” 33
Here, because the Settlement Agreement between VitImmune and Max clearly provides
for attorney’s fees to the prevailing party, this court has “no discretion to decline to enforce” the
attorney’s fees provision in the Settlement Agreement. 34 VitImmune has “a clear and
unequivocal right to the recovery of both attorney’s fees and costs.” 35 Therefore, VitImmune’s
request for attorney’s fees is GRANTED.
29
397 So.2d at 960.
30
Id.
31
Id.
32
Id.
33
Id.
34
See Brickell Bay Club, 397 So.2d at 960.
35
Id.
6
ORDER
IT IS HEREBY ORDERED that VitImmune’s Motion to Dismiss is GRANTED.
VitImmune’s complaint is dismissed with prejudice. VitImmune’s request for attorney’s fees is
GRANTED as provided herein.
IT IS FURTHER ORDERED that on or before February 10, 2012, VitImmune may file a
motion for determination of its costs and expenses including reasonable attorney fees incurred,
and on or before February 17, 2012, any response may be filed.
Dated February 1, 2012.
BY THE COURT:
____________________________
David Nuffer
U.S. Magistrate Judge
7
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?