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Blues Events, LLC v. Lincoln Professional Baseball, Inc.

United States District Court, D. Nebraska

January 30, 2014

BLUES EVENTS, LLC, et al., Plaintiffs,
v.
LINCOLN PROFESSIONAL BASEBALL, INC., d/b/a LINCOLN SALTDOGS, et al., Defendants.

MEMORANDUM AND ORDER

JOHN M. GERRARD, District Judge.

This matter is before the Court on the defendants' motion for summary judgment (filing 19) and motion for sanctions pursuant to Fed.R.Civ.P. 11(c) (filing 33). The Court will grant the motion for summary judgment, but deny the motion for sanctions.

BACKGROUND

This case arises from a joint venture to put on a concert at Haymarket Park, a baseball stadium in Lincoln, Nebraska. The plaintiffs are Tim Tucker, a Colorado businessman; Direct Music Distribution, LLC (DMD), Tucker's company; and Blues Events LLC, a Colorado company that was formed by Tucker and others for purposes of this joint venture. Filing 1 at 4; filing 40 at 1-2. The current defendants are Lincoln Professional Baseball, Inc., d/b/a Lincoln Saltdogs (the Saltdogs), and Charlie Meyer, its president; the Saltdogs are a minor league baseball team that plays at Haymarket Park. Filing 1 at 5. Loosely described, the joint venture came about because Tucker and his associates were in the music and concert promotion business, while the Saltdogs had a venue for the show.

The parties began discussing the concert in April 2012. Filing 40 at 1. In late April, Tucker brought in Feyline International, a company run by experienced concert promoter Barry Fey. Filing 1 at 5; filing 40-1. On May 17, DMD, Feyline, the Saltdogs, and the University of Nebraska Alumni Association executed a letter of intent setting forth the basic parameters of the venture.[1] Filing 40-2. On June 6, Blues Events' articles of organization were filed with the Colorado Secretary of State; the registered agent and "person forming the limited liability company" was listed as Ann Maul. Filing 40-3. Tucker explains that Maul was named "the sole member and registered agent" of Blues Events "[i]n an effort to maintain a corporate entity separate from the main players in the negotiation...." Filing 40 at 2.

By June 20, 2012, a draft joint venture agreement had been created. Filing 1 at 30-39. Tucker emailed Meyer expressing disagreement with some of the language of the draft agreement, particularly regarding production costs, and when payments would be made from which proceeds. Filing 40-7 at 2. Tucker suggested that ticket sales would be "completed" by August 3 for the August 31 concert, and that production costs could be deducted first and paid from the proceeds of initial sales. Filing 40-7 at 2. Meyer was concerned that if the tickets did not sell out by that date, risk was being shifted to the venue. Filing 40-7 at 1. A conference call was held a few days later, and while there were still financial points to discuss, the venture proceeded. Filing 40-8.

Meyer sent a final, signed joint venture agreement (the Agreement) to Tucker on June 29, 2012. Filing 17 at 41-59. The only parties to the Agreement were the Saltdogs and Blues Events. Filing 40-5 at 1. Maul signed the Agreement on behalf of Blues Events on July 2. Filing 1 at 53; filing 40 at 3. But Tucker claims that the Agreement did not represent what he and Meyer had previously agreed to. According to Tucker, he was out of town when Meyer sent him the Agreement, so he had his assistant deliver it to Maul for signing. Filing 40 at 3. It was only after he returned to the office on July 5, he says, that he "became aware of the material differences between the agreed-upon language Meyer and [he] had discussed the week before, and the language in the final Agreement." Filing 40 at 3-4.

Tucker sent a memo to Meyer dated July 6, 2012, complaining about some of the language in the Agreement. Filing 40-10. Specifically, he asserted the Agreement should have provided that the concert could be canceled if ticket sales were insufficient by August 1. Filing 40-10 at 1. A bond or insurance was to be paid equally by the parties to protect against cancellation due to "act of god." Filing 40-10 at 1. And with respect to payments, Tucker specifically objected to a provision of the Agreement for a $100, 000 upfront payment from Blues Events to the Saltdogs. Filing 40-10 at 1. But, in a separate email, Tucker wrote that while those issues needed clarification, his "understanding is August 9 we are ready to go on sale and start work selling tickets, sale date." Filing 20-1 at 4.

On July 9, Meyer replied that "again changing the deal" would not be acceptable and that the event would be in jeopardy. Filing 20-1 at 4. Tucker replied: "Leave alone then. We will go with what we got. The investor is the one that is worried about every detail and becoming very annoying. I will deal with them. Its [sic] time to stop coddling them[.]" Filing 20-1 at 4.

The Agreement also stated, in relevant part, that Blues Events was relying upon a commitment to provide licenses for University of Nebraska name and logo use. Filing 40-5 at 3. Such an agreement between the Alumni Association and the Saltdogs was effective July 11, 2012. Filing 1 at 66-70. There were some intervening disagreements over insurance and field protection, but they are not particularly relevant. It is interesting to note, however, that in an August 27 email to several Saltdogs officials, Tucker referred to apparently disappointing preshow ticket sales; contrary to some of his earlier representations, Tucker said that "as originally understood from day one[, ]" he believed "most sales would be day of show." Filing 17 at 40.

The concert took place as planned on August 31, 2012. Filing 1 at 19. The Agreement provided for a final settlement of expenses and profits or losses on the day after the concert, with the net profits (after payments required by the Agreement were made) to go to Blues Events. Filing 40-5 at 5. According to Tucker, he attempted to contact the Saltdogs employee in charge of the box office, but was unable to reach him. And Tucker claims that no proceeds were ever distributed to Blues Events. Filing 40 at 4.

This proceeding ensued, in which Tucker, DMD, and Blues Events initially sued the Saltdogs, Meyer, the University of Nebraska-Lincoln, the Alumni Association, and "Haymarket Park Stadium." Filing 1 at 1. Only the Saltdogs and Meyer remain, and they have moved for summary judgment.

STANDARD OF REVIEW

Summary judgment is proper if the movant shows that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(a). The movant bears the initial responsibility of informing the Court of the basis for the motion, and must identify those portions of the record which the movant believes demonstrate the absence of a genuine issue of material fact. Torgerson v. City of Rochester, 643 F.3d 1031, 1042 (8th Cir. 2011) (en banc). If the movant does so, the nonmovant must respond by submitting evidentiary materials that set out specific facts showing that there is a genuine issue for trial. Id.

On a motion for summary judgment, facts must be viewed in the light most favorable to the nonmoving party only if there is a genuine dispute as to those facts. Id. Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the evidence are jury functions, not those of a judge. Id. But the nonmovant must do more than simply show that there is some metaphysical doubt as to the material facts. Id. In order to show that disputed facts are material, the party opposing summary judgment must cite to the relevant substantive law in identifying facts that might affect the outcome of the suit. Quinn v. St. Louis County, 653 F.3d 745, 751 (8th Cir. 2011). The mere existence of a scintilla of evidence in support of the nonmovant's position will be insufficient; there must be evidence on which the jury could conceivably find for the nonmovant. Barber v. C1 Truck Driver Training, LLC, 656 F.3d 782, 791-92 (8th Cir. 2011). Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial. Torgerson, 643 F.3d at 1042.

DISCUSSION

The plaintiffs' complaint contains four claims for relief: "fraudulent misrepresentation/fraud in the inducement, " breach of fiduciary duty, conversion, and breach of contract. Filing 1 at 20-23. Each will be addressed, but before doing so, it is necessary to clarify which plaintiffs can properly advance those claims.

BLUES EVENTS' CERTIFICATE OF AUTHORITY

Specifically, the defendants contend that Blues Events lacks capacity to bring these claims in Nebraska because it does not have a certificate of authority to transact business in Nebraska. The Court agrees.

The Nebraska Uniform Limited Liability Company Act, Neb. Rev. Stat. § 21-101 et seq. (Reissue 2012), provides that "[a] foreign limited liability company transacting business in this state may not maintain an action or proceeding in this state unless it has a certificate of authority to transact business in this state." § 21-162. Nebraska's former Limited Liability Company Act, Neb. Rev. Stat. § 21-2601 et seq. (Reissue 2012), which terminated January 1, 2013, similarly provided that "[n]o foreign limited liability company transacting business in this state without a certificate of authority shall be permitted to maintain any action, suit, or proceeding in any court of this state until such limited liability company has obtained a certificate of authority." § 21-2643. Because this case is brought under the Court's diversity jurisdiction, it is, for these purposes, in effect only another court of Nebraska. See Woods v. Interstate Realty Co. , 337 U.S. 535, 538 (1949); see also Weeks Constr., Inc. v. Oglala Sioux Hous. Auth., 797 F.2d 668, (8th Cir. 1986) ...


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