Hillside Productions, Inc. v. County of Macomb, 061510 FED6, 08-2268

Docket Nº:08-2232, 08-2268
Opinion Judge:DAMON J. KEITH, Circuit Judge.
Party Name:HILLSIDE PRODUCTIONS, INC., GARY RONCELLI, and JOSEPH VICARI, Plaintiffs-Appellants/Cross-Appellees, v. COUNTY OF MACOMB, Defendant-Appellee/Cross-Appellant.
Judge Panel:Before: KEITH, CLAY, and GRIFFIN, Circuit Judges.
Case Date:June 15, 2010
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
 
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HILLSIDE PRODUCTIONS, INC., GARY RONCELLI, and JOSEPH VICARI, Plaintiffs-Appellants/Cross-Appellees,

v.

COUNTY OF MACOMB, Defendant-Appellee/Cross-Appellant.

Nos. 08-2232, 08-2268

United States Court of Appeals, Sixth Circuit

June 15, 2010

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION

ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN

Before: KEITH, CLAY, and GRIFFIN, Circuit Judges.

DAMON J. KEITH, Circuit Judge.

Plaintiffs-Appellants Hillside Productions, Inc., Gary Roncelli, and Joseph Vicari ("Plaintiffs") were granted summary judgment on their breach of contract claim against Defendant-Appellee County of Macomb ("the County"). Following a jury trial, Plaintiffs were denied their remaining claims against the County and awarded no damages for their breach of contract claim against the County. The County prevailed on its counterclaims against Plaintiffs. On appeal, Plaintiffs argue that the district court erred by: (1) denying Plaintiffs' motion for judgment as a matter or law, or, in the alternative, for a new trial; (2) concluding that advice of counsel evidence was properly admitted at trial; (3) excluding the expert testimony of Mark Crawford; and (4) rejecting their procedural due process claims against the County. For the reasons set forth below, we AFFIRM.1

I. BACKGROUND

A. Facts

Sublease

On May 19, 1999, Plaintiffs and the County entered into a Sublease for Plaintiffs' exclusive use of the Freedom Hill Amphitheater ("Amphitheater") in Macomb County's Freedom Hill County Park ("Park") and shared use of the rest of the Park. On March 21, 2000, Plaintiffs and the County amended the Sublease and extended its term, with a twelve-year extension until 2020 and renewal options until 2040. Plaintiffs constructed underground improvements on the Amphitheater. The County did not reimburse Plaintiffs for the $1.3 million in costs associated with these improvements.

The County suggested that Plaintiffs instead recoup payment for these costs by taking 75% of the annual revenue from parking at all events at the Park with the County receiving the remaining 25%. Plaintiffs also had to guarantee a minimum of $125, 000 annually to the County regardless of the actual revenue, in exchange for receiving 75% of the revenue. At the end of 2000, Plaintiffs began making major renovations to the Amphitheater and applied for a Class C liquor license from the City of Sterling Heights, Michigan. From October 24 through November 15, 2000, Sterling Heights sent letters to Macomb County Parks and Recreation Commission ("MCPRC"), demanding that revenues be directed to Sterling Heights to support services in the Park. Plaintiffs assert that the County never provided them with the notices; and as a result, Sterling Heights imposed a Special Approval Land Use requirement and a new building requirement on the Plaintiffs.

The County generally authorized its Parks Administrator, Anthony Casasanta, to sign Plaintiffs' requests for building permits and other documents for submission to Sterling Heights, including the February 9, 2001 Special Approval Land Use that he signed. After obtaining the Special Approval Land Use, Plaintiffs required a building permit to begin the second phase of the Amphitheater construction project, including constructing a stage that had been torn down during the first phase of the building project. Plaintiffs submitted the building permit request to Casanata for signature, but the County directed him not to sign the document.

Plaintiffs were advised that they would instead need the signature of John Hertel, Chairman of the County Board of Commissioners. Chairman Hertel and Corporation Counsel George Brumbaugh met with Plaintiffs, and James Perna, the then President of the MCPRC. Chairman Hertel advised Plaintiffs that they would have to make concessions to the Sublease in exchange for Hertel's signature on the building permit request. Plaintiffs submitted to this request in what became the Second Amendment to the Sublease, on March 29, 2001. The Second Amendment to the Sublease included cross-indemnification provisions for the parties and required Plaintiffs to pay maintenance, property taxes, and 1% of gross ticket revenues to the County.

Food and Beverage Agreement

Plaintiffs eventually entered into a Food and Beverage Agreement with the County for Independence Hall, a banquet facility located in the Park. In October 2000, the County issued a Request for Proposals for Catering Services at the Independence Hall, which stated: "No liquor license is available at the Independence Building. All alcohol consumption is done either by being provided by a host without charge or through use of a temporary permit secured by a non-profit entity." (Am. Compl. Ex. I, at 2.) Parks Administrator Casanata received a letter from the Sterling Heights Police Department in response to the Request for Proposals, dated October 26, 2000, advising him that Independence Hall must comply with the city's liquor ordinances and providing him with the text of said ordinances.

Plaintiffs bid on the County's Request for Proposals and thereafter executed the Food and Beverage Agreement, a license, with the County on May 10, 2001. The license provided Plaintiffs with access to parts of the building for catering service through 2020, for an annual payment of $40, 000. Plaintiffs and Sterling Heights became embroiled in litigation regarding the ordinances that Sterling Heights required of Plaintiffs, which ended after entry of a Consent Judgment in 2004. See Hillside Productions, Inc. et al. v. Duchane et al., Case No. 2:02-cv-73618 (E.D. Mich.).

In January 2005, Plaintiffs sought the County's consent to renovate Independence Hall. Plaintiffs wanted to create office space, a coatroom, and a liquor storage room. The proposed coatroom would have affected the space in the County's meeting room, and resulted in changes to the County's administrative office and storage supply areas. The County responded by stating that the MCPRC would like to meet with Plaintiffs to discuss a possible modification to the Food and Beverage Agreement and the Sublease. Plaintiffs countered that they would not renegotiate either agreement to obtain the approval to renovate.

The MCPRC stated that it would approve Plaintiffs' request only if Plaintiffs agreed to collect parking revenue for all events – the County's obligation under the Second Amendment of the Sublease – at no charge, unless the revenue exceeded $500, 000, and at only 25% of the actual labor costs applied against any amount owed to the County above $125, 000. Plaintiffs rejected this proposal.

Over Plaintiffs' opposition, the MCPRC voted on April 11, 2005:

[T]o approve Plaintiffs' request to use the following 439 square floor areas, small office for a catering manager, storage room for the locked liquor and dry goods and conference room area for coatroom all changes for remodeling paid by Hillside Production. In lieu of this space, Plaintiffs will continue to collect parking and cost of labor for parking not to exceed 25 percent and will forward request to Facilities & Operation for recommendation.

(Appellant's App. at 66.) Plaintiffs argue that the designation of square footage for its proposed renovations was contrary to the license, which stated that it was not a lease for specific property. Plaintiffs asked the MCPRC to reconsider its vote. When it would not, Plaintiffs sent the County a notice of termination of the Food and Beverage Agreement on July 5, 2005.

PSE Transaction

On October 18, 2005, Plaintiffs approached the County about entering into a purchase asset agreement that would assign its interests in the Sublease to a business formed between Plaintiffs and Palace Sports and Entertainment Hillside, which was named PSE Hillside ("PSE"). PSE agreed to purchase the Sublease from Plaintiffs for nine million dollars. PSE sought written authorization to make improvements to the Amphitheater, to expand parking and raise parking rates without County approval, and to obtain clarification on whether County approval was necessary for advertising. The purchase asset agreement required that certain deliverables be provided in order for the parties to close the agreement.

After the April 11, 2005 MCPRC meeting at which parking collection was discussed, some MCPRC members met with Plaintiffs. According to Riberas, two of the eleven commissioners, Bucci and DiMaria, stated that the County was going to collect and keep all parking revenue related to County-sponsored events. Riberas testified that Bucci and DiMaria informally told him that they knew that the County was not entitled to all the parking revenue for County-sponsored events, but they would vote in this manner to force Plaintiffs to make concessions to the contracts. Bucci and DiMaria later denied making such statements. At the March 23, 2006 MCPRC meeting, DiMaria moved that the County "collect all parking for County-sponsored events and fees, " and the...

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