United States District Court, D. Connecticut
RULING ON MOTION FOR SUMMARY JUDGMENT
R. Underhill, United States District Judge.
case arose from a dispute over an alleged joint venture
between Direct Link CT, LLC (“DLCT”) and Fuling
Plastic USA, Inc. (“Fuling”) to create a
commercial entity called Direct Link USA, LLC
(“DLUSA”). DLUSA was intended to design and
implement a direct sales program to sell in the United States
specialty items, including plastic food utensils, made in
China. The purported partnership broke down and DLCT filed
this case alleging seven causes of action against Fuling:
breach of contract (count one); trademark infringement (count
two); false designation of origin (count three);
misappropriation of trade secrets (count four); interference
with business opportunity (count five); breach of fiduciary
duty (count six); and CUTPA violations (count seven).
See Am. Compl., Doc. No. 31. In response, Fuling
asserted four counterclaims against DLCT: declaratory
judgment of non-infringement of trademark (counterclaim one);
cancellation of the trademark registration (counterclaim
two); breach of contract (counterclaim three); and unjust
enrichment (counterclaim four). See Counterclaims,
Doc. No. 34. Fuling moved for summary judgment on all of
DLCT's claims and all of Fuling's counterclaims.
See Mem. in Supp. Mot. Summ. J. (“Def. Mem. in
Supp.”), Doc. No. 40.
argument on April 4, 2019, I granted Fuling's motion with
respect to counts two, three, four, five, six, and seven of
the Amended Complaint and counterclaim one. See
Order, Doc. No. 53. Further, I denied Fuling's motion
with respect to counterclaims two, three, and four. See
Id. The only remaining issue, therefore, is Fuling's
Motion for Summary Judgment with respect to count one, breach
of contract. For the following reasons, Fuling's motion
Standard of Review
judgment is appropriate when the record demonstrates that
“there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of
law.” Fed.R.Civ.P. 56(a); see also Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 256 (1986) (plaintiff
must present affirmative evidence in order to defeat a
properly supported motion for summary judgment). When ruling
on a summary judgment motion, the court must construe the
facts of record in the light most favorable to the nonmoving
party and must resolve all ambiguities and draw all
reasonable inferences against the moving party.
Anderson, 477 U.S. at 255; Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587
(1986); Adickes v. S.H. Kress & Co., 398 U.S.
144, 158-59 (1970); see also Aldrich v. Randolph Cent.
Sch. Dist., 963 F.2d 520, 523 (2d Cir. 1992) (court is
required to “resolve all ambiguities and draw all
inferences in favor of the nonmoving party”). When a
motion for summary judgment is properly supported by
documentary and testimonial evidence, however, the nonmoving
party may not rest upon the mere allegations or denials of
the pleadings, but must present sufficient probative evidence
to establish a genuine issue of material fact. Celotex
Corp. v. Catrett, 477 U.S. 317, 327 (1986); Colon v.
Coughlin, 58 F.3d 865, 872 (2d Cir. 1995).
when reasonable minds could not differ as to the import of
the evidence is summary judgment proper.” Bryant v.
Maffucci, 923 F.2d 979, 982 (2d Cir. 1991); see also
Suburban Propane v. Proctor Gas, Inc., 953 F.2d 780, 788
(2d Cir. 1992). If the nonmoving party submits evidence that
is “merely colorable”, or is not
“significantly probative”, summary judgment may
be granted. Anderson, 477 U.S. at 249-50. The mere
existence of some alleged factual dispute between the parties
will not defeat an otherwise properly supported motion for
summary judgment; the requirement is that there be no genuine
issue of material fact. As to materiality, the substantive
law will identify which facts are material. Only disputes
over facts that might affect the outcome of the suit under
the governing law will properly preclude the entry of summary
judgment. Factual disputes that are irrelevant or unnecessary
will not be counted. Id. at 247-48. To present a
“genuine” issue of material fact, there must be
contradictory evidence “such that a reasonable jury
could return a verdict for the non-moving party”.
Id. at 248.
nonmoving party has failed to make a sufficient showing on an
essential element of his case with respect to which he has
the burden of proof at trial, then summary judgment is
appropriate. Celotex, 477 U.S. at 322. In such a
situation, “there can be ‘no genuine issue as to
any material fact,' since a complete failure of proof
concerning an essential element of the nonmoving party's
case necessarily renders all other facts immaterial.”
Id. at 322-23; accord Goenaga v. March of Dimes
Birth Defects Found., 51 F.3d 14, 18 (2d Cir. 1995)
(movant's burden satisfied if he can point to an absence
of evidence to support an essential element of nonmoving
party's claim). In short, if there is no genuine issue of
material fact, summary judgment may enter. Celotex,
477 U.S. at 323.
allegations here arise from an alleged joint venture between
DLCT and Fuling to create the commercial entity DLUSA. Am.
Compl., Doc. No. 31 at ¶ 7. Essentially, DLCT alleges
that a joint venture was agreed upon and created, and Fuling
breached the agreement by terminating the joint venture;
Fuling alleges that negotiations broke down before an
agreement was reached and, therefore, no joint venture was
was run by its President Xinfu Hu, and DLCT was run by its
managing member, Frank Lenge, later along with another
member, Tom Melchiorre, who was a “salesperson familiar
with the industry.” Lenge Depo., Ex. E to Mot. for
Summ. J., Doc. No. 41-1 at 44:2-12; Pl. Opp. to 56(a)(1) Stmt
of Mat'l Facts, Doc. No. 47 at ¶ 9. In 2009, Hu and
Lenge met at a National Restaurant Association trade show and
had discussions thereafter about entering into a joint
venture. Pl. Opp. to 56(a)(1) Stmt of Mat'l Facts, Doc.
No. 47 at ¶ 4-5. In its Amended Complaint, DLCT defined
the potential business as one “which included designing
and implementing a direct sales program to sell specialty
items such as plastic food utensils and cutlery which were to
be made in China and in the United States by [Fuling], and
were to be sold to the customers in the United States
through” DLUSA. Am. Compl., Doc. No. 31 at ¶ 8;
Pl. Opp. to 56(a)(1) Stmt of Mat'l Facts, Doc. No. 47 at
¶ 14 (“DLCT would facilitate sales of …
plastic cutlery products manufactured by Taizhou Fuling to
U.S. customers”). The parties “agreed that Fuling
would manufacture, ship and deliver products to customers and
DLCT would facilitate the sale, generate the purchase order
and invoice [and collect payment from] the customer.”
Pl. Opp. to 56(a)(1) Stmt of Mat'l Facts, Doc. No. 47 at
¶ 16. DLUSA was formed on December 5, 2011 by
Fuling's parent company in China, Taizhou Fuling Plastics
Co., Ltd. (“Taizhou Fuling”), in order to
“act as a sales agent for Fuling by facilitating the
sale and payment of products manufactured by Taizhou Fuling
and distributed in the United States.” Id.
DLUSA “served as Fuling's U.S. sales agent”
and gave a portion of sales generated to DLCT. Id.
at ¶ 21.
February 2011, Lenge sent Hu a written business proposal
memorializing the conversations they had about the potential
business agreement and Lenge formed DLCT in October 2011 with
himself and Melchiorre as the only members. Id. at
¶ 6-7, 13; Lenge Depo., Ex. E to Mot. for Summ. J., Doc.
No. 41-1 at 205:22-25. In May 2011, Hu, Lenge, and Melchiorre
“met to discuss each parties' roles” in DLUSA
and in August 2011, the parties “discussed, but never
executed” an agreement about DLUSA. Pl. Opp. to
56(a)(1) Stmt of Mat'l Facts, Doc. No. 47 at ¶ 8-10
(Fuling alleges it was a “draft joint venture
agreement” that was never executed; DLCT alleges it was
a “draft operating agreement for a Delaware [LLC] which
was to memorialize the terms of their joint venture
agreement” that was never executed).
parties dispute what occurred next in the formation and
implementation of DLUSA. See Pl. Opp. to 56(a)(1)
Stmt of Mat'l Facts, Doc. No. 47 at ¶ 11-12. DLCT
alleges that a joint venture agreement was established in May
2011, when “DLCT and Fuling agreed to initiate all
activities of the partners' agreement before final
execution of the DLUSA operating agreement” and that,
even without the executed agreement, “[s]ales and
fulfillment to third parties commenced” and DLCT
“began sales of Fuling's products as performance
under its agreement with Fuling.” Id. DLCT
alleges that the parties formed this “partners'
agreement” in which they “put in place all
necessary terms to commence operations” and undertook a
joint venture. Id. ¶ 22. Further, DLCT alleges
that from 2011 through June 2012, the parties, while
operating under the valid partners' agreement,
“engaged in ongoing negotiations to establish a
Delaware [LLC] which would transform the partners'
agreement from an entity with significant partner liabilities
into an entity which would shield members from
however, alleges that there was no agreement in May 2011, and
that in late 2011 through June 2012, “Fuling and DLCT
engaged in ongoing negotiations related to the parties'
roles, procedures, and terms of the deal” but,
nonetheless, DLCT “began sales efforts of Fuling's
products” after the May 2011 meeting. Id. at
¶ 11-12. Fuling characterizes the negotiations in 2011
through June 2012 as discussions to create the joint venture
and alleges that the parties “exchanged a draft joint
venture agreement and drafts of an operating
agreement.” Id. at ¶ 22. Fuling argues
that those documents “reflect[ed] several unresolved
material terms between Fuling and DLCT” including:
sales exclusivity; sales commissions; Fuling's
contribution of capital; Fuling's sole control of
finances; liability for profits and losses; invoice and
payment procedures; Fuling's final approval of sales and
payment terms with customers; and trademark rights and uses.
Id. at ¶ 23. DLCT, however, argues that those
ongoing discussions and “open items for
resolution” “did not reach or effect the material
terms of the then ongoing partners' agreement between
Fuling and DLCT.” Id.
the parties agree that the operating agreement for DLUSA was
never executed. Id. at ¶ 26. Fuling alleges,
therefore, that there “was never a final joint venture
agreement between DLCT and Fuling.” Id. DLCT
alleges, however, that the parties entered into a valid
“joint venture partners' agreement” based
upon “the significant email and statements and conduct
of the parties … pursuant to which the parties
operated from more than a year”, which established the
“material terms and agreement of the partners”.
Id. Further, DLCT claims that “the agreement
[was] validated by the Doctrine of Part-Performance ...