Smith & Associates Litigation Update

July 15, 2015 | posted in: Legal and Business Articles & Blog | by

Watch out for the Fine Print

As a result of a vigorous defense against claims brought by Hardwire LLC in multiple jurisdictions, firm client Zero International, Inc. obtained an unusually favorable settlement – the plaintiff, Hardwire, made a payment to defendant Zero International, Inc.  The parties agreed to settle the pending litigation Hardwire, LLC v. Zero International Inc., in the United States District Court for the District of Delaware, C.A. No. 1:14-cv-0054-LPS.

Represented by E. David Smith, Zero International forcefully defended the lawsuit and stood by its products as meeting the highest standards and quality in the most demanding fire safety applications.

Zero International first blocked the initial complaint filed by Hardwire in Federal Court in Maryland.  A subsequent complaint filed by Hardwire in Delaware State Court was removed to Federal Court in Delaware.

Hardwire tried to use a forum selection clause buried in pages of fine print attached to a purchase order to force Zero International, a New York company, to defend itself in Delaware.

The matter settled at the motion to dismiss stage while Zero’s Objections to the Report and Recommendation of Magistrate Judge Christopher J. Burke were pending before District Court Judge Leonard P. Stark.  The Magistrate Judge’s Report
and Recommendation has subsequently been cited by other court decisions for its clear recitation of legal principles around forum selection clauses in Uniform Commercial Code cases.

“This result is truly exceptional,” said E. David Smith, Esq., counsel for Zero International.  “We were impressed by our client’s clarity about this case and his commitment to bringing the best products to the marketplace, especially in fire safety and national security.  Mr. Wexler was unwilling to accept anything less than complete vindication and we are grateful to have had the opportunity to be of service to his company and bring our 19 years of experience in litigation and transactions to accomplish the vindication Zero deserves.”

According to Zero’s Delaware counsel, David Eagle:  “I have been assisting counsel in the Delaware courts for over 20 years, and I was especially impressed by the diligence and skill of Mr. Smith and his team in bringing this case to a successful conclusion for the client.”

“This case drives home a number of important lessons for our corporate and business clients,” said Mr. Smith.  “First, boiler plate contract language with onerous terms in fine print on purchase orders is best explicitly rejected to avoid being dragged into distant courts and then forced to fight a battle under Uniform Commercial Code (UCC) § 2-207 to resolve the issue of which terms should be binding.  Second, emails have become easy ways to do business but an abbreviated reference can become a major issue later on in a contract dispute.  In this case, the author of a key email was no longer employed by the plaintiff and the court was trying to deduce what a passing reference to ‘T&C’ meant and what terms and conditions were likely discussed at a later meeting.  Clients may move forward based on the emails but may not really be in as much agreement as they hope they are.  Finally, on the litigation strategy front, there is a common misconception that it is not a good idea to object to a magistrate’s report and recommendations because the objecting party may have to later appear before the magistrate.  In this case, objecting was really in the best interest of the client and my belief is that a better litigation strategy is to do what is right and the court will respect that.”“Our products are unmatched and unparalleled in quality as has been proven repeatedly, in each and every test and application, to be of the highest quality.  We are pleased that we were able to reach the result where the plaintiff is making a payment to our company, Zero International, the Defendant,” said Elias Wexler, President of Zero International.

Zero International was represented by E. David Smith, Esq., of Smith & Associates, based in New York City and New Jersey, in both the Maryland and Delaware actions.  David Eagle, Esq., of Klehr Harrison Harvey Branzburg LLP, acted as local counsel in the Delaware action.  Hardwire LLC was represented by Mark Simanowith, Esq., and Lucian Murley, Esq., of Saul Ewing.

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