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HomeMy WebLinkAbout09-8733RITE AID HDQTRS. CORP., vs. VUPOINT SOLUTIONS, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff, NO. c- ' p S?7 3 -3 c N> > CIVIL ACTION - LAW Defendant. NOTICE TO DEFEND You have been sued in court. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this complaint and notice are served, by entering a written appearance personally or by attorney and filing in writing with the court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the court without further notice for any money claimed in the complaint or for any other claim or relief requested by the plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW. THIS OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A LAWYER. IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. Cumberland County Bar Association 32 South Bedford Street Carlisle, PA 17013 Telephone: (717) 249-3166 RITE AID HDQTRS. CORP.., IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff, • NO. vs. VUPOINT SOLUTIONS, CIVIL ACTION - LAW Defendant. AVISO USTED HA SIDO DEMANDADO/A EN CORTE. Si usted desea defenderse de las demandas que se presentan mds adelante en las siguientes paginas, debe tomar acci6n dentro de los pr6ximos veinte (20) dias despuds de la notificaci6n de esta Demanda y Aviso radicando personalmente o por medio de un abogado una comparecencia escrita y radicando en la Corte por escrito sus defensas de, y objecciones a, las demandas presentadas aqui en contra suya. Se le advierte de que si usted falla de tomar acci6n como se describe anteriormente, el caso puede proceder sin usted y un fallo por cualquier suma de dinero reclamada en la demanda o cualquier otra reclamaci6n o remedio solicitado por el demandante puede ser dictado en contra suya por la Corte sin mds aviso adicional. Usted puede perder dinero o propiedad u otros derechos importantes para usted. USTED DEBE LLEVAR ESTE DOCUMENTO A SU ABOGADO INMEDIATAMENTE. Sl USTED NO TIENE UN ABOGADO, LLAME O VAYA A LA SIGUIENTE OFICINA. ESTA OFICINA PUEDE PROVEERLE INFORMACION A CERCA DE COMO CONSEGUIR UN ABOGADO. SI USTED NO PUEDE PAGAR POR LOS SERVICIOS DE UN ABOGADO, ES POSIBLE QUE ESTA OFICINA LE PUEDA PROVEER INFORMACION SOBRE AGENCIAS QUE OFREZCAN SERVICIOS LEGALES SIN CARGO O BAJO COSTO A PERSONAS QUE CUALIFICAN. Cumberland County Bar Association 32 South Bedford Street Carlisle, PA 17013 Telephone: (717) 249-3166 RITE AID HDQTRS. CORP., IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff, NO. D y r g` Vs. VUPOINT SOLUTIONS, CIVIL ACTION - LAW Defendant. COMPLAINT Plaintiff Rite Aid Hdqtrs. Corp. ("Rite Aid"), by its undersigned attorneys, files this Complaint alleging as follows: PARTIES 1. Rite Aid is a Delaware corporation with its principal place of business at 30 Hunter Lane, Camp Hill, Pennsylvania 17011. 2. On information and belief, defendant VuPoint Solutions ("VuPoint") is a is a California corporation with a principal place of business at 17583 Railroad Street, City of Industry, CA 91748. JURISDICTION AND VENUE 3. This court has jurisdiction pursuant to 42 Pa.C.S. §93l(a). 4. Venue in this Court is proper because the cause of action arose in Cumberland County and a transaction or occurrence took place out of which the cause of action arose in Cumberland County. RELEVANT FACTS 5. Rite Aid is a national drug store chain with its principal office in Cumberland County, Pennsylvania. 6. At all times relevant to this Complaint, VuPoint was involved in the manufacture, sale and distribution of consumer electronics including, but not limited to, cameras and camcorders (collectively "Cameras") 7. Rite Aid and VuPoint entered into several agreements regarding the sale of VuPoint Cameras in Rite Aid's retail drug stores. In May, 2005, Rite Aid and VuPoint entered into a Guaranteed Sales Agreement ("GSA") in which VuPoint "guarantee[d] the sale of [VuPoint's] product to Rite Aid at both Customer Service Centers (i.e. distribution centers) and retail locations." A true and correct copy of the GSA, a valid and enforceable written contract, is attached to this Complaint as Exhibit A. 9. Under the GSA, Rite Aid had the right to return all unsold product to VuPoint for a cash refund. 10. Specifically, the GSA provided: If at any time Rite Aid determines in its sole discretion that Vendor's product(s) performance continues to be unacceptable, Rite Aid will have the right to return at Vendor's expense all unsold product(s) to Vendor's facility in return for Vendor's cash payment to Rite Aid for any products for which Rite Aid has paid, but have not been sold. See Exhibit A. 11. Rite Aid and VuPoint also entered into a Rite Aid Returns Agreement ("Returns Agreement") that provided the manner in which VuPoint's products could be returned to VuPoint. A true and correct copy of the Returns Agreement, a valid and enforceable written contract, is attached to this Complaint as Exhibit B. -2- 12. The Returns Agreement permitted VuPoint to direct how Rite Aid should handle damaged, defective, outdated and discontinued goods ("unsaleable product"). See Exhibit B. 13. VuPoint decided that the unsaleable product should be scanned and shipped back to VuPoint and VuPoint agreed to pay a fee for this particular method of disposition. See Exhibit B. 14. VuPoint also agreed to pay freight charges and Vendor Compliance Charges for distribution of VuPoint's product. 15. In addition, the Returns Agreement signed by VuPoint provided that VuPoint would be charged fees for the unsaleable product ("USI unsaleables"), and that such USI unsaleables would be deducted from the amount due to VuPoint. See Exhibit B. 16. VuPoint also entered into a Promotional Funding Agreement with Rite Aid whereby it agreed to fund the marketing and advertising of VuPoint's products. A true and correct copy of the Promotional Funding Agreement dated October 1, 2007, a valid and enforceable written contract, is attached to this Complaint as Exhibit C. 17. Pursuant to the Promotional Funding Agreements, VuPoint agreed to deduct the marketing costs from the amounts owing by Rite Aid. See Exhibit C. 18. VuPoint also signed Rite Aid Incremental Investment Agreements whereby it agreed to fund retail store markdowns, scandowns, fixture displays and manufacturer coupons. True and correct copies of the Incremental Investment Agreements, valid and enforceable written contracts, are attached to this Complaint as Exhibit D. 19. Due to the fees and expenses charged pursuant to the agreements listed in paragraphs 7 through 18 above ("Fees"), as of December 16, 2009, VuPoint's account with Rite -3- Aid has a $135,944.29 negative balance, which is expected to grow after all returns are processed and other account charge backs are applied. 20. On information and belief, the amount due and owing to Rite Aid will continue to increase. 21. As of the date of the filing of this Complaint, VuPoint is in breach of the GSA, Returns Agreement, Promotional Funding Agreement, Incremental Investment Agreement and other related account contracts and agreements because it refuses to pay Rite Aid the negative balance on its account. COUNTI BREACH OF CONTRACT 22. Rite Aid incorporates the averments in paragraphs I through 21 above as if fully set forth herein. 23. As noted in paragraphs 7- 22 above, Rite Aid and VuPoint entered into various valid and enforceable written agreements under which VuPoint agreed to pay certain Fees. 24. To date, VuPoint owes Rite Aid $135,944.29 in Fees. A statement of the account of the negative balances and summary sheets reflecting this amount is attached as Exhibit E. 25. Despite repeated requests, VuPoint refuses to pay the negative account balance of $135,944.29 to Rite Aid. 26. Rite Aid has performed all conditions precedent under the GSA, Returns Agreement, Promotional Funding Agreement, Incremental Investment Agreement and all related agreements under the account. -4- 27. VuPoint is in breach of the GSA, Returns Agreement, Promotional Funding Agreement, Incremental Investment Agreement and all related agreements because it has failed to pay the negative balance on its account. 28. As of December 16, 2009, Rite Aid has suffered damages in excess of $135,944.29, an amount that will increase as additional returns and other Fees are processed, due to the breaches of VuPoint. WHEREFORE, Rite Aid requests judgment in an amount in excess of $135,944.29, plus interest, costs and all other amounts deemed appropriate by the Court. COUNT II UNJUST ENRICHMENT 29. Rite Aid incorporates the averments in paragraphs 1 through 28 above as if fully set forth herein. 30. In the event VuPoint contends no contractual relationship exists, Rite Aid is entitled to recover the outstanding amounts to prevent VuPoint from being unjustly enriched. 31. As is customary in the industry, VuPoint was to pay for certain Fees associated with the sale of its product. 32. VuPoint owes Rite Aid $135,944.29 in Fees. 33. Rite Aid has a reasonable expectation to receive the Fees incurred. 34. VuPoint reasonably should have expected to pay the Fees as such Fees are custom in the industry. 35. It would be inequitable for VuPoint to receive the benefit of the $135,944.29 still owed to Rite Aid. 36. In the event the contracts are deemed to be unenforceable, Rite Aid has no adequate remedy at law. -5- 37. Rite Aid is entitled to collect the outstanding balance, plus interest, from VuPoint under the doctrine of unjust enrichment. -6- WHEREFORE, Rite Aid requests that judgment be entered against VuPoint in the amount of $135,944.29 plus interest, costs and all other amounts deemed appropriate by the Court. Respectfully submitted, Brian P. Downey, Esquire (PA 59891) Frederick Alcaro (PA 91555) PEPPER HAMILTON LLP 100 Market Street, Suite 200 P.O. Box 1181 Harrisburg, PA 17108-1181 717.255.1155 717.238.0575 Fax downeyb@pepperlaw.com alcarof@pepperlaw.com Date: December 18, 2009 Attorneys for Plaintiff Rite Aid Hdgtrs.Corp. -7- VERIFICATION Allen Brown signs this Verification on behalf of Rite Aid Hdqtrs. Corp., and does hereby verify that the foregoing Complaint was prepared with the assistance and advice of counsel, and in reliance upon counsel's advice; that the document, subject to inadvertent or undiscovered errors, is based upon and therefore limited by the records and information still in existence, presently recollected and thus far discovered in preparation of this document; and that subject to the limitations set forth herein, the statements contained in this document are true and correct to the best of his knowledge, information and belief. The language of the foregoing document is that of counsel. It is understood that the statements herein are made subject to the penalties of 18 Pa. C.S. § 4904 relating to unsworn falsification to authorities. Ntm b ?w-% ALLEN BROWN Date: December 16, 2009 ,? ?, b t'+ 06/26/05 08:02 PAZ 717 731 6762 RITE AID CAT NAN 0 021 RITE AID CORPORATION GUARANTEED SALES AGREDIE.NT Rite Aid will consider Vendor"s product(s) for distribution and sale under the terms and conditions set forth in this Agreement. In consideration of Rite Aid's agreement to review a new catty into its mix, as Well as in consideration of the mutual premises contained herein, the parties agree as follows: 1. Vendor will guarantee the sale of Vendor's product(s) to Rite Aid at both Customer Service Centers (i.e. distribution centers) and retail locations. 2. During the first one hundred twenty (120) days, or such other period as Rite Aid may determine in its sole dlscreliort (it being understood by Vendor that Rite Aid nay tam this Agreement in its sole discretion at arty time, for any reason wbatsoeu+er) following the date if tin Vendor's first delivery of product(s) to Rite Aid (the "Review (i period"), Vendor's account will be on a review status to permit Rite Aid to assess the performance of the product(s). During tluc Review Period, Rite Aid will pay only for those product(s) that are actually sold, and Rite Aid's payment will be reduced by any and all cash discounts or other debit amounts ('including, but not limited to, advertising, displays, markdowns and price protection) due to Rite Aid. if at the end of the Review Period, Rite Aid ddermWM in its sole discretion, that the Vendor's product(s) is not selling at as acceptable rate, then Rite Aid will have the right to (a) require Vendor to review and modify Vendor's marketing plan to ensure future success and (b) extend the due date of the original invoice submitted by Vendor. Rite Aid also has the right to ' require a cash payment, as described in paragraph (3) below. The foregoing rights arc not exchnive. At the end of the Review Period, Rite Aid may terminate this Agreement, place the Vendor on Rite Aid's customary payment terns, or extend the Review Period as Rite Aid, in its sole discretion, so desires. 3. If at any time Rite Aid determines In its sole discretion that Vendor's product(s) performance continues to be unable, Rite Aid will have the right to return at Vendor's expense all unsold product(s) to Vendor's facility in retum for Vendor's cash payment to Rite Aid for any products for which Rite Aid has paid, but have not been sold. i vendor's payment to Rite Aid shall be made (a) by who transfer of immediately available funds or certified check, and (b) no later than fifteen (15) days after Rite Aid has returned the product(sj Vendor acknowledges and agru cs that in the event that any of Vendor's allowances are funded with "free product" from Vendor, that "free product" will be treated identically to product purchased from Vendor by Rite Aid. This includes„ but is not limited to, returns of this product to Vendor. 4. Upon settlement of Vendor's account, all outstanding invoices will be paid promptly, less any and all cash discounts or other debit amounts dux to Rite Aid. RwwbWWU2M 08/26/0 09!02 FAI 717 731 1732 RITE AID CAT HAV ® 023 S. The terms and conditions of this Agreement are in addition to, and in no way limit, Rite Aid`s rights and =&e$ under Rite Aid's Vendor Profile, standard terms and conditions or purchase orders. In the event of inconsistency between the tabus and conditions of the Agreement and any of the foregoing documents, this Agreement will 90vC . 6. The parties agree that Pemsylvanla law govoras this Agreement not withstanding its couNds of law provisions. Arty lawsuit brought with regard to this Gmranteed Sales Agreement will be vcnued in the Court of Common Pleas, Cumberland County, Peanrytvania. 7. Thee pia specifically agree that 13 Pa. C.S.A. 12326 & 2327(b) are inapplicable and that Vendor will accept returned goods m their "as-e condition. 8. All returns are at risk of vendor. 9. Vendor can not assign any product covered by this Agreement to any third party without the express written consent of a Vice President of Category Management. Rite Aid is enthusiastic about the opportunity to distribute product(s) into the marketplace. Rite Aid wishes you every success In your endeavor to provide a product that is unique. Please allow Rite Aid to assist you in your distnbWon needs by arranging for a duly authorized officer to sign and data this Agreerncat on behalf of your company, and return the executed letter to Rite Aid's Merchandising DepartmcnL Vendor: By. Authorized Signature Date: ?-3 Title: /??OFl1 /T i ROWM2M I_ ?? ?y `1i IUD 06/26/05 06:59 FAX 717 731 4732 RITE AID CAT NAN Olb .I RITE AID RETURNS AGREEMENT Please note: A Ewarab Returns AummW must be no out for each vendor number. Company "M Vup*t Solutions Contact Name: Lauren Kukkamaa____?_ Phone #561.575,2110 Fax #587.748.0450 Vendor Number: E-Mail Address: LaunlnK®vupointsokMons corn _____,_ kwoioe Address: Shipping Address: 17513 Ralboed Sheet 435 South 0 Street l Chy off. CA 9174E Ctry of lodtnvy, CA 91746 Category Manager. TERMS OF /40REEMENT• A. Utlsateable Merchandise r 1. AI! vendors will be charged the folkwing proaaing Tees for damaged, detective, outdated. end discontinued ` goods. These fees are based on the findings from the Joint Industry Task Force Study (JIRx DPC (Direct Product Cost) $0.085 Post Damage $0.111 Ops through Scan: 50.101 $0.297 2 All vte xkW3 must delarmine a method of disposition fa their unsaleable products. Based on the COOODESCRIPTIONS listed below. the vendor repressntattve wM check pre ft method his/her company has authorized Rite Aid to use. The additional charge. shown in 0 at the end of the description. will be added to the charges above. cow DESCRIPTION OR COSTI COPT „_ Sears and dispoeMon b left up to the discretion of Rae Aid ($0.020)• DM_ Scam and donate ($0.030) ROPT San, Hold. Venda RevtewlCenter Option (30.127) RDON ` Scan. Hold, Vendor Review, Donate ($0.137) RTAK Scan, Hold, Vendor Review, Take ($0.174) RSHP _ Scan. Hold, Vendor Review, Ship ($0.188) Nob. AA Vendor Review marelrandlse will be held ihr21 drtys after Invoke dab tbrnview. At that titres N ? M rev brwd, or1?no decision has boon pro vided by the menufech~ the prodrxl wfii be disposed of at Me d 1scretton of Me Aid SHSK _ g San and ship back to vendor ($0.180) OPEN RAN REQUIRED WITH THIS OPTION RAM 2050430t.KA . Rev 07raM 08/26/03 09:00 FAX 717 731 1732 RITE AID CAT NAN 018 Rite AM Retums Agreement Pace 2 3. All proddxcia, will be billed at Rile Aid's ht cost + JIR billing indoors (DPC, Post Damage Handling, Rec Charges. DapoOm Charges) union otherwise agreed to in writing by Rlte Aid Corpornion. Vendor bU ft Is not to exceed 130% of Rtts Mira fist east 4. a All changes b30pdo? sag Inwritin Aid Corporation. Approved pocky changes will take within r approval. 5. All vendors will agree to orward a copy of their current national policy regarding recdamadon to be 1 reviewed by Rb Aid Corporatism. This will be sent to: RKe Aid Corporation 30 Hunter Lane Camp Hill, PA 17011 Attention: Manager, Front End Returns B. Recap Merchandise «Plesse note: The dispositions on page 1 pQ NOT apply to redacts. A separate agreement MUST be filled out for all recaps at the time the tscap b being aWvated. This allows a vendor to have a separate dispoeltion on recaps than they have on damaged and outdated return. 1 The sipnahm below by the appropriate Category Manager of Rite Aid Corporation and the vendor representative of said company denote their understanding and aceeptence of the above agreemea i L 0j Signaturr?e?(}Vendor epnneennta?Urve) ?Date S rs by . ) pa ?^"''? '''•?? />K- Rlts Aid Corporation Company Rev 07r= ? x? r? ?? ? Page 1 of 1 Contract # 0204,920 i Rite Aid Promotional Funding Agreement Fiscal Year 2009 Ccmpany llama: yUPOtNT SOLUTIONS B-Iling Address: ATTN: MICHELLE YANG Category Ma Hagar, HUBER, JAY 17583 RAILROAQ STREET Vendor it: 39896 Contact CITY OF INOUSTRY CA 91748 Dick Onrgne Email Phone. . Fax*. 3a1748o4+sp vUPOIQINT SOLUTIONS V PP prorLU nod (Supplier) t'"00Y agrees to participate in Rite Aid's Fiscal Yea@009 be d• r 00 % of Rite Aidp s ra In the amount indicated herein. The amount to be Not purr February 28. 2009 asesof Suppileu'a Paid 0 the Supplier will belowa yhe 200 (but not lose than dthe M evelop atlntum Promotional betw?n r'? and Funding Will be u nFunding Coor set pforth rop by Supplier's Rigs Aid Cat_ and olk g ? rnaricetin Products in?toAid..s?otaa y np Pro?notfn and advancin ®MPPoK deonted appropriate dirrnnulion of any the sale* negotlgtsd prfclnS' payment terms . volume Incentives, rind not in substitution for or purchase inc®rrtivse, fundin rebates, other contract tuKl hale, new iv 9 for retail markdov.Tte, off-shelf die Singie items. new store allowances, Health R e source vice Partip Check Rebate Participation, Rite Aid Health and t3eau ?? Rite Ad pro9rgms n tY Expos, Rite Aid Foundation Charity paypn Trade Show ow existing or that msy be developed from time to time. Golf Classic, or other The Suppliers Minimum Promotional Funding Commitment is firm and non-cancelable. Proof of or about of the motional Funding Canmltment wig ?'? o+virlq by Rite Aid to 8/1!08 , 11/1/08 and 2/1/09 occur In 4 equal ina6slmMts on The Promotional Fundi February 28, 2009 n9 basodon Not purchases between March 2, 2008 below. the additional {tindl lust Net Purchasea exceed the Fore and n9 will be billed and deducted in the final Invoicing Net Purchases set faith MINHNIU g an or about 3/1/08. M PROMOTIONAL FUNDING COMMITMENT: FORECAg-rE0 5 ?u?Mn=ra san.x,i.. ?r..r.,,.? t!j./ (?•?. $2,800 Wo Rift Ale C°bpory 140.0 c.nte0 Nsmr. ?./f wJ 7'? (?? L ?!/?N! f'? t R!4 AM V- pr?yRr1? ?I " E,?,b,?-D N c r? o. t-? . u ?- I {i i h fit T i fil- >s Lor F ? d s Q E 3 W v p N ?r a I I O a g Page 1 of 1 s 3 V a An I!vm fill I ;;f f.. 8 s 8 8 i i Page 1 of 1 fill fir r s i a? s 8 All fill i s ¢ a ? g B p a P ? fl r? Page 1 of 1 I f g mall a SL a 3 s R? gr i 4 a 0 k a m F m s a? 3 :a i v '? Page 1 of 1 Ar C ? S, Af N ^ V O /' 1 Inc ° C r ? rt W n Q O J J fx?,?,+ AL_ STA*E I. E6AL"' 800-222-0.510 VUPOINT SOLUTIONS v#39898 Statement of Account as of 11-25-09 Descrtpt(on Gross Amt ,Shortage Prlulna N ft Ant Advertising Allowances Total $ (208,728.57) $ $ $ (208,728.57) B/E Conversion Display Funding Total $ (50,000.00) $ $ $ (50,000.00) Connolly Audit Total $ (34,964.00) $ $ $ (34,964.00) Connolly Primary Post Audit Total $ 34,964.00 $ $ $ 34,964.00 Direct Warehouse Returns Total $ (345,729.30) $ $ $ (345,729.30) Freight Charges Total $ (5,253.01) $ $ $ (5,253.01) Invoice Total $ 1,532,937.72 $ (80,642.92) $ (20,321.87) $ 1,431,972.93 Invoice Audit- PRG Total $ (2,000.00) $ $ $ (2,000.00) Offset Transaction Total $ 00,000.00 $ $ $ 100,000.00 Single Check Rebate Escrow Total $ (18,274.46) $ $ $ (18,274.46) SMD Internal Post Audit Total $ (2,230.00) $ $ $ (2,230.00) Store Markdowns Total $ (35,185.00) $ $ $ (35,185.00) TPR Markdowns Total $ (2,777.50) $ $ $ (2,777.50) Trade Show Even Year Total $ (22,500.00) $ $ $ (22,500.00) USI Recalls Total $ (558,114.16) $ $ $ (558,114.16) USI Unsaleables Total $ (408,945.22) $ $ $ (408,945.22) Vendor Compliance Charge Total $ (8,180.00) $ $ $ (8,180.00) Grand Totals $ (34,979.50) $ (80,642.92) $ (20,321.87) $ (135,944.29) - Includes Hold Amount C:\Documents and Settings\downeyb\Local Settings\Temporary Internet Files\OLK13D\[Vupoint Solutions v#39898 11-25-09 as1 Summary Page 1 of 1 F 25g PEC ?. r y c? t