Facts

Plaintiff Indigen Armor Inc. and defendant Millenworks Engineering entered into an agreement that was twice amended for Indigen to market and sell specialized defense and military vehicles, and Millenworks Engineering to develop and manufacture the vehicles. Indigen was to be the prime contractor and Millenworks Engineering was the subcontractor. The parties jointly prepared a Response to Request for Proposal (RFP) to the end customer. The end customer submitted a counter-offer to the RFP, seeking to retain equitable title and copyright privileges to the tooling and data rights to the produced vehicles.

Millenworks Engineering was not a party to the end customer agreement. Indigen paid Millenworks Engineering in full for all monies due under the agreement. The end customer requested receipt of the tooling and data rights for the vehicles, and Millenworks Engineering refused stating that Indigen had sold more rights to the end customer than Indigen had acquired from Millenworks Engineering.

Indigen elected to reverse engineer the tooling and data rights to honor the agreement with the end customer. Indigen brought suit against Millenworks Engineering for, among other things, breach of contract.

The agreement between Millenworks Engineering and Indigen required any disputes be heard at JAMS, and the parties elected to have the matter heard by Hon. William F. McDonald (Ret.).

PLAINTIFF'S CONTENTIONS:
Indigen contended that Millenworks Engineering as the subcontractor agreed to be bound by the agreement between Indigen and the end customer. In the agreement between Indigen and the end customer, the end customer retained the tooling and data rights for the vehicles to be produced.

DEFENDANT'S CONTENTIONS:
Millenworks Engineering contended that it had no contractual relationship with the end customer, that Indigen had sold more rights to the end customer than it had acquired from Millenworks Engineering, and that Indigen had no authority to bind Millenworks Engineering because the parties were merely independent contractors in law and in fact.

Result

Defendants to pay $2,029,721.39 to plaintiff ($523,000.16 for the unreceived tooling $1,201,638.70 for the unreceived data rights, $62,277 for an unpaid invoice, $10,000 for certain unrecovered personal property, $205,090 for attorneys fees, and $27,715.57 in costs). The binding arbitration was held before Hon. William F. McDonald (Ret.) of JAMS on Nov. 6, 2007. Hon. McDonald ruled that Indigen and Millenworks Engineering had entered into a joint venture agreement and that each acquired an interest in the end customer's specialized vehicle. Hon. McDonald ruled that Millenworks Engineering was in breach of contract for refusing to provide the tooling and data rights to the end customer, and that Indigen incurred damages by reverse engineering the rights.

Other Information

Millenworks Engineering will seek to vacate the award.