IN THE CIRCUIT COURT OF THE 11 TH JUDICIAL CIRCUIT IN AND FOR MIAMI-DADE COUNTY, FLORIDA GENERAL JURISDICTIONAL LEVEL

CASE NO.: 2011-023212-CA-Ol DILLIGAF USA, INC., Plaintiff, vs. MPS ENTERTAINMENT, LLC.,

A New Jersey Limited Liability Company, and MICHAEL SORRENTINO, individually. Defendants/Counter vs. DILLIGAF USA, INC., Counter Defendants
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Plaintiff

DEFENDANT'S ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS Defendants, MPS Entertainment, LLC, a New Jersey Limited Liability Company

("MPS"), and Michael Sorrentino ("Sorrentino"), hereby file their Answer, Affirmative Defenses and Counterclaim as follows: ANSWER 1. 2. 3. 4. The allegations of Paragraph 1 are admitted. The allegations of Paragraph 2 are admitted. The allegations of Paragraph 3 are admitted. The allegations of Paragraph 4 are admitted.

5. 6. 7. 8. 9. 10. 11.

The allegations of Paragraph 5 are admitted. The allegations of Paragraph 6 are adopted by reference. The allegations of Paragraph 7 are admitted. The allegations of Paragraph 8 are admitted. The allegations of Paragraph 9 are denied. The allegations of Paragraph 10 are denied. The allegations of Paragraph 11 are admitted to the extent that it states the terms

of the Agreement, however, Defendants deny that they are further obligated under the terms of the Agreement for the reasons set forth in the Affirmative Defenses, below. 12. 13. The allegations of Paragraph 12 are denied. Defendants have no knowledge of the allegations contained in Paragraph 13 and

therefore deny same. 14. 15. 16. 17. 18. The allegations of Paragraph 14 are denied. The allegations contained in Paragraph 15 are incorporated by reference. The allegations of Paragraph 16 are denied. The allegations of Paragraph 17 are denied. The allegations of Paragraph 18 are denied. AFFIRMATIVE DEFENSES 19. As its first affirmative defense, Defendants assert that Dilligaf has breached the The allegations

terms of the Agreement as described in greater detail in the Counterclaim. contained therein are adopted herein by reference.

20.

As its second affirmative defense, Defendants assert equitable estoppel, in that and concealed material facts regarding its ability to design,

Dilligaf made false representations

develop, market and distribute the "Joint Products" contemplated under terms of the Agreement. 21. As its third affirmative defense, Defendants assert failure of consideration as

described in greater detail in the Counterclaim. 22. As its fourth affirmative defense, Defendants assert that Dilligaf failed to mitigate

any damages, caused by Defendant's alleged breach. 23. precedent. 24. 25. 26. As its sixth affirmative defense, Defendants assert laches. As its seventh affirmative defense, Defendants assert mutual mistake. As its eight affirmative defense, Defendants assert novation, in that the parties As its fifth affirmative defense, Defendants assert failure of numerous conditions

orally agreed to modify the terms of the Agreement to alleviate any further obligation on the part ofDilligafto continue to develop, market, and promote "Joint Products" and to release MPS and

Sorrentino from the pledge of rights in return. 27. As its ninth affirmative defense, Defendants assert set off and recoupment based

on the damages set forth in the Counterclaim. 28. As its tenth affirmative defense, Defendants assert fraud in the inducement, in that its financial, artistic, creative, production and marketing

Dilligaf intentionally misrepresented

abilities to fulfill its obligations pursuant to the terms of the Agreement. 29. As its eleventh affirmative defense, Defendants assert waiver
111

that Plaintiff

abandoned all efforts to proceed with production of the Joint Products which is tantamount to a rescission on the part of Dilligaf, which rescission was accepted by MPS and Sorrentino.

30.

As its twelfth affirmative defense, Defendants assert that Dilligaf failed to provide

notice to Defendants as required by the Agreement. 31. Having answered the Complaint and having denied the material allegations defenses, Defendants, MPS and

contained therein, and having asserted valid affirmative

Sorrentino, ask this Honorable Court to enter verdict in their favor and against Dilligaf and to award Defendants their reasonable attorney fees as may be incurred by Defendants to defend this action pursuant to Paragraph 11(L) of the Agreement. DEMAND FOR TRIAL BY JURY Defendants MPS and Sorrentino hereby demand that all matters so triable by jury be so decided. COUNTERCLAIM 1. Counter Plaintiffs, MPS and Sorrentino, hereby files their Counterclaim against

Dilligaf and in support thereof would say: PARTIES AND JURISDICTION 2. This is an action for damages in excess of $15,000.00 exclusive of interest, costs

and attorney fees. 3. Plaintiff, MPS, is a New Jersey Limited Liability Company which is owned and engaged in the business of exploiting trademarks and products

controlled by Sorrentino,

developed or endorsed by Sorrentino. 4. Jersey. 5. Defendant, Dilligaf, is a Florida corporation with its principal place of business in Sorrentino is an individual over the age of majority who is a resident of New

Miami Dade County, Florida and elsewhere.

6.

Jurisdiction is appropriate in this county because Defendant, Dilligaf, is engaged

in business in this county as a Florida corporation and pursuant to the terms of the written Agreement attached to the lawsuit, as provided in Paragraph 11(i) of the Agreement. 7. This Court also has jurisdiction over the non contractual claims asserted herein

because the acts of Dilligaf occurred here, in Miami-Dade County. GENERAL ALLEGATIONS 8. MPS owns trademarks for use of the mark "The Situation" as set forth in the

certificates of registration, attached hereto as Exhibits A through D, and here after called the "Mark". 9. Sorrentino is a celebrity and a member of the cast of the television show called

the Jersey Shore, who has developed and/or endorsed a number of products and/or commercial ventures, using the Trademarks. 10. On or about early 2010, Sorrentino and MPS were approached by representatives

of Dilligaf who represented to Sorrentino that Dilligaf had the capabilities to create, design, market and sell a line of clothing products designed to capitalize upon the celebrity status of Sorrentino, the Trademarks, and which products would be specifically approved by Sorrentino, and which are called "Joint Products" in the Agreement. 11. Based upon those representations, MPS and Dilligaf entered into the Joint

Marketing and Sales Agreement dated May 19, 2010 and amended same on July 14,2010, a true and correct copy of which are attached hereto as Exhibit E, and hereinafter collectively referred to as the "Agreement". 12. Each of these representations tuned out to be untrue.

COUNT I - Breach of Contract 13. Counter Plaintiffs reallege the allegations contained in paragraphs 1 to 12 above

and further allege: 14. Pursuant to the terms of the Agreement, Dilligaf had a number of obligations to

MPS which included the obligation and duty to: A. Develop, design, create market, promote, distribute and sell the Joint Products, which were defined as new apparel, t-shirts, hats, activewear, accessories, and other novelty and promotional items designed by Dilligaf in conjunction with Sorrentino and specifically approved in writing as Joint Products by MPS and Sorrentino. Such Joint Products were intended to be referred to as the "Michael Sorrentino Line". Create a marketing campaign for the promotion, marketing, and distribution of the Joint Products developed within the Michael Sorrentino Line. Develop a website for the marketing and promotion of the Joint Products. Arrange for promotional appearances by Sorrentino at Dilligaf s retail store in Lake George, New York to help spur the retail sales of the Joint Products. Create a mutually agreeable photo shoot, to implement campaign for the Joint Products. a marketing

B.

C. D.

E.

F. G.

Design and maintain a website for the sale of the Joint Products. Process all orders and payments for the Joint Products that originated from the website. Make the Joint Products available for sale at Dilligaf's retail stores. Account and pay to MPS profits derived from the sale of the Joint Products at Dilligaf's retail store. Provide Sorrentino (at no charge) a reasonable supply of the Joint Products for his personal use and for promotional spots. Create a line of products consisting of a minimum of 5 designs to be submitted to and to obtain approval by MTV Networks to insure that the

H. I.

1.

K.

Joint Products did not compete with merchandise of MTV Networks bearing Sorrentino's name, likeness and his trademark "The Situation". L. Pay MPS the sum of $1,000.00 per month for each successive month, commencing upon initial sale of the Joint Products for retail sale. Pay to MPS the sum of $15,000.00 upon approval of a minimum of 5 designs by MTV. Pay to MPS $10,000.00 following release for retail sale of the first of the Joint Products. Pay MPS the sum of $6,500.00 for each appearance by Sorrentino, at "signing and promotional events" arranged by Dilligaf and to pay all reasonable travel expenses to be incurred by MPS and Sorrentino in connection with same. Account and pay to MPS 50% of the "distributable net profits" earned from the sale of the Joint Products. Obtain adequate trademark protection of the mark's adopted by Dilligafto be used as part of the Joint Products.

M.

N.

O.

P.

Q.

15. Agreement by:

Dilligaf materially breached its obligations and duties under the terms of the

A.

Failing to utilize reasonable efforts to develop, create, market and promote the Joint Products, beyond the creation of a few tee shirt designs. Failing to develop and create a website for the marketing and promotion of the Joint Products. Failing to pay for the promotional fees and expenses associated by the appearance of Sorrentino and MPS at a promotional show in Las Vegas. Failing to arrange for any promotion, marketing or development of the Joint Products. Failing to process orders and payments related to the Joint Products from the website devoted to the Michael Sorrentino Line that originated from the website. Failing to provide Sorrentino with a sufficient supply of the Joint Products for his personal use and for promotional spots.

B.

C.

D.

E.

F.

G.

Failing to obtain approval by MTV of a minimum of 5 designs of Joint Products. Failing to pay to MPS the $1,000.00 per month as required by Paragraph 6(a) of the Agreement. Failing to pay to MPS the sum of $15,000.00 as required by Paragraph 6(b) of the agreement. Failing to prepare an accounting and make a payment of MPS' distributable share of Distributive Net Profit as required by Paragraph 7(a) of the Agreement. Failing to obtain sufficient trademark protection of the marks and designs associated with the Joint Products. Abandoning all efforts to fulfill its obligations under the terms of the Agreement as demonstrated by the print out of Dilligaf' s website attached hereto as Exhibit F.

H.

I.

J.

K.

L.

16.

As a direct and proximate result of Dilligaf s material breaches of the agreement,

MPS has been damaged. 17. 18. MPS has satisfied all conditions precedent prior to filing this suit. Counter Plaintiffs have hired the undersigned law finn and have agreed to pay

said firm a reasonable fee for its services. COUNT II - Declaratory Judgment 19. MPS and Sorrentino readopt and reallege the allegations contained in Paragraph 1

through 18 above, and further allege:
20,

This is a count for a Declaratory judgment pursuant to Chapter 86 of Florida

Statutes.
21.

As a result of Dilligafs failure to perform on its obligations under the terms of the

Agreement, Sorrentino and MPS did advise Dilligaf on or about August 17, 2011 that it had terminated Dilligaf's rights under the terms of the Agreement, as set forth in the Notice of

Termination dated August 17, 2011, a true and correct copy of which is attached hereto as Exhibit G. 22. As a result of the Notice of Termination and as a result of Dilligafs allegations

(in the Complaint) that the terms of the Agreement (and MPS/Sorrentino's

obligations under)

continue, MPS and Sorrentino are unsure and uncertain as to their future obligations under the terms of the Agreement. Hence they seek a declaration that as of the effective date of the Notice the terms of the Agreement.

of Termination, they have no further obligations to Dilligafunder

COUNT III - Unfair Competition and False Designation of Origin - 15 U.S.c. §1125(a) 23. MPS and Sorrentino, hereby readopt and realleges the allegations contained in

Paragraph 1 through 18 above, and further alleges: 24. services
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Counter Defendants' use of the Mark to promote, market or sell their products and direct competition with Plaintiff s products and services constitutes unfair

competition

and false designation

of ongm in violation of 15 U.S.C.

§1125(a). Counter

Defendants' use of the Mark is likely to cause confusion, mistake, deception among consumers. 25. Counter Defendants' wrongful acts have permitted or will permit them to

capitalize on the success, goodwill and reputation of MPS and Sorrentino and the strength of its mark in promoting their own goods and services. 26. As a direct and proximate result of Counter Defendants' wrongful conduct, MPS

and Sorrentino has been and will be deprived of the value of the Mark and its related assets.

27.

As a direct and proximate result of Counter Defendants' wrongful conduct,

Plaintiff has: been damaged and such damage will continue unless the Court enjoins Counter Defendants' acts. MPS and Sorrentino have no adequate remedy at law for Counter Defendants' continuing violation of its rights.

COUNT IV - Unfair Competition Under Florida Statutes &&495.131,151 28. MPS and Sorrentino, hereby readopt and reallege the allegations contained in

Paragraph 1 through 18 above, and further alleges: 29. Counter Defendant's actions discussed herein constitute unfair competition within

the meaning ofFS 495.131 and 151. 30. MPS and Sorrentino are entitled to preliminary and permanent injunctive relief

ordering Counter Defendants to cease this unfair competition, as well as disgorgement of all Counter Defendant's profits associated with this unfair competition. COUNT V - Deceptive, False and Misleading Advertising - Florida Statutes §495.151 31. MPS and Sorrentino, hereby readopt and reallege the allegations contained
In

Paragraph 1 through 18 above, and further alleges: 32. The acts of Counter Defendants' described above constitute untrue and

misleading advertising as defined by Florida Statute 495, et seq. 33. Counter Defendants use of the Mark in the same market is likely to create

confusion or to cause mistake or to deceive consumers as to the affiliation, connection or association of MPS and Sorrentino's products and services, or deceive consumers as to the

origin, sponsorship or approval ofMPS and Sorrentino's products and services. 34. Counter Defendant's wrongful acts have permitted or will permit them to

capitalize on the success, goodwill, and reputation of MPS and Sorrentino and the strength of the Mark in promoting their own goods and services. 35. As a direct and proximate result of Counter Defendants' wrongful conduct, MPS

and Sorrentino have been damaged and such damage will continue unless the Court enjoins

Defendants' acts. Plaintiff has no adequate remedy at law for Defendants' continuing violation of Plaintiff s rights. COUNT VI - Trademark Infringement - Common Law 36. MPS and Sorrentino, hereby readopt and realleges the allegations contained in

Paragraph 1 through 18 above, and further alleges: 37. The acts of Counter Defendant described above constitute trademark infringement

of MPS and Sorrentino's common law rights in its uses of the Mark. 38. Counter Defendant's improper use of the mark is likely to cause confusion,

mistake and deception of the public as to the identity and origin of MPS and Sorrentino's goods and services and is likely to cause others to believe that there is a relationship between Counter Defendant and MPS and Sorrentino. 39. Counter Defendants' wrongful acts have permitted or will permit them to

capitalize on the success, goodwill and reputation of MPS and Sorrentino and the strength of the Mark in promoting their own goods and services. 40. As a direct and proximate result of Counter Defendants' wrongful conduct, MPS

and Sorrentino have been and will be deprived of the value of its Mark and related assets. 41. As a direct and proximate result of Counter Defendant's wrongful conduct,

Plaintiff has been damaged and such damage will continue unless the Court enjoins Counter Defendants' acts MPS and Sorrentino have no adequate remedy at law for Counter Defendants' continuing violation ofMPS and Sorrentino's trademark rights. COUNT VI - COMMON LAW INJURY TO BUSINESS REPUTATION 42. MPS and Sorrentino repeats and hereby incorporates herein by reference, as

though specifically pleaded herein, the allegations of paragraphs 1 through 18 and further allege:

43.

MPS and Sorrentino allege that Counter Defendants' use of the Infringing Marks

injures and creates a likelihood of injury to MPS and Sorrentino's business reputation because persons encountering MPS and Sorrentino and their products and services will believe that Counter Defendants are affiliated with or related to or have the approval of MPS and Sorrentino, and any adverse reaction by the public to Counter Defendants and the quality of their products and the nature of their business will injure the business reputation ofMPS and Sorrentino and the goodwill that it enjoys in connection with its trademarks. COUNT VII - Unauthorized Publication Of Name And Likeness Florida Statutes § 540.08 41. MPS and Sorrentino repeat and hereby incorporate herein by reference, as though

specifically pleaded herein, the allegations of paragraphs 1 through 18 and further alleges: 44. Counter Defendant has published on its Website, the name, image and likeness of

Sorrentino for commercial and advertising purposes without the consent ofMPS or Sorrentino. 45. unauthorized purposes. WHEREFORE, Plaintiffs pray: 1. On Count I, that the Court enter a judgment in an amount to be determined at trial, As a result, MPS and Sorrentino is entitled to enjoin Counter Defendants' publication of Sorrentino's name and likeness for commercial or advertising

plus interest and attorney fees and costs pursuant to Paragraph 11 of the Agreement. 2. On Count II, that the Court enter an Order declaring that MPS and Sorrentino

have no further obligation to Dilligaf. 3. On Counts III, IV, V, and VI, that pursuant to 15 U.S.C. § 1116, Fla. Stat. §

495.141 and Fla. Stat. §540.08(2), Counter Defendant, Dilligaf, and their agents, officers, employees, representatives, successors, assigns, attorneys, and all other persons acting for, with,

by, through or under authority from Defendants, permanently enjoined from:

and each of them, be preliminarily

and

(a) using the Mark, or any colorable imitation thereof; (b) using any trademark that imitates or is confusingly similar to or in anyways similar to the trademark "The Situation", or that is likely to cause confusion, mistake, deception, or public misunderstanding as to the origin of MPS and Sorrentino's products and services or their

connectedness to Counter Defendants; (c) using the name, image and likeness of Sorrentino for commercial or advertising purposes, anywhere on the website. 2. That Counter Defendant be required to file with the Court and serve on MPS and

Sorrentino within thirty (30) days after entry of the Injunction, a report in writing under oath setting forth in detail the manner and form in which Counter Defendant has complied with the Injunction; 3. That, pursuant to 15 U.S.C. § 1117, Counter Defendant, and the persons who

control their infringing activities, be held liable for all damages suffered by MPS and Sorrentino resulting from the acts alleged herein; 4. That, pursuant to 15 U.S.C. § 1117 and Florida Statute 495.141, et. seq., Counter

Defendant be compelled to account to MPS and Sorrentino for any and all profits derived by it from its illegal acts complained of herein; 5. That the Counter Defendant be ordered pursuant to 15 U.S.C. § 1118 and FS

495.141 to deliver up for destruction all containers, labels, signs, prints, packages, wrappers, receptacles, advertising, promotional material or the like in possession, custody or under the

controls of Counter Defendant bearing a trademark found to infringing the trademark rights, as well as all plates, matrices, and other means of making the same; 6. That the COUl1 declare this to be an exceptional case and award MPS and

Sorrentino its full costs and reasonable attomeys' fees pursuant to 15 U.S.C. § 1117; 7. damages;
8.

That Defendants be ordered, pursuant to FS 495.141,

to pay Plaintiff 3 times

That the court grant Plaintiff any other remedy to which it may be entitles as

provided for in 15 U.S.C. §§ 1116 and 1117 or under state law; and 9. For such and other further relief that the court deems just and proper. Demand for Jury Trial MPS and Sorrentino hereby demand a jury trial for all matters triable. Respectfully submitted by: EHRENSTEIN CHARBONNEAU CALDERIN Attorneys for Defendants and Counter Plaintiffs Michael Sorrentino and MPS Entertainment, LLC 501 Brickell Key Drive, Suite 300 Miami, Florida 33131 T. (305) 722-2002 F. (305) 722-2001 By ~

i/lJ/_
Wolfe. Esq. Florida Bar No.: 355607 rwolfeia)ecclegal.com Christopher B. Spuches, Esq. Florida Bar No.: 42456 cbs((~ecclegal.com

CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing was served via U.S. Mail to: Answer,

Affirmative Defenses and Counterclaims

Ravi Batta, Esq., 33181 on this

Rosenfeld & Stein P .A., 11900 Biscayne Boulevard, Suite 505, Miami, Florida 22nd day of August, 2011. Respectfully submitted by:

EHREN STEIN CHARBONNEAU CALDERIN Attorneysfor Defendants and Counter Plaintiffs Michael Sorrentino and MPS Entertainment, LLC 501 Brickell Key Drive, Suite 300 Miami, Flori da 3313 1 T. (305) 722-2002 F. (305) 722-2001

BY:~ Richard C. Wolfe. Esq. Florida Bar No.: 355607 rwolfe@ecclegal.com Christopher B. Spuches, Esq. Florida Bar No.: 42456 cbs@ecclega1.com

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