Liang v. AWG Remarketing, Inc.

126 F. Supp. 3d 964, 2015 U.S. Dist. LEXIS 167498, 2015 WL 8766697
CourtDistrict Court, S.D. Ohio
DecidedDecember 15, 2015
DocketCase No. 2:14-cv-00099
StatusPublished

This text of 126 F. Supp. 3d 964 (Liang v. AWG Remarketing, Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Liang v. AWG Remarketing, Inc., 126 F. Supp. 3d 964, 2015 U.S. Dist. LEXIS 167498, 2015 WL 8766697 (S.D. Ohio 2015).

Opinion

OPINION AND ORDER

GREGORY L. FROST, UNITED STATES DISTRICT JUDGE

This matter is before the Court for consideration of the following filings: (1) Third-Party Defendant William Green-wald’s motion for summary judgment as to the third-party complaint (ECF No. 215); (2) Third-Party Plaintiffs AWG Re-marketing, Inc. and Group 3 Auctions, LLC (collectively, “Plaintiffs”) response in opposition and motion for partial summary judgment on Counts I and II of the third-party complaint (ECF No. 229); (3) Green-wald’s combined response in opposition to Plaintiffs’ motion and reply in support of his motion (ECF No. 230); and (4) Plaintiffs’ reply in support of their motion (ECF No. 237). For the reasons that follow, the Court GRANTS Greenwald’s motion and DENIES Plaintiffs’ motion.

I. BACKGROUND

This lawsuit began on October 17, 2013, when Huey Jiuan Liang filed a complaint for copyright infringement against AWG Remarketing, Inc. (“AWG”), Group 3 Auctions, LLC (“Group 3”), and Columbus Fair Auto Auction (“CFAA”) (collectively, “Liang Defendants”). Liang alleged that her former company, Automotive Remark-eting Exchange (“ARX”), owned the intellectual property rights associated with a website and computer code in the field of wholesale automobile auctions (the “ARX Program”). Liang further alleged that AWG and ARX entered into an agreement under which AWG would use the ARX Program. According to Liang, ARX planned to acquire AWG. That acquisition did not come to fruition.

Group 3 purchased AWG instead. Liang alleged that Group 3’s acquisition of AWG violated the agreement between AWG and ARX. Liang further alleged that, as a result of the acquisition, Group 3 obtained access to the ARX Program. Liang did not attach any evidence of the alleged agreement between ARX and AWG to her complaint.

Liang Defendants filed a counterclaim against Liang for abuse of process, among other claims. Liang Defendants alleged that Liang’s claims are frivolous and that she pursued this litigation with the sole purpose of attempting to extract a settlement.

AWG and Group 3 also filed a third-party complaint against AWG’s former majority shareholder, William Greenwald. AWG and Group 3 (collectively, “Plaintiffs”) allege that Greenwald (along with AWG’s minority shareholders) sold AWG to Group 3 on December 8, 2011. Plaintiffs [966]*966assert that the Stock Purchase Agreement memorializing the sale (“SPA”) contains several representations and warranties that Greenwald breached in this case. Specifically, Plaintiffs point to Greenwald’s representations in the SPA that AWG owned the software and computer code that it used, that there were no pending claims or disputes against AWG at the time of the sale, that no party has any right to AWG’s assets (defined to include AWG’s intellectual property), and that “AWG has not received any notice that its operations, activities, products are services infringe the patents, trademarks, trade names, copyrights and other property rights of others.” (ECF No. 101-3, at PA-GEID # 4380.) Plaintiffs assert that, if Liang’s allegations are true, then Green-wald breached these warranties. Plaintiffs conclude that Greenwald must indemnify the costs of defending the Liang lawsuit.

On August 18, 2015, the Court granted summary judgment to Liang Defendants on all of Liang’s claims. The Court found that Liang lacked standing to pursue her claims because she did not own the intellectual property rights in the ARX Program at the time she filed her complaint. The Court did not address the issue of whether ARX and/or Group 3 infringed any copyrights associated with the ARX Program. Stated differently, the Court has not made any factual findings regarding the substance of Liang’s claims.

Only the third-party complaint and the abuse of process counterclaim remain pending in this litigation. The third-party complaint is the subject on this Opinion and Order. Plaintiffs assert the following claims for relief against Greenwald:

• Count I: Breach of the SPA and Demand for Indemnity. Plaintiffs allege that Greenwald made several warranties and representations in the SPA. Because, according to Plaintiffs, Greenwald breached those warranties
and representations, he is required under the terms of the SPA to indemnify Plaintiffs for the costs of defending the Liang lawsuit. Plaintiffs’ claim hinges on its argument that the Court should assume of all Liang’s allegations to be true — despite Plaintiffs’ repeated assertions throughout this lawsuit that they are not — in concluding that Greenwald’s warranties in the SPA are false. Plaintiffs assert that Greenwald breached the SPA’s indemnification provision by failing to indemnify the costs of defending the Liang lawsuit.
• Count II: Declaratory Judgment. ■ Plaintiffs seek a declaratory judgment that the SPA should be interpreted to require Greenwald to indemnify Plaintiffs for the costs of defending the Liang lawsuit.
• Counts III and IY: Violation of § 1707.41 of the Ohio Securities Act — Civil Liability of Seller for Fraud and Violation of Federal Securities Laws. Group 3 alleges that Greenwald made untrue statements of material fact when he made the warranties and representations set forth in the SPA. These claims again hinge on Plaintiffs’ assertion that the Court should assume Liang’s allegations to be true in determining that Greenwald misrepresented certain facts in the SPA.

Plaintiffs move for summary judgment on Counts I and II of the third-party complaint. In so moving, Plaintiffs argue that Liang’s allegations render Green-wald’s warranties in the SPA false. Plaintiffs do not attempt to prove that Liang’s allegations are true and/or that Greenwald had knowledge of Liang’s allegations before the sale of AWG.

Greenwald also moves for summary judgment on all of Plaintiffs’ claims. [967]*967Greenwald filed a fifty-five page brief in support of his motion; however, most of the brief is taken from a related case in which Greenwald alleges that Group 3 and certain individuals fraudulently convinced Greenwald to sell AWG at an artificially-deflated price. Few of these arguments are relevant to the issues currently before the Court. As such, the Court will focus on the limited portion of Greenwald’s brief that discusses Greenwald’s warranties and representations, the SPA’s indemnification provision, and related issues.

II. ANALYSIS

A. Standard of Review

Federal Rule of'Civil Procedure 56 provides that summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The Court therefore may grant a motion for summary judgment if the nonmoving party who has the burden of proof at trial fails to make a showing sufficient to establish the existence of an element that is essential to that party’s case. See Muncie Power Prods., Inc. v. United Tech. Auto., Inc., 328 F.3d 870, 873 (6th Cir.2003) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct.

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Cite This Page — Counsel Stack

Bluebook (online)
126 F. Supp. 3d 964, 2015 U.S. Dist. LEXIS 167498, 2015 WL 8766697, Counsel Stack Legal Research, https://law.counselstack.com/opinion/liang-v-awg-remarketing-inc-ohsd-2015.