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FILED: ROCKLAND COUNTY CLERK 02/27/2017 12:54 PM INDEX NO. 030894/2017
NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 02/27/2017
Terry L. Trantina, Esq.
Associate General Counsel
Active Media Services, Inc.
One Blue Hill Plaza
Pearl River, NY 10965
(845) 732-8658
Attorneys for Plaintiff, Active Media Services, Inc.
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF ROCKLAND
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│
│ Index No.:
Active Media Services, Inc., │
│ Plaintiff designates Rockland County as the place of
Plaintiff, │ trial.The basis of venue is the residence of Plaintiff,
│ Active Media Services, Inc. and contract agreement.
-against- │
│
Homedics USA, LLC │ COMPLAINT FOR
│ BREACH OF CONTRACT
Defendant. │
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│
Plaintiff, Active Media Services, Inc. (“Active”), by way of its Complaint for breach of contract
against Defendant, Homedics USA, LLC, alleges and says as follows:
INTRODUCTION & FACTUAL BACKGROUND
1. This is an action seeking judgment that Defendant has materially breached its obligations
to Active under the terms of a written commercial contract entered into by Active and Defendant on April
14, 2016, and that, as a result, Defendant is obligated to pay Active $1,139,397.51. A copy of this written
Assignment Agreement (the “Agreement”) executed by Active and Defendant is attached as Exhibit A to
this Complaint and is incorporated herein by this reference.
2. Active is Delaware domestic corporation registered to do business as a foreign
corporation in the State of New York from his headquarters and principal office which is located at One
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Blue Hill Plaza, Pearl River, Rockland County, New York. Active is a corporate trading company and in
the normal course of its business purchases advertising media and other goods and services on behalf of
clients, such as Defendant, from the third-party vendors of such advertising and other goods and services.
3. Defendant, Homedics USA, LLC, is a limited liability entity, domesticated in the State of
Michigan, ID No. D7872U. Defendant’s principal operating office is located at 3000 Pontiac Trail,
Commerce Township, Michigan 48390.
4. The purpose of the Agreement (Exhibit A to the Complaint) was to assign to Defendant
certain “Trade Credit” that were issued to an affiliate of Defendant in Australia (i.e., Homedics, Inc.) by
Active’s affiliate also in Australia (i.e., Active International (Australia) Pty Ltd.).
5. Trade Credit may be used by the client party to whom they are issued in lieu of cash to
pay an agreed portion of an Active invoice for goods purchased through Active on behalf of such client,
in this case, the Defendant, when invoiced by Active. The terms of such Trade Credit use are set forth in
a written agreement between Active and Defendant. The contractual commitment of the Defendant to
adhere to Active’s terms of Trade Credit usage was accepted by Defendant when the Trade Credit was
assigned by itsaffiliate in Australia, with the consent of Active and its affiliate in Australian. The
Defendants acceptance of those Trade Credit usage to purchase goods through Active is set forth in
Schedule A to the Agreement and consist of a “Trade Credit Usage Agreement” (see Exhibit A to this
Complaint).
6. Pursuant to the terms of the Trade Credit Usage Agreement, each Active invoice for
goods purchased by Defendant states the amount of assigned Trade Credit that will be applied to each
invoice. Defendant is obligated to pay the remaining portion of each invoice entirely in cash.
7. Pursuant to the terms of the Trade Credit Usage Agreement, Defendant submitted buying
plans and authorized Active to purchase on its behalf certain retail marketing goods from the designated
vendor of such goods (i.e.,Applied Merchandising Concepts (“AMC”), 15 Beechwood Avenue, New
Rochelle, NY 10801). Defendant provided Active the specifications and requirements for the goods it
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requested Active to purchase on its behalf and Active provided those specifications and requirements to
the vendor approved by Defendant.
8. Defendant authorized Active to purchase these retail marketing goods by having its
authorized representative acknowledge and approve Active’s Purchase Authorization Forms (“Purchase
Orders”) in each case identifying the goods to be purchased by Active on behalf of Defendant, the cash
price to be paid by Defendant for such goods, and the terms of payment and delivery (i.e., Net 30 Days,
and the FOB terms).
9. As provided by the terms of the Trade Credit Usage Agreement, the cash price that
Defendant agreed to pay Active for the goods ordered by Defendant reflected a “Trade Credit” equal to
10% of the total price Defendant agreed to pay Active for the goods Defendant ordered. The purchase
orders that Defendant authorized Active to place on its behalf with AMC and Active’s invoices to
Defendant reflected the application of the Trade Credit and the cash price (the remaining 90%) to be paid
by Defendant with respect to each invoice for those goods.
10. With Defendant-approved purchase authorizations in hand, Active then placed orders
with the designated vendor to purchase the retail marketing goods Defendant authorized Active purchase
on its behalf, in this case custom displays for placement in retail stores (e.g., Macy’s) offering Defendant
or Defendant’s affiliates’ goods for sale.
11. The vendors with whom Active placed orders for these retail marketing goods
subsequently delivered the goods to the destinations specified by Defendant. These goods are now in
retail stores (e.g., Macy’s) and are being used by Defendant to sell their products to the customer of these
retail stores. Following delivery of the ordered goods, Active invoiced Defendant for the retail marketing
goods delivered.
12. Pursuant to the terms of the Trade Credit Usage Agreement, Active invoiced Defendant
for the agreed price for the goods purchased on behalf of Defendant from the vendor AMC on numerous
occasions during the period June 30, 2016 through February 13, 2017. During this period, Active
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invoiced Defendant for a total amount of $1,388,475.79. Payment by Defendant of those invoices was
due to be paid to Active thirty (30) days from of the invoice date each invoice.
13. During the period June 30, 2016 through February 13, 2017, Defendant made one
payment of $119,078.28 against the invoices issued by Active to Defendant. In addition, Active agreed to
pass through a refund, offered by Active’s vendor (AMC), of $130,000 of air freight charges that were
assumed and paid directly by Defendant related to AMC’s rush delivery at the request of Defendant of a
portion of the goods purchased by Defendant. The remaining unpaid balance due Active is
$1,139,397.51.
14. Despite demands to do so, Defendant has not paid any further amount due Active with
respect to the Active invoices for the goods ordered by Defendant, delivered by Active’s vendor, and
accepted by Defendant.
15. Defendant has not paid these invoices despite Plaintiff’s notice that legal action would be
taken if payment was not promptly received.
16. Pursuant to the terms of the Trade Credit Usage Agreement, i.e.,Section 4.2, Active’s
obligation to pay AMC for the goods purchased by Active on behalf of (“in care of”) Defendant is
contingent upon payment by Defendant to Active when invoiced by Active. In the corporate trade
industry, this is known as “sequential liability.” Accordingly, despite AMC’s delivery of the goods to the
locations designated by Defendant and Defendant’s use of those goods, Active has not paid AMC the
amount Active agreed to pay AMC for the goods ordered because Defendant has not paid Active the cash
amounts invoiced. Therefore, AMC is a declared and known third-party beneficiary of Active’s Trade
Credit Usage Agreement with Defendant and has an interest in these proceedings.
17. The Agreement signed by Defendant attaches and incorporates a “Trade Credit Usage
Agreement.” Section 6.4 of the Agreement provides the Trade Credit Usage Agreement is governed by
New York law and that all litigation arising out of or relating to this Agreement shall be brought in the
courts of New York and that each party consents to the jurisdiction and venue of the courts of New York
as well as service process by overnight courier (delivery confirmed).
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AS AND FOR A FIRST CAUSE OF ACTION AGAINST DEFENDANT
(BREACH OF CONTRACT)
18. Active repeats and re-alleges all facts and allegations of the Complaint set forth in
paragraphs 1 through 17, above, including the Exhibits referenced therein, as if set forth at length in this
First Cause of Action against Defendant.
19. Defendant has failed to timely pay the Active invoices for the goods ordered by
Defendant and delivered by the vendor specified in Defendant’s purchase orders. As of the date of this
Complaint, Defendant owes Active a total of $1,139,397.51 with respect to these invoices, exclusive of
any interest or costs.
20. Defendant is in material breach of its contractual obligations to Active.
21. Active is due $1,139,397.51, plus interests and costs of suit by reason of Defendant’s
material breach of contract.
WHEREFORE, BY REASON OF THE FOREGOING, Active requests that this Court:
1) Enter a judgment in favor of Active against Defendant in the amount of $1,139,397.51,
plus interests and costs of suit; and
2) An award to Active such other and further relief as this Court may deem proper.
Terry L. Trantina, Esq.
Associate General Counsel
By:_/S/ Terry L. Trantina_____
Terry L. Trantina
Associate General Counsel
Active Media Services, Inc.
One Blue Hill Plaza
Pearl River, NY 10965
845-732-8658
Attorneys for Plaintiff
Active Media Services, Inc.
Dated: February 27, 2017
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EXHIBIT A
Assignment Agreement
(Schedule A)
Trade Credit Usage Agreement
Between
Active Media Services, Inc.
And
Homedics USA, LLC
Effective As Of: April 14, 2016
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