Hyundai Agency Innocean Settles Lawsuit With Ad Tech Company Eshots

Filing alleged breach of contract

The company provides events marketing services. - Credit by Sources: eshots, Innocean, Getty Images

Hyundai’s ad agency, Innocean, recently filed a lawsuit against events marketing technology provider eshots in The Superior Court of Orange County, Calif., alleging that the company breached its contract with the agency by failing to adequately meet its requirements.

The suit was settled for an undisclosed sum soon after its official filing on June 25.

An eshots representative told Adweek that “the matter was settled amicably,” but declined to reveal any further details.

“The parties voluntarily resolved their dispute on mutually agreeable terms,” wrote an agency spokesperson. The law firm of Gordon & Rees, which represented Innocean in this case, referred requests for comment to the agency’s PR firm.

In the lawsuit, Innocean claims it entered into discussions with eshots in July 2017 to provide a variety of services related to parent company Hyundai’s presence at auto show events during the 2017–2018 season. These included technical and client support work as well as providing iPads loaded with custom software to aid in Innocean’s marketing efforts at those shows. According to the suit, these negotiations failed to lead to a master services agreement between the two parties—but Innocean and eshots signed a series of five “client authorizations to being work” on or about August 3, September 27, November 15, November 22 and December 15, 2017.

Eshots has worked with many major agencies and clients, most recently announcing a new partnership with GSD&M and the U.S. Air Force in March. According to this suit, however, the company’s performance was not up to par.

Innocean alleges that it began having problems with eshots in September 2017, including malfunctioning consumer surveys, unsent thank you emails to consumers, failure to track sales leads in real time as promised in an agreement and sales lead tracking software and services that proved “inadequate, problematic and below the professional standards in the industry.”

The agency then reportedly terminated all of its work authorizations with the company on December 20, 2017.

The suit also claims that eshots failed to meet the requirements of its agreements with the agency and thus breached said agreements while billing Innocean in excess of the agreed upon “actual out-of-pocket expenses.” Specifically, the filing claims that eshots sent Innocean an invoice in excess of $145,000 for such costs.

Innocean’s legal team states in the lawsuit that the breach of these agreements resulted in damages, including “the amounts paid under the agreements for the services that were not performed adequately and/or were not requested” in addition to lost business opportunities, legal costs and “such other relief as the court may deem just and proper.”

The agency sought “an amount in excess of this court’s jurisdictional requirement, to be proven at the time of trial, plus costs and interest thereon,” claiming it was “entitled to a constructive trust and restitution of the amounts wrongfully taken and retained by Defendants at Plaintiff’s expense.”

It’s far from the only legal drama related to Innocean so far this year.

The settlement follows a pair of lawsuits filed against Innocean that named current CCO Eric Springer and former vp of customer relations management Michael Sachs, alleging sexual harassment, retaliation and wrongful termination. Both cases have yet to be officially resolved.

@ErikDOster Erik Oster is an agencies reporter for Adweek.
@PatrickCoffee Patrick Coffee is a senior editor for Adweek.