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Hardwire, LLC v. Zero International, Inc.

United States District Court, D. Delaware

October 14, 2014

HARDWIRE, LLC, Plaintiff,
v.
ZERO INTERNATIONAL, INC., Defendant.

REPORT AND RECOMMENDATION

CHRISTOPHER J. BURKE, Magistrate Judge.

This case arises out of a breach of contract action filed by Plaintiff Hardwire, LLC ("Plaintiff" or "Hardwire") against Defendant Zero International, Inc. ("Defendant" or "Zero") in the Superior Court of the State of Delaware, in and for New Castle County ("Delaware Superior Court"). (D.I. 1, ex. A (hereinafter, "Complaint")) Zero removed this case from Delaware Superior Court pursuant to 28 U.S.C. § 1441. (D.I. 1) Presently pending before the Court is Zero's motion to dismiss Hardwire's claim pursuant to Federal Rules of Civil Procedure 12(b)(2) and 12(b)(5) (the "Motion").[1] (D.I. 4) For the reasons that follow, the Court recommends that Zero's motion be DENIED.

1. BACKGROUND

A. Factual Background

1. The Parties

Plaintiff Hardwire is a closely held Delaware limited liability company, with its principal place of business in Pocomoke City, Maryland. (Complaint at ¶ 1) It is in the business of infrastructure reinforcement. ( Id. )

Defendant Zero is a New York corporation with its principal place of business in the Bronx, New York. (D.I. 1 at ¶ 9; Complaint at ¶ 2) It manufactures, inter alia, fire resistant materials that increase in volume when exposed to heat ("intumescent materials"). (Complaint at ¶ 8 & ex. A)

2. 2011-2012 Communications Prior to the Submission of the November 6, 2012 Purchase Order (Purchase Order 84310)

Hardwire was hired by a customer to improve fire resistance for a particular piece of the customer's infrastructure (hereinafter, the "Project"). ( Id. at ¶¶ 5-6) In furtherance of the Project, Hardwire sought to subcontract for materials meeting certain fire resistant specifications. ( Id. at ¶¶ 7-8)

Hardwire and Zero began their relationship on August 16, 2011, when Hardwire's Vice President, Skip Ebaugh ("Ebaugh") and Zero's President, owner and Chief Executive Officer, Elias Wexler ("Wexler") met at Zero's offices in New York. (D.I. 22, Supplemental Declaration of Elias Wexler (hereinafter "Wexler Supp. Decl."), at ¶¶ 1, 8) The two men discussed whether Zero would be able to supply Hardwire with the type of fireproof materials Hardwire sought for its work on the Project. ( Id. at ¶ 8)

Thereafter, on multiple occasions in 2011 and 2012, Hardwire ordered and received from Zero small amounts of intumescent materials, for the purposes of research, development and testing. ( Id. at ¶¶ 10-16 & ex. A; D.I. 23, Declaration of Timothy Robert Keller In Support of Hardwire LLC's Opposition to Zero International, Inc.'s Motion to Dismiss (hereinafter, "Keller Decl."), at ¶ 3) Through discussions between the parties during this time period, it became apparent that Hardwire's needs for the Project would be best met by Zero's FS3003 INTUMET materials. (Wexler Supp. Decl. at ¶ 15)

Thereafter, Wexler and Ebaugh met in person at Zero's New York office on May 12, 2012, and then again on August 23, 2012. ( Id. at ¶ 17) The purpose of these meetings was to discuss the possibility that Hardwire might make a much larger order of Zero's fireproof materials (as opposed to the smaller purchases that Hardwire had already made for research, development and testing purposes). ( Id. ; Keller Decl. at ¶ 4) Timothy Keller ("Keller"), a Manager in Hardwire's Bridge and Infrastructure Armor department, also attended the August 23, 2012 meeting with Ebaugh on Hardwire's behalf. (Keller Decl. at ¶¶ 1, 5)

Three days before that August 23, 2012 meeting, on August 20, 2012, Ebaugh sent Wexler an e-mail setting out Hardwire's agenda for the meeting; the e-mail stated that Hardwire would like "to discuss the upcoming project, material availability, T&C's, etc." (Wexler Supp. Decl. at ¶ 18 & ex. B; Keller Decl. at ¶ 5) According to Keller, the abbreviation "T&C's" referred to Hardwire's "Standard Terms and Conditions for Purchases" (hereinafter "Standard Terms and Conditions") - a document referenced further below that had not been discussed or utilized in the parties' prior dealings. (Wexler Supp. Decl. at ¶¶ 12-16; Keller Decl. at ¶ 5)

The parties have each provided descriptions of what actually occurred during the August 23, 2012 meeting. (Wexler Supp. Decl. at ¶¶ 19-20; Keller Decl. at ¶ 6) In Wexler's supplemental declaration, he states:

During the August 23, 2012 meeting, Ebaugh and I discussed in even greater detail the terms and conditions of Hardwire's anticipated order, including the particular product they had decided to order for the project (product #FS3003), the precise specifications for the product, the quantity desired, the price per unit, and the manner and method of delivery. Ebaugh confirmed with me at this meeting that Hardwire would require the material to be a non-standard, custom width. I confirmed with Ebaugh that Zero would be able to accommodate this request, but that due to the nature of the custom order. Hardwire would have to purchase custom-sized and custom-assembled bags to accommodate the fireproof materials.... Consistent with our prior discussions and Hardwire's prior orders, during my August 23 meeting with Ebaugh, we did not discuss, negotiate or agree to anything concerning the selection of a forum to adjudicate any dispute that might arise between our companies. This was never part of our talks, and it was never proposed or accepted as a term or condition of [Hardwire's] order.

(Wexler Supp. Decl. at ¶¶ 19-20) In his declaration, Keller states:

At the meeting, Mr. Ebaugh and I mentioned Hardwire's terms and conditions to Mr. Wexler. Indeed, Hardwire's Terms and Conditions were specifically mentioned as an agenda item for this meeting in the [August 20, 2012] e-mail.... At the meeting, Mr. Ebaugh and I informed Mr. Wexler that Hardwire would be issuing a formal purchase order at the appropriate time in Hardwire's project. In this respect, I dispute the characterization of the August 23rd meeting as set forth in [Wexler Supp. Decl. at ¶ 20]. Although it is true that the attendees at that meeting did not specifically discuss a forum-selection clause, Mr. Ebaugh and I did tell Mr. Wexler that this upcoming large order needed to include Hardwire's Standard Terms and Conditions. Mr. Wexler did not object or voice any concerns regarding Hardwire's Standard Terms and Conditions.

(Keller Decl. at ¶ 6)

After the August 23, 2012 meeting, Ebaugh requested that Wexler provide him with a written price quote; Wexler sent Ebaugh the quote on September 4, 2012. (Wexler Supp. Decl. at ¶ 21 & ex. C) The quote, a one-page document, states that Zero would sell 25, 248 square feet of FS3003 INTUMET materials at $4.68 per square foot, and sets out a price discount schedule. ( Id. )

From September 13 to 18, 2012, Ebaugh and Wexler engaged in further discussions regarding the order. For example, Ebaugh and Wexler discussed the precise specifications Hardwire sought, including: (a) specific dimensions for the custom materials ("39.375" width × 79.25" length ×.125" thickness"); (b) the requested color for the product ("black or whatever is the quickest'"); (c) Hardwire's requested delivery dates for the first shipment of the materials; and (d) the inclusion of custom bags to ship the materials. (Wexler Supp. Decl. at ¶ 22; Keller Decl. at ¶ 11) Wexler then ordered the custom bags. (Wexler Supp. Decl. at ¶ 23) On November 2, 2012, Ebaugh contacted Wexler by e-mail to inform him that the dimensions of the discussed materials would have to change in width from a width of 39.375" to a width of 31". ( Id. at ¶ 24)

Then, on November 5-6, 2012, Wexler and Ebaugh engaged in an e-mail exchange regarding the approximate amount of fireproof materials that Hardwire would require and the unit price of those materials. ( Id. at ¶ 25 & ex. D) The e-mail conversation, as set out in the record, is as follows:

Wexler to Ebaugh, November 5, 2012, 1:55 p.m.: "Any width is fine. We do not purchase feet, but pounds. We have a minimum of 500 lbs and so the quantity in feet will vary."
Ebaugh to Wexler, November 5, 2012 [the time is unclear]: "We will need approximately 21, 00 linear feet of product. Was this amount for the whole order?"
Wexler to Ebaugh, November 5, 2012, 3:33 p.m.: "I do not know. As I said we do not purchase in feet but in pounds. We will also need to experiment with this wide material and so I cannot estimate yet before we try."
Ebaugh to Wexler, November 5, 2012, 11:55 p.m.: "Estimate what? We have bid a project at $4.60/ft2 based on your previous quote."
Wexler to Ebaugh, November 6, 2012, 8:14 a.m.: "I am sorry I thin[k] I misunderstood your original question. Our price of 4.60/sqft will not change."
Ebaugh to Wexler, November 6, 2012, 4:20 p.m.: "Thank you."

( Id., ex. D)

3. The Submission of the November 6, 2012 Purchase Order (Purchase Order 84310) and the Forum Selection Clause

On or about November 6, 2012, Ebaugh sent Purchase Order number 84310 (hereinafter, "Purchase Order 84310") to Wexler at Zero's New York office. (D.I. 9, ex. 8; Wexler Supp. Decl. at ¶ 28; Keller Decl. at ¶ 7) Purchase Order 84310 called for Hardwire to purchase FS3003 INTUMET materials ...


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