Best Team Ever Inc v. Matthew K Prentice

CourtMichigan Court of Appeals
DecidedJune 23, 2015
Docket319026
StatusUnpublished

This text of Best Team Ever Inc v. Matthew K Prentice (Best Team Ever Inc v. Matthew K Prentice) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Best Team Ever Inc v. Matthew K Prentice, (Mich. Ct. App. 2015).

Opinion

STATE OF MICHIGAN

COURT OF APPEALS

BEST TEAM EVER, INC., COACH INSIGNIA, UNPUBLISHED L.L.C., DELI UNIQUE WEST BLOOMFIELD, June 23, 2015 INC., MILK & HONEY DETROIT, INC., NO. VI CHOPHOUSE DETROIT, INC., NORTHERN LAKES SEAFOOD RESTAURANT, PLAZA DELI SOUTHFIELD, INC., SOURDOUGH BAKERY, INC., TROWBRIDGE RESTAURANTS, INC., EPICUREAN GROUP, INC., MORELS, INC., and PARR DELI, INC.,

Plaintiffs-Appellees,

v No. 319026 Oakland Circuit Court MATTHEW K. PRENTICE, LC No. 2012-127444-PD

Defendant-Appellant,

and

MICHIGAN BISTRO, ASMAR COMPANY, INC., INTERNATIONAL RESTAURANT GROUP, NWH HOLDINGS, ASMAR CAPITAL, MYKONOS TAVERNA, MORELS OF FARMINGTON HILLS, and JIMMY ASMAR,

Defendants.

Before: STEPHENS, P.J., and BORRELLO and GADOLA, JJ.

PER CURIAM.

Plaintiffs allege that defendant-appellant, Mathew K. Prentice, breached various noncompetition provisions in an employment agreement with plaintiff Trowbridge Restaurants, Inc. (TRI), and that Prentice converted plaintiffs’ assets for his own business operations. Prentice appeals as of right from a judgment, entered after a bench trial, granting plaintiffs’ request for injunctive relief and awarding damages to plaintiffs. We affirm.

-1- I. FACTS AND PROCEDURAL BACKGROUND

Prentice, a long-time chef, encountered financial difficulties in 2009 while operating restaurant and catering businesses in Wayne and Oakland counties. Facing foreclosure of certain restaurant assets by AMRESCO Commercial Finance, L.L.C.C. (AMRESCO), Prentice implored Stanley Dickson, Jr., to acquire those assets from AMRESCO in order to save the jobs of his employees and the reputation he had created through his business ventures. Dickson had met Prentice before 2009 through the Young Presidents Organization. Dickson was a member of a law firm and had an ownership interest in an accounting firm, but he also had business ventures outside of law and accounting. Dickson agreed to purchase the assets that were the subject of the foreclosure. He used TRI, which would transact business under the assumed name of Matt Prentice Restaurant Group, to purchase the assets. TRI also assumed several liabilities as part of the transaction with AMRESCO and Prentice. TRI also engaged in separate transactions to acquire the interests of Prentice and General Motors at another restaurant in the Renaissance Center in the Detroit.

The AMRESCO transaction did not involve Prentice’s catering businesses, but the catering businesses were part of Dickson’s overall transaction with Prentice, which also required Prentice to enter into an employment agreement with TRI. The employment agreement provided that Prentice would serve as the chief executive officer for TRI, whose business was described as “restaurants, catering, and all related goods and services.” Prentice was hired as an employee at will, but agreed to several noncompetition provisions that would remain in effect during and after his employment ended. In January 2011, the employment agreement was amended to expand the meaning of the term “employer” to include TRI and “its successors and assigns, and any of its present or future subsidiaries, or organizations controlled by, controlling, or under common control with it.”

In March 2012, while plans were in the works for new restaurants, including a Morels restaurant that would be opened under a lease being negotiated with Jimmy Asmar, Prentice informed Dickson that he was resigning his employment and would be going forward on his own with the new Morels restaurant and another restaurant, and that he would be assuming catering businesses at Temple Israel and Adat Shalom. Prentice took several key employees from plaintiffs after he resigned. He started operating under entities affiliated with Asmar. Dickson was unable to retain the catering business at Temple Israel. After a chaotic period in April 2012 during which Temple Israel either released payments to Prentice or withheld payments owed for catering services, Temple Israel obtained catering services only through Prentice.

This action was filed in June 2012. Pursuant to plaintiffs’ amended complaint, TRI and other associated entities, including Epicurean Group, Inc., which had been formed to create a new brand for business operations (hereafter collectively referred to as “plaintiffs”), sought injunctive relief and money damages against Prentice, Asmar, and other business entities. By the time of trial in July 2013, all defendants except for Prentice had been dismissed. Prentice was then providing catering services at Temple Israel, but was operating through his own entity, Matt Prentice Events. The Morels restaurant and a steakhouse that Prentice opened as part of his association with Asmar had closed.

-2- The trial court found that Prentice breached the employment agreement with TRI and converted plaintiffs’ assets. The court found that the agreement was blatantly and repeatedly breached. It rejected Prentice’s claim that the agreement, or various noncompetition provisions, were unenforceable. In addition to injunctive relief, the trial court awarded plaintiffs $500,000 in liquidated damages, $1 million for lost past and future profits for catering services at Temple Israel over a five-year period, and $52,346 for catering jobs that were executed by plaintiffs for Temple Israel, for which plaintiffs were never paid.

II. STANDARD OF REVIEW

“This Court reviews a trial court’s findings of fact following a bench trial for clear error and reviews de novo the trial court’s conclusions of law.” Trader v Comerica Bank, 293 Mich App 210, 215; 809 NW2d 429 (2011). An issue of contract interpretation is also reviewed de novo. Id. A finding is clearly erroneous where it lacks evidentiary support or this Court is left with a definite and firm conviction that a mistake was made. Chelsea Investment Group LLC v City of Chelsea, 288 Mich App 239, 251; 792 NW2d 781 (2010). We give deference to the trial court’s special opportunity to evaluate the credibility of witnesses who appear before it. MCR 2.613(C).

III. NONCOMPETITION AGREEMENT

Prentice challenges the enforceability of the noncompetition provisions that he agreed to in October 2009, as part of his employment agreement with TRI. Prentice argues that the trial court improperly relied on his acknowledgment in the employment agreement that the noncompetition agreement was reasonable, and failed to recognize that the Antitrust Reform Act, MCL 445.771 et seq., requires a judicial determination of reasonableness that trumps the parties’ freedom to contract. He requests that this Court determine whether the noncompetition agreement is unreasonable and unenforceable.

Section 4a(1) of the Antitrust Reform Act, MCL 445.774a(1), expressly allows an employer and an employee to enter into “an agreement or covenant which protects an employer’s reasonable competitive business interests and expressly prohibits an employee from engaging in employment or a line of business after termination of employment if the agreement or covenant is reasonable as to its duration, geographical area, and the type of employment or line of business.” MCL 445.774a(1). This statute was intended to revive common-law standards for enforcing noncompetition agreements. Coates v Bastian Bros, Inc, 276 Mich App 498, 507; 741 NW2d 539 (2007). At common law, the reasonableness of a noncompetition agreement was determined by the circumstances that existed when the agreement was made. Hubbard v Miller, 27 Mich 15, 19 (1873). The agreement must (1) have an honest and just purpose, (2) protect legitimate interests of the party in whose favor it is imposed, (3) be reasonable between the parties, and (4) not be specially injurious to the public. St Clair Med, PC v Borgiel, 270 Mich App 260, 266; 715 NW2d 914 (2006).

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Best Team Ever Inc v. Matthew K Prentice, Counsel Stack Legal Research, https://law.counselstack.com/opinion/best-team-ever-inc-v-matthew-k-prentice-michctapp-2015.