International Technologies Marketing, Inc. v. Verint Systems, Ltd.

157 F. Supp. 3d 352, 2016 U.S. Dist. LEXIS 9546, 2016 WL 344977
CourtDistrict Court, S.D. New York
DecidedJanuary 27, 2016
Docket1:15-cv-2457-GHW
StatusPublished
Cited by29 cases

This text of 157 F. Supp. 3d 352 (International Technologies Marketing, Inc. v. Verint Systems, Ltd.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
International Technologies Marketing, Inc. v. Verint Systems, Ltd., 157 F. Supp. 3d 352, 2016 U.S. Dist. LEXIS 9546, 2016 WL 344977 (S.D.N.Y. 2016).

Opinion

MEMORANDUM OPINION AND ORDER

GREGORY H. WOODS, District Judge

I. INTRODUCTION

In late 2006, plaintiff International Technologies Marketing, Inc. (“ITM”) agreed to assist defendant Verint Systems, Ltd. (“Verint”) in its efforts to acquire a Brazilian company, Suntech. ITM had initially identified Suntech as a potential customer for Verint’s telecommunications products, but Verint quickly shifted its focus towards an acquisition instead. According to the terms of the contract entered into between ITM and Verint, ITM was to use best commercial efforts to assist Verint in acquiring Suntech, but was only to be compensated if Verint completed the purchase. The contract expired in February 2007, but ITM maintained its role facilitating negotiations between the two sides through September of that same year. Although Verint and Suntech got close to reaching a deal at various points in time, a deal was not reached, and — as far as ITM was aware — any potential acquisition was off.

Nearly four years later, Verint acquired Suntech.' ITM now brings suit, alleging that Verint’ breached the parties’ contract because it eventually acquired Suntéch without compensating ITM. ITM also brings additional state law claims based on similar allegations. Because the complaint fails to plausibly allege that Verint had any obligation to pay ITM for an acquisition that occurred nearly four years after the parties’ contract expired, and for the further reasons outlined below, defendant’s motion to dismiss is GRANTED.

II. BACKGROUND1

ITM' is a small company founded in February 2004 that .provides consulting and business development services. Am. Compl. ¶¶ 1, 16. ITM bills itself as a having an expertise in security products and technology used by law enforcement and intelligence, agencies, with a particular knowledge of the Brazilian market. Id. ¶15. ITM’s business involved brokering relationships between large foreign companies in the security/technology sector with existing Brazilian, companies, thereby allowing the foreign companies to overcome local barriers that would otherwise hinder their entry into the Brazilian market. Id. ¶¶ 16-17,- •

In the summer of 2004, ITM identified Verint, an Israeli vendor that sells telecommunications monitoring systems to law enforcement agencies, as a potential business partner for breaking-into the Brazilian market. Id. ¶¶2, 17. Verint was not unaware ’ of the potential for selling its products in Brazil — it had previously sold [358]*358its equipment to the Brazilian federal police — but its local reputation had been damaged when that equipment failed to conform to local standards. Id. ¶¶ 19, 24-25. Despite that setback, Verint expressed an interest in continuing to sell its product in Brazil. After further talks, Verint agreed to allow ITM to develop cooperation programs with local Brazilian companies who would be willing to customize and resell Verint’s products in Brazil. Id. ¶¶ 18-21.

The first Brazilian company that ITM approached on behalf of Verint was Digi-tro, a Brazilian company that sold telecommunications equipment to the Brazilian federal police. Id. ¶ 22. In order to memorialize the parties’ obligations regarding that undertaking, ITM and Verint entered into a written agreement on February 22, 2006 (the “Initial Agreement”). Id.; Initial Agreement, Dkt. No. 41-2. Under the terms of the contract, ITM agreed to make an introduction and recommend Verint to Digitro, as well as to assist in negotiations between the two companies. Initial Agreement § 1.2. In return, ITM was entitled to a 5% commission from Verint’s sales to Digitro, for the duration of the Initial Agreement plus six months; Id. Appendix A § 1. The scope of ITM’s payments was expressly limited to the 5% commission, referred to as a “finder’s fee” in the contract. Specifically, the Initial Agreement provided that ITM would “[b]ear all the expenses incurred by it in the performance of [its] obligations ... and work at its own risk.” Id. § 2.1. Moreover, the agreement stated that, aside from the finder’s fee, “[n]o other payment or reimbursement will be due or payable to [ITM],” and “[i]n no event will [Verint] be liable to [ITM] for any business expenses, loss of profits, or incidental, indirect or consequential damages.” Id. § 7. The Initial Agreement expressly expired after twelve months,2 and thus was effective until February 21, 2007. Id. § 8.

Later that same year, ITM also identified Suntech as another potential prospect for Verint to develop a business relationship, Am. Compl. ¶¶ 27-30. Suntech, like Digitro, is a Brazilian company in the telecommunications security field. Id. ¶ 27. In order to extend the Initial Agreement to cover sales to Suntech, the parties executed a short, one-page amendment to the agreement on September 11, 2006 (the “September Amendment”). Id. ¶ 31; September Amendment, Dkt. No. 41-3. The amendment was limited in scope, and only modified “certain terms of the [Initial Agreement].” September Amendment. Specifically, ITM agreed to assist Verint in establishing a business relationship with Suntech, in return for a 5% commission from Verint’s sales to Suntech. Id. § 2. Aside from that new provision, the September Amendment provided that “all terms and conditions of the [Initial Agreement] will continue to apply to the parties.” Id. § 3.

Shortly after executing the September Amendment, Verint became interested in potentially acquiring Suntech outright, rather than simply selling products to it. Id. ¶¶ 32-33, 36, 38. ITM agreed to assist Verint in the contemplated acquisition, and both parties agreed that a new written agreement was needed to cover ITM’s expanded responsibilities, although one was not signed for several months. Id. ¶¶ 32-34, 44. Nevertheless, ITM began gathering information and meeting with Suntech, with the goal of facilitating an acquisition. Id. ¶ 34. Over the course of the next few months, ITM expended considerable effort towards this goal, which included setting up meetings between the parties, persuad-[359]*359mg Suntech to accept an acquisition, and facilitating negotiations and attempting to “close the gap” between the parties’ respective positions. Id. ¶¶ 33, 36-39, 46, 70. These efforts seemed to culminate in December 2006, when Verint executives presented Suntech with a letter of intent and term sheet for the proposed acquisition. ¶¶ 40-41. ;

As a deal appeared close to fruition, Verint and ITM again agreed to amend their existing agreement to cover the contemplated acquisition, which the parties executed on December 20, 2006 (the “December Amendment”). Id. ¶ 44; December Amendment, Dkt. No. 41-4. As with the September Amendment, the December Amendment was a short one-page amendment that only modified “certain terms” of the prior agreements. December Amendment. The agreement required ITM to use its “best commercial efforts to assist and support [Verint] in its activities regarding the purchase (shares or assets) of Sun-tech[.]” December Amendment § 2. In return, the agreement provided that “[i]n the event that [Verint] complete the Purchase of Suntech, [ITM] shall be entitled” to 4% of Verint’s payment to Suntech at the purchase closing, and 3% of any payments subsequent to closing.3 Id.

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157 F. Supp. 3d 352, 2016 U.S. Dist. LEXIS 9546, 2016 WL 344977, Counsel Stack Legal Research, https://law.counselstack.com/opinion/international-technologies-marketing-inc-v-verint-systems-ltd-nysd-2016.