UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA ON TRACK INNOVATIONS LTD., an Israeli limited company, Plaintiff, v. MASTERWORK ELECTRONICS, INC., a California corporation Defendant. Case No. 4:17-cv-01103-KAW ANSWER OF DEFENDANT MASTERWORK ELECTRONICS, INC. TO PLAINTIFF’S COMPLAINT
Defendant MASTERWORK ELECTRONICS, INC. (hereinafter, “MASTERWORK”), by and through its undersigned counsel, answers Plaintiff ON TRACK INNOVATIONS LTD.’s (hereinafter, “OTI”) Complaint as follows: 1. In response to Paragraph 1, after reasonable investigation, MASTERWORK is unable to admit or deny the allegations of this paragraph, and on that basis denies them. 2. In response to Paragraph 2, MASTERWORK admits these allegations. 3. In response to Paragraph 3, MASTERWORK denies these allegations as a conclusion of law, to which no response is required. 4. In response to Paragraph 4, MASTERWORK denies these allegations as a conclusion of law, to which no response is required. 5. In response to Paragraph 5, MASTERWORK admits in part and denies in part. MASTERWORK admits that MASTERWORK is a California corporation with its principal place of business in this judicial district. The remaining allegation is a conclusion of law, to which no response is required. 6. In response to Paragraph 6, MASTERWORK denies these allegations as a conclusion of law, to which no response is required. 7. In response to Paragraph 7, MASTERWORK admits in part and denies in part. MASTERWORK admits that it issued a Purchase Order to OTI for 40,000 card readers for a total of $2,518,000.00, and that MASTERWORK cancelled the order. The remaining allegations of this paragraph are denied. 8. In response to Paragraph 8, MASTERWORK admits in part and denies in part. MASTERWORK admits that it issued the Purchase Order attached to the complaint and that MASTERWORK had previously purchased some card readers from OTI. The characterization of the Purchase Order is denied since the Purchase Order is a writing, the contents of which speak for themselves. MASTERWORK also denies that the Purchase Order included all specifications for the card readers. MASTERWORK also denies that the card readers were to include only features that had previously been supplied. 9. In response to Paragraph 9, MASTERWORK denies these allegations. To the extent this paragraph attempts to summarize the Purchase Order, the allegations are denied as the Purchase Order is a document, the contents of which speak for themselves. The remaining allegations are denied as conclusions of law, to which no response is required. 10. In response to Paragraph 10, MASTERWORK denies. The complaint does not provide any specifics as to how or when this was communicated, and after reasonable investigation, MASTERWORK has no knowledge of said communication. After reasonable investigation, MASTERWORK cannot admit or deny whether OTI purchased the underlying components, and manufactured and assembled the 40,000 card readers, and on that basis denies these allegations. 11. In response to Paragraph 11, MASTERWORK denies. After reasonable investigation, MASTERWORK is unable to admit or deny when Plaintiff manufactured 10,020 card readers and whether the card readers are available for delivery, and on that basis denies these allegations. By way of further answer, OTI previously represented that the 10,020 card readers had already been shipped and were held in storage. 12. In response to Paragraph 12, MASTERWORK denies. After reasonable investigation, MASTERWORK is unable to admit or deny when OTI manufactured and placed 29,980 card readers with UPS. To the extent the remaining allegations of this paragraph are not conclusions of law, to which no response is required, they are denied. 13. In response to Paragraph 13, MASTERWORK admits in part and denies in part. After reasonable investigation, MASTERWORK is unable to admit or deny when OTI delivered the card readers to UPS, and on that basis denies these allegations. It is admitted OTI issued three invoices to MASTERWORK, however the invoices were not transmitted to MASTERWORK on the invoice dates. The characterization of the contents of the invoices is denied since the invoices are writings, the contents of which speak for themselves. 14. In response to Paragraph 14, MASTERWORK admits in part and denies in part. It is admitted that MASTERWORK sent emails on the dates alleged. It is denied that 40,000 card readers were made available to MASTERWORK or delivered to MASTERWORK by January 20 and 23, 2017. The characterization of the emails is denied as they are writings, the contents of which speak for themselves. It is admitted that the card readers should have included an Apple Pay value added service (hereinafter “the Apple Loyalty VAS”). To the extent the remaining allegations of this paragraph are not conclusions of law, to which no response is required, they are denied. 15. In response to Paragraph 15, MASTERWORK denies these allegations. 16. In response to Paragraph 16, MASTERWORK admits in part and denies in part. It is admitted that OTI and its attorneys sent letters on the dates alleged. The characterization of the letters is denied as they are writings, the contents of which speak for themselves. It is denied that MASTERWORK did not respond. To the extent the remaining allegations of this paragraph are not conclusions of law, to which no response is required, they are denied. 17. In response to Paragraph 17, MASTERWORK admits in part and denies in part. MASTERWORK admits that is issued a cancellation to OTI. The characterization of the cancellation and its effect is denied. It is admitted that demurrage charges were assessed. MASTERWORK cannot admit or deny whether the 29,980 card readers were shipped or delivered in December, and on that basis denies these allegations. The remaining allegations of this paragraph are denied. FIRST CLAIM FOR RELIEF (BREACH OF CONTRACT) 18. MASTERWORK’s responses to Paragraphs 1-17 are hereby incorporated by reference as if set forth at length. 19. In response to Paragraph 19, MASTERWORK denies these allegations as a conclusion of law, to which no response is required. 20. In response to Paragraph 20, MASTERWORK admits in part and denies in part. MASTERWORK admits that certain terms are set forth in the Purchase Order and the invoices. MASTERWORK denies that all terms and requirements were set forth in the Purchase Order and invoices. 21. In response to Paragraph 21, to the extent the allegations of this paragraph are not conclusions of law, to which no response is required, they are denied. 22. In response to Paragraph 22, to the extent the allegations of this paragraph are not conclusions of law, to which no response is required, they are denied.. 23. In response to Paragraph 23, to the extent the allegations of this paragraph are not conclusions of law, to which no response is required, they are denied.. SEPARATE AND ADDITIONAL DEFENSES FIRST AFFIRMATIVE DEFENSE OTI’s Complaint fails to state a claim upon which relief may be granted. SECOND AFFIRMATIVE DEFENSE OTI’s claims may be barred by the applicable statute of limitations. THIRD AFFIRMATIVE DEFENSE OTI’s claims may be barred by the Statute of Frauds. FOURTH AFFIRMATIVE DEFENSE OTI’s claims are barred in whole or in part by the doctrine of unclean hands. FIFTH AFFIRMATIVE DEFENSE OTI’s claims are barred by the doctrine of failure of consideration.
SIXTH AFFIRMATIVE DEFENSE OTI’s comparative fault, lack of diligence, negligence, and failure to conduct its business affairs reasonably and responsibly bars its claims for relief. SEVENTH AFFIRMATIVE DEFENSE OTI’s claims are barred, in whole or in part, by the doctrines of laches, estoppel and waiver. EIGHTH AFFIRMATIVE DEFENSE OTI’s claims should be denied or diminished since OTI failed to mitigate its damages. NINTH AFFIRMATIVE DEFENSE If OTI suffered any damages, which is denied by MASTERWORK, OTI’s damages are barred or diminished by the doctrines of setoff and/or recoupment. TENTH AFFIRMATIVE DEFENSE OTI’s claims may be barred by accord and satisfaction. ELEVENTH AFFIRMATIVE DEFENSE OTI’s claims may be barred by assumption of the risk. TWELFTH AFFIRMATIVE DEFENSE Venue is improper in the Northern District of California. THIRTEENTH AFFIRMATIVE DEFENSE Venue is inconvenient in the Northern District of California. FOURTEENTH AFFIRMATIVE DEFENSE OTI’s claims are barred because of a prior pending action. FIFTEENTH AFFIRMATIVE DEFENSE OTI’s claims may be barred by the doctrine of justification. SIXTEENTH AFFIRMATIVE DEFENSE OTI’s claims may be barred by its breach of warranty. SEVENTEENTH AFFIRMATIVE DEFENSE OTI’s claims are barred because the goods were properly rejected and/or acceptance was properly revoked.
EIGHTEENTH AFFIRMATIVE DEFENSE OTI’s claims are barred by the doctrine of mistake. NINETEENTH AFFIRMATIVE DEFENSE OTI’s claims are barred since OTI prematurely shipped the goods. TWENTIETH AFFIRMATIVE DEFENSE OTI’s claims are barred by reason of failure of conditions. TWENTY-FIRST AFFIRMATIVE DEFENSE OTI’s claims are barred by reason of prevention/excuse of performance. TWENTY-SECOND AFFIRMATIVE DEFENSE OTI’s claims are barred by reason of OTI’s breach of the implied covenant of good faith and fair dealing. PRAYER FOR RELIEF WHEREFORE, Defendant MASTERWORK, INC. prays: (1) That Plaintiff On Track Innovations Ltd.’s Complaint be dismissed, (2) That judgment be entered in favor of Defendant MASTERWORK, INC.; and (3) That Defendant MASTERWORK, INC. be awarded its costs and any other relief deemed appropriate by this court.
Dated: April 20, 2017
RILEY SAFER HOLMES & CANCILA LLP
By: /s/ Jeffrey R. Williams JEFFREY R. WILLIAMS Attorney for Defendant MASTERWORK ELECTRONICS, INC. |
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