Sarkissian Mason, Inc. v. Enterprise Holdings, Inc.

955 F. Supp. 2d 247, 2013 WL 3585313, 2013 U.S. Dist. LEXIS 98733
CourtDistrict Court, S.D. New York
DecidedJuly 15, 2013
DocketNo. 11 Civ. 09472(LGS)
StatusPublished
Cited by10 cases

This text of 955 F. Supp. 2d 247 (Sarkissian Mason, Inc. v. Enterprise Holdings, Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sarkissian Mason, Inc. v. Enterprise Holdings, Inc., 955 F. Supp. 2d 247, 2013 WL 3585313, 2013 U.S. Dist. LEXIS 98733 (S.D.N.Y. 2013).

Opinion

ORDER & OPINION

LORNA G. SCHOFIELD, District Judge:

Plaintiffs Sarkissian Mason, Inc. (“Sarkissian”) and AutoMatic, Inc. (“AutoMatic”) bring this action against Defendant Enterprise Holdings, Inc (“Enterprise”), alleging that Plaintiffs brought a proprietary business proposal to Enterprise, which Enterprise allegedly misappropriated for its own use. Plaintiffs allege five claims against Defendant: breach of a nondisclosure agreement, estoppel, unjust enrichment, misrepresentation and misappropriation of a trade secret. Defendant Enterprise moves for summary judgment. For the reasons stated below, the motion is GRANTED as to all counts, and the case is DISMISSED.

I. Background Facts

A. The Parties’ Relationship and Negotiations

Defendant Enterprise is a holding company that through its subsidiaries owns and operates a fleet of rental vehicles under several brand names. Plaintiffs are Sarkissian, a privately-owned digital marketing agency, and AutoMatic, its wholly owned subsidiary. In October 2010, Sarkissian and Enterprise entered into a nondisclosure agreement (“NDA”) that prohibited the public disclosure, use or copying of “Confidential Information” as defined in the contract and shared between the parties, while they conducted business and explored new business ventures.

Enterprise had an insight that they could “monetize” the results of a study (the “Polk Study”) showing that consumers renting cars in the “insurance replacement market” are more likely to buy the cars they are driving than they otherwise would be because they are in effect test-driving the car. Consumers in the insurance re[250]*250placement market are those whose insurance paid for a rental car replacement vehicle because their car was damaged or “totaled” in an accident, and therefore these consumers are very likely to be in the market for a car. In March 2011, Enterprise asked Plaintiffs, who were experts in digital marketing, to design a program that would use the insight of the Polk Study to enhance the value of Enterprise’s insurance replacement rental fleet to manufacturers. The parties began discussions to develop a concept ultimately named the AutoMatic Buying Service.

Plaintiffs proposed to Enterprise, through a series of pitches embodied in five PowerPoint presentations, a way that automobile renters could use their mobile devices in rental cars to connect with automobile dealers, obtain quotes and ultimately buy automobiles. Plaintiffs made the presentations in St. Louis, Missouri, and presented a concept that essentially consisted of the following features:

1) Present an auto manufacturer with the marketing program, showing them that certain areas are ripe for “conquest” — namely a geographic area where the manufacturer could place its fleet with Enterprise in an effort to grow the manufacturer’s market share through the insurance replacement market.
2) When the consumer arrives at the Enterprise rental company, tell them about the opportunity to buy the type of car they are driving.
3) Place a QR code on the car’s key fob and/or elsewhere in the car that would lead the consumer to a website built and operated by AutoMatic. The website would contain marketing content “specifically designed to persuade them to purchase the same model car they were driving.”
4) The consumer could then opt into the program and request a price quote for the vehicle. These “leads” would be sent to dealers who could contact the consumer to pursue a sale.
5) Consumers who opted in also would receive emails from AutoMatic providing them with information such as current sales on the model they drove.
6) AutoMatic would make money by selling the leads to the dealers.

Plaintiffs maintain that they were “always willing to structure the mobile engagement concept to permit renters to go directly” to the manufacturers’ websites, but never presented such an idea to Defendant.

In July 2011, Enterprise and AutoMatic discussed the contours of a potential agreement, exchanging a series of emails highlighting areas of consensus and disagreement. A major issue was AutoMatic’s insistence that their program and website be used in all Enterprise rental ears to the exclusion of any alternative. Enterprise wanted manufacturers to be able to choose: “I feel we are all best served by supporting the paths the [manufacturers] wish to pursue. With so many ideas competing for the [manufacturer’s] marketing resources, we may find some want the simple engagement linked to existing Mobile [sic] sites while others will choose to pursue a deep engagement that moves lower funnel consumers to submit for a sales lead.” In July 2011, Enterprise told Mazda North American Operations (“Mazda”) that Enterprise was working with Plaintiffs to develop the AutoMatic Buying Service. This was after Plaintiffs already had discussed the AutoMatic Buying Service with Mazda.

In August 2011, Plaintiffs sent Enterprise their first draft of a “Strategic Relationship Agreement” that would govern the development and roll out of the Auto[251]*251Matic Buying Service. The draft agreement was between Plaintiff AutoMatie and Enterprise, and recited as AutoMatic’s chief obligation the development of technology using QR codes or other URL referencing technology that would allow consumers to access online information about their rental cars. The technology also would collect information about consumers and their experience with the rental car. The agreement proposed that Enterprise would install the QR codes at the direction of AutoMatie, and that Enterprise would provide AutoMatie with access to their manufacturing partners. The agreement also contemplated an exclusivity provision that would prevent Enterprise from creating any technology that was “similar to” or competed with the AutoMatie Buying Service concept. That provision added that nothing in the exclusivity provision was intended to prevent Enterprise from “instituting similar barcode scanning applications into its Rental Services or Rental Vehicles for other purposes.”

The parties negotiated the contract, which they each understood was not binding without being signed. Enterprise continued to object to AutoMatic’s exclusivity provision and broad access to its entire fleet, but the objections did not concern Plaintiffs’ fundamental obligation to develop technology. In September 2011, as the parties continued their negotiations, they discussed the “need to sell [the AutoMatie Buying Service] together to [manufacturers] [rather than] trying to go in after or separately which would be too clumsy,” and further discussed the need to push manufacturers to the AutoMatie Buying Service, rather than simply letting the manufacturer “send traffic to their [own] website from the QR code” as there would be “little value that way and no reason for” AutoMatie to build the AutoMatie Buying Service in that scenario.

The disputes proved intractable. In October 2011, Enterprise told Plaintiffs that “to the extent the [manufacturers] opt to have the renter QR code click go to their own website which doesn’t offer something as unique, fun, different, and engaging” as AutoMatie could create, Enterprise had to offer manufacturers that flexibility.

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Bluebook (online)
955 F. Supp. 2d 247, 2013 WL 3585313, 2013 U.S. Dist. LEXIS 98733, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sarkissian-mason-inc-v-enterprise-holdings-inc-nysd-2013.