Midfield Concession Enters., Inc. v. Areas USA, Inc.

• Decision Date: 17 September 2015
• Docket Number: CASE NO. 2:14–cv–12174
• Citation: 130 F.Supp.3d 1122
• Parties: Midfield Concession Enterprises, Inc., Plaintiff, v. Areas USA, Inc., et al., Defendants. and Areas USA, Inc., Defendant/Counter–Plaintiff, v. Midfield Concession Enterprises, Inc., Plaintiff/Counter–Defendant, and Samir W. Mashni, Counter–Defendant.
• Court: U.S. District Court — Eastern District of Michigan

130 F.Supp.3d 1122

Midfield Concession Enterprises, Inc., Plaintiff,

v.Areas USA, Inc., et al., Defendants.andAreas USA, Inc., Defendant/Counter–Plaintiff,

v.Midfield Concession Enterprises, Inc., Plaintiff/Counter–Defendant,andSamir W. Mashni, Counter–Defendant.

CASE NO. 2:14–cv–12174

United States District Court, E.D. Michigan, Southern Division.

Signed September 17, 2015

Wayne E. Walker, Richard E. Rassel, III, Williams, Williams, Birmingham, MI, for Plaintiff/Counter–Defendant.

Arthur Thomas O'Reilly, Norman C. Ankers, Honigman, Miller, Detroit, MI, for Defendant/Counter–Plaintiff.

OPINION AND ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF MIDFIELD'S PARTIAL MOTION FOR SUMMARY JUDGMENT (Doc. 46), GRANTING IN PART AND DENYING IN PART DEFENDANTS AREAS USA AND AREAS MCNAMARA'S PARTIAL MOTION FOR SUMMARY JUDGMENT (Doc. 38), AND GRANTING COUNTER–DEFENDANT SAMIR MASHNI'S MOTION FOR SUMMARY JUDGMENT (Doc. 40)

MARIANNE O. BATTANI, United States District Judge

I. INTRODUCTION

This matter is before the Court on three separate motions for summary judgment: (i) Plaintiff Midfield Concession Enterprises, Inc.'s Motion for Partial Summary Judgment (Doc. 46); (ii) Defendants Areas USA, Inc., and Areas McNamara JV, LLC's (collectively, "Areas") Motion for Partial Summary Judgment (Doc. 38); and (iii) Counter Defendant Samir Mashni's Motion for Summary Judgment (Doc. 40).

The present action stems from a joint venture agreement between Plaintiff Midfield and Defendant Areas USA. Midfield alleges that Areas USA violated the Covenant Not to Compete found in this joint venture agreement and seeks judgment as a matter of law for the claims of Breach of Contract (Count I) and Breach of Fiduciary Duty (Count IV) found in its First Amended Complaint. (Doc. 25). In its Motion for Partial Summary Judgment, Midfield also seeks the following three declaratory judgments concerning Counts I through III of Areas USA's Amended Counterclaim (Doc. 30): that Midfield did not waive the applicability of the Covenant Not to Compete (Count I); that Midfield did not commit an anticipatory breach of contract (Count II); and that Midfield is entitled to summary judgment dismissing Areas USA's interference with business relations claim (Count III). (Doc. 46). Counter–Defendant Samir Mashni, Midfield's Vice–President and General Counsel, joins Midfield in his Motion for Summary Judgment seeking a declaratory judgment dismissing Areas USA's interference with business relations claim (Count III). (Doc. 40).

Areas USA maintains in its Amended Counterclaim and here seeks summary judgment that the Covenant Not to Compete is unenforceable because Midfield and Areas USA have waived its applicability through prior course of performance and, in the alternative, because it is an unreasonable restraint on trade (Count I). (Doc. 30). In their Motion for Partial Summary Judgment, Defendants further seek dismissal of: Midfield's misappropriation of trade secrets claim (Count II); Midfield's breach of contract for failure to pay capital costs claim (Count III); Midfield's unjust enrichment claim against Areas USA (Count V); and Midfield's unjust enrichment claim against Areas McNamara (Count VI). (Doc. 38).

For the following reasons, this Court GRANTS IN PART AND DENIES IN PART Plaintiff Midfield's Partial Motion for Summary Judgment, GRANTS IN PART AND DENIES IN PART Defendants Areas USA and Areas McNamara's Partial Motion for Summary Judgment, and GRANTS Counter Defendant Samir Mashni's Motion for Summary Judgment.

II. STATEMENT OF FACTS

Midfield Concessions Enterprises, Inc., ("Midfield") is a Michigan corporation in the business of establishing, managing and operating food and beverage concessions at various airports throughout the country. (Pl.'s First Am. Compl. ¶¶ 1, 5, Doc. 25). In particular, Midfield has operated food concessions at the Detroit Metropolitan Airport ("DTW"), including the "Mediterranean Grill" Restaurant in the South/McNamara Terminal, since 2002. (Id. at ¶ 9). Areas USA, Inc., is a Florida corporation that provides food, beverage and retail services in the U.S. travel and hospitality industries. (Id. at ¶¶ 2, 6). Representatives from Midfield and Areas USA began discussions sometime in 2006 or 2007 about forming a joint venture. (Pl.'s Mot. for Partial Summ. J. 3, Doc. 46). These discussions culminated in the execution of the Amended Joint Venture Agreement ("JV Agreement"), (Doc. 46, Ex. A), on June 28, 2007, that created the Joint Venture entitled AREAS MCE Detroit, JV. (Doc. 25, ¶ 8).

A. The Amended Joint Venture Agreement & Covenant Not to Compete

The purpose of the Joint Venture, as stated in § 1.6 of the JV Agreement, was to "operate a food concession or concessions at the Detroit Metropolitan Wayne County Airport ("Airport") at Detroit, Michigan, New North Terminal...." (Doc. 46, Ex. A at 1). In order to protect its interests in pre-existing concessions at the McNamara Terminal, including the Mediterranean Grill Restaurant, Midfield insisted upon including a Covenant Not to Compete in the JV Agreement that applied to both the McNamara and North Terminals. (Mashni Dep., 51:19–52:2, Nov. 6, 2014, Doc. 46, Ex. C). The Covenant Not to Compete reads:

AREAS USA and MIDFIELD CONCESSION ENTERPRISES, INC. hereby agree not to compete for any food and beverage concessions at the Detroit Metropolitan Airport throughout the term of this Agreement. Either AREAS USA or MIDFIELD CONCESSION ENTERPRISES, INC., can, however, submit proposals to the Detroit Metropolitan Airport on their own if the other party does not wish to pursue said business opportunity at Detroit Metropolitan Airport.

(Doc. 46, Ex. A at 15). The process of acquiring a concession begins when the DTW Airport Authority requests proposals from qualified concessionaires, such as Midfield or Areas USA, to operate available concessions. (Mashni Decl., ¶ 3, Doc. 46, Ex. B). The Airport Authority holds various informational "Outreach Meetings" attended by concessionaires who may or may not opt to bid. (Id. at ¶ 11). After interested concessionaires submit their proposals, or bids, the Airport Authority evaluates and awards the concession to the highest ranked bid. (Id. at ¶¶ 4–5).

B. Areas' Alleged Breach of the Covenant Not to Compete: The McNamara Terminal Bids & Mediterranean Grill

Midfield originally acquired the McNamara Terminal's Mediterranean Grill concession in 2002. (Doc. 46 at 4). Airport concessions are typically awarded for a period of ten years, and it became known that the DTW Airport Authority would be requesting new proposals for the McNamara Terminal concessions ("McNamara RFP") in the summer of 2013. (Id. ). The McNamara RFP was broken down into eight packages for bidding, with the Mediterranean Grill being Package # 6. (Id. at 5).

In either the fall or winter of 2012 at the Denver Airport, Samir Mashni, representing Midfield, discussed with Eduardo Uribe, Vice–President of Business Development at Areas USA, concerning the upcoming McNamara RFP. (Mashni Dep. 64:6–24). Uribe neither confirms nor denies that this conversation occurred, claiming that he does not recall whether or not it took place. (Uribe Dep. 72:6–21, Nov. 21, 2014, Doc. 46, Ex. D). Specifically, Mashni testified that he informed Uribe that Midfield would be bidding to protect its current interests in the McNamara Terminal and inquired as to Areas USA's bidding intentions. (Mashni Dep. 64:6–24). According to Mashni, Uribe said that Areas USA was unsure about whether it would bid. (Id. ). Although Mashni told Uribe to notify him when Areas USA's position was clear (id. at 76:14–16), Mashni never heard back from anyone at Areas USA (id. at 74:10–14). Midfield inferred from Areas USA's silence that it would not be bidding for the Mediterranean Grill or any of Midfield's current interests. (Id. at 74:15–24). Midfield submitted bids for multiple packages, including Package # 6 for Mediterranean Grill, on December 4, 2013. (Mashni Decl., ¶ 16).

In fact, Areas USA formed Defendant Areas McNamara JV, LLC, "a month or so or a couple of months before the RFP was due" for bidding in the McNamara RFP. (Uribe Dep. 92:4–9; 98:7–10). Areas USA never disclosed the existence of Areas McNamara to Midfield. (Id. at 108:17–21). Areas McNamara bid on and was awarded Package # 6 in 2014. (Mashni Decl. ¶ 19). According to Uribe, Areas USA did not believe the Covenant Not to Compete was applicable at the time of the McNamara RFP, stating, "When time passed, we completely forgot about this covenant ... [w]e didn't have a relationship with Midfield." (Uribe Dep. 42:5–14). Primarily because of disputes between the parties concerning capital contributions, Uribe testified that "[t]he relationship was really bad for many years ... at some point really the companies were completely running independently. It's like, you know, we weren't partners anymore." (Id. at 35:1–17). Mashni counters that the relationship and validity of the Covenant Not to Compete between Midfield and Areas USA was still ongoing at this point, despite any prior disagreements. (Mashni Dep. 81:5–22).

Of the eight concessionaires that bid on Package # 6, Areas McNamara won it, with an evaluation score of 439 out of 500; Midfield scored second highest with a score of 414. (Doc. 46, Ex. G at 168). If Areas USA had not bid on Package # 6, therefore, it would have been awarded to Midfield. Consequently, Midfield asserts that Areas USA's alleged breach of the Covenant Not to Compete deprived Midfield of 10–13 years of future revenue that would have been generated by the Mediterranean Grill, estimated to be in excess of $7,000,000.00. (Doc. 25, ¶ 26).

I. STANDARD OF REVIEW

Summary judgment is only appropriate when there is no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). The substantive law in each case will determine which facts are material, as "only disputes over facts that might affect the outcome of the...