Leif Steiner, founder and creative director at Moxie Sozo Design and Advertising, told SNEWS he saw no option other than pursuing legal action against Boulder, Colo.-based shoe company Newton Running.
“No one ever wants to be involved in a lawsuit, but [Newton has] created a scenario where we had to,” Steiner said. “We tried to negotiate, and we had no reasonable response from them.”
Moxie Sozo LLC recently filed suit in Denver Country District Court, claiming failure to pay outstanding invoices, breach of contract and in order to prevent the company from using Moxie Sozo’s advertising and creative materials in the future.
Newton declined to comment, though spokeswoman Elinor Fish said: “While we can't comment on pending litigation, there are always two sides to every story and we feel confident in our position on this matter.”
According to the lawsuit, Moxie Sozo was retained by Newton in June 2012 to develop and create advertising and a brand campaign for Newton. While Newton, the documents state, paid the initial deposit of $105,719 and made two subsequent payments of $35,240 for December and November 2012, the company allegedly failed to continue monthly payments for January, February and March 2013.
Moxie Sozo also issued Newton an invoice of $84,750 for “additional services” outside the contract.
“When we pour our heart and soul into working with a client, we frequently over-deliver. We try to do a great job for anybody,” Steiner said. The company’s client list includes Nike Swim and Nickelodeon, in addition to several Colorado start-ups.
Steiner said he couldn’t point out exactly which aspects of Newton's advertising bear Moxie Sozo's imprint, but said Newton is still using much of the work his company produced.
Though the agreement the companies signed ensures Newton worldwide license to use final deliverables and art in media, that license is revocable when outstanding invoices aren’t paid, the lawsuit said.
Steiner said Moxie Sozo is in “strong financial shape,” yet felt a jolt.
“We’re in strong financial shape, but anytime a client defaults on almost a third of a million dollars of what they owe you, that does affect the business as a whole,” Steiner said. “When you sign a contract and work with client, you make hiring and business decisions based off that legal agreement. So even though we’re in a strong financial position, it does affect the company.”