SIG, Inc. v. AT & T Digital Life, Inc.

971 F. Supp. 2d 1178, 2013 WL 5005730, 2013 U.S. Dist. LEXIS 130538
CourtDistrict Court, S.D. Florida
DecidedSeptember 12, 2013
DocketCase No. 12-62080-CIV
StatusPublished
Cited by16 cases

This text of 971 F. Supp. 2d 1178 (SIG, Inc. v. AT & T Digital Life, Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
SIG, Inc. v. AT & T Digital Life, Inc., 971 F. Supp. 2d 1178, 2013 WL 5005730, 2013 U.S. Dist. LEXIS 130538 (S.D. Fla. 2013).

Opinion

ORDER ON MOTIONS TO DISMISS

ROBIN S. ROSENBAUM, District Judge.

This matter is before the Court upon the Motion to Dismiss Plaintiffs’ Complaint [D.E. 28] filed by AT & T Digital Life, Inc., and AT & T Teleholdings, Inc., (collectively “AT & T Defendants”) and the Motion to Dismiss Plaintiffs’ Complaint [D.E. 35] filed by Robert Diamond, William Diamond, and James Diamond (collectively “Diamond Defendants”). The Court has considered the motions, the parties’ briefs, and the Complaint and is otherwise fully advised in this matter. For the reasons explained below, the Court grants in part and denies in part Defendants’ dismissal motions.

I. FACTUAL BACKGROUND

Plaintiffs allege the following facts, which are taken as true for the purpose of analyzing Defendants’ motions to dismiss. Plaintiff SIG, Inc. (“SIG”), a Florida corporation with its principal place of business in Florida, does business under the name ViSonic Systems (“ViSonic”). D.E. 1, ¶ 3. Among other things, SIG “markets, distributes, supplies, and installs home and business electronic systems, including home security and home broadband services and products.” Id. Raymond Lovell is the owner of ViSonic. Id.

Plaintiff Secure2Ware, Inc. (“Se-cure2Ware”), is a Florida corporation with its principal place of business in Florida. Id. ¶ 4. Secure2Ware “provides, among other things, alarm systems for commercial and residential buildings, video cameras, alarm monitoring and related goods and services.” Id. Secure2Ware is owned by Keith Ware. Id.

Xanboo, Inc. (“Xanboo”), was a New York corporation with its principal place of business in New York. Id. ¶ 5. Defendant Robert Diamond was a co-founder of Xan-boo and served as its chief executive officer and chairman of its board of directors. Id. ¶ 6. Defendant William Diamond was a co-founder of Xanboo and served as Xan-boo’s president. Id. ¶ 7. Defendant James Diamond was likewise a co-founder of Xan-boo. Id. ¶ 8. Defendant AT & T Telehold-ings, Inc. (“AT & T Teleholdings”), a Delaware corporation with its principal place of business in Illinois, was an investor in Xanboo. Id. ¶ 55. Sometime between December 3, 2010, and November 2, 2011,1 [1184]*1184AT & T Teleholdings acquired Xanboo and purchased all of Xanboo’s stock, thus making Xanboo a wholly owned subsidiary. Id. ¶ 14. Xanboo’s name was subsequently changed to AT & T Digital Life, Inc. Id. ¶ 5.

Xanboo’s business involved providing a “technology platform that enables access and control of devices through TV, PC, Internet and mobile.” Id. ¶ 15. To accomplish this, Xanboo sold both hardware and software designed to assist in the remote monitoring and remote control of business and residential environments. Id. Xanboo’s product had “security, energy management, and healthcare” applications and would, for example, permit a homeowner to remotely manage a home alarm system, adjust thermostats, or observe his or her children via a device connected to the Internet. See id. ¶¶ 15-16, 22. Originally, Xanboo attempted to sell its product through direct retail, but eventually, Xan-boo decided to market its product to security-system vendors and installers to integrate with the security systems that the vendors and installers already offered. Id. ¶¶ 33, 35.

ViSonic learned about Xanboo by participating in a “Dealer Feasibility Study” organized by Group Gerhardt LLC (“Ger-hardt”), an industry consulting firm. Id. In May 2010, ViSonic contacted Xanboo about becoming a Xanboo dealer. Id. ¶ 36. Xanboo responded by, on at least four occasions, sending ViSonic an email describing a “Xanboo Dealership Special Offer.” Id. ¶ 37. The emails stated that ViSonic could become an authorized Xan-boo Dealer by purchasing an “Enhanced Security Starter Kit WiFi Upgrade” for $299.00. Id.

ViSonic placed its opening order with Xanboo on August 13, 2010, and that same day received a “congratulations note” confirming ViSonic as an authorized Xanboo dealer. Id. ¶¶ 38, 39; see also id. ¶¶ 41-45 (describing communications addressed to ViSonic and Lovell as Xanboo dealers). The Complaint does not allege how ViSonic placed its initial order, whether by phone, email, website, fax, or other means. Nor does the Complaint set forth facts showing when or how Secure2Ware began its relationship with Xanboo or indicating that Secure2Ware or Ware ever received correspondence addressed to them as dealers.

Plaintiffs contend that Xanboo led them to believe “that Xanboo would continue its product and service offerings through the Plaintiffs’ dealerships for at least long enough to permit Xanboo to ‘expand the offering’ with which it started.” Id. ¶ 78. In November 2010, ViSonic received an email from Xanboo’s “Regional Director of Dealer Development” Terry Gurley that stated that Xanboo “plan[ned] to support the following devices in the beginning and then expand the offering from there.” Id. ¶ 79. Xanboo’s November 2010 correspondence also included a presentation forecasting future product offerings. Id. ¶¶ 80-83.

AT & T Teleholdings acquired Xanboo sometime after December 3, 2010. Id. ¶¶ 14, 88. Prior to the purchase, Xanboo did not disclose to Plaintiffs that it “was considering a possible sale of any or all of Xanboo,” that it was “considering a potential sale of any Xanboo stock or assets to AT & T Teleholdings,” or that “Xanboo was negotiating the sale of any Xanboo stock or assets to AT & T Teleholdings.” Id. ¶¶ 84-86.

On December 7, 2010, Gerhardt sent an email to Plaintiffs on behalf of Gerhardt’s principal, Rob Gerhardt. Id. ¶ 87. The email relates that Defendant William Diamond told Rob Gerhardt that “AT & T had bought his company after having invested in it in 2006.” Id. In further describing William Diamond’s interaction with Rob [1185]*1185Gerhardt, the Gerhardt email notes that “[William Diamond] was excited and assured [Rob Gerhardt] that, from the small dealer perspective, it would only get better.” Id. At a subsequent teleconference meeting, Rob Gerhardt reiterated to Vi-Sonic that William Diamond had “assured Rob Gerhardt that the Xanboo platform would continue to improve and expand its offerings.” Id. ¶ 90. The Complaint does not set forth facts indicating that William Diamond, or any of the Diamond Defendants, made any representation to Plaintiffs or had any other direct interaction with Plaintiffs.

After the acquisition of Xanboo, an attorney for AT & T sent a certified letter to Plaintiffs on March 3, 2011. The certified letter indicated that AT & T Teleholdings acquired Xanboo and specified that

AT & T anticipates modifying or eliminating current Xanboo products and services and winding down its existing processes. The purpose of this letter is to notify you that your Agreement shall be terminated effective as of midnight, July 5, 2011.
... [T]his letter serves as notice that you should not market or sell Xanboo service after July 5, 2011. Accordingly we encourage you to transition your service needs from Xanboo to another provider as soon as practicable.

Id. ¶ 91 (internal quotation marks omitted).

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Cite This Page — Counsel Stack

Bluebook (online)
971 F. Supp. 2d 1178, 2013 WL 5005730, 2013 U.S. Dist. LEXIS 130538, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sig-inc-v-at-t-digital-life-inc-flsd-2013.