United Rentals (North America), Inc. v. Keizer

202 F. Supp. 2d 727, 2002 U.S. Dist. LEXIS 6747, 2002 WL 992500
CourtDistrict Court, W.D. Michigan
DecidedApril 5, 2002
DocketCase 1:00CV831
StatusPublished
Cited by8 cases

This text of 202 F. Supp. 2d 727 (United Rentals (North America), Inc. v. Keizer) is published on Counsel Stack Legal Research, covering District Court, W.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United Rentals (North America), Inc. v. Keizer, 202 F. Supp. 2d 727, 2002 U.S. Dist. LEXIS 6747, 2002 WL 992500 (W.D. Mich. 2002).

Opinion

OPINION RE CROSS MOTIONS FOR SUMMARY JUDGMENT

HILLMAN, Senior District Judge.

This is a diversity action alleging six counts: (1) breach of employment agreement; (2) violation of the Michigan Trade Secrets Act, Mich. Comp. Laws § 445.1901 et seq.; (3) tortious interference with business relations; (4) tortious interference with contract; (5) civil conspiracy; and (6) breach of fiduciary duty of loyalty. The action also includes a counterclaim by defendant Jerry Keizer for breach of employment agreement. The matter presently is before the court on cross motions for summary judgment. Defendant/Counter-plaintiff Jerry Keizer and defendant Grant Rent-All seek summary judgment on all claims against them (dkt # 66). 1 Plaintiff/counter-defendant United Rentals (North America), Inc., moves for summary judgment on Count I of its complaint and summary judgment on the counterclaim against it (dkt#71, 72). For the reasons that follow, defendants’ motion for summary judgment is GRANTED and plaintiffs cross-motion for summary judgment on Count 1 is DENIED. Plaintiffs motion for summary judgment on the counterclaim is GRANTED.

I.

Plaintiff United Rentals (North America), Inc., (“United”) is in the business of selling and renting construction and industrial equipment. Defendant Jerry Keizer (“Keizer”), together with his wife, was a former one-third owner and General Sales Manager of Kubota of Grand Rapids, Inc. (“GR Kubota”). Grand Valley Investments, LLC (“GVI”), a limited liability company consisting of the five Grasman brothers (Larry, Jack, Terry, Russ and Rick) owned the other two-thirds of GR Kubota. GVI also fully owned and operated an equipment business in Hudsonville known as Grand Valley Equipment Company, Inc. (“GVEC”).

Keizer also has been the owner and president of Grant Rent-All since its formation in December 1994. Grant Renb-All is in the business of selling construction and industrial equipment and is located within Newaygo County, Michigan. Although Keizer was president of Grant Renb-All since 1994, he never worked there until May 2000. Grant Rent>-All is managed by Keizer’s step-son and stepson-in-law.

Mulder’s Outdoor Power Equipment is also in the business of renting and selling construction and industrial equipment and is located in Kent County, Michigan. Ron *731 Keizer, brother of defendant Keizer, is employed by Mulder’s.

In April 1998, United offered to purchase all of the stock of GR Kubota and GVEC for $22.75 million. In its offer, United required a five-year non-compete agreement from the owners of the companies.

GVI determined that it would buy out Keizer’s interest in GR Kubota prior to selling GR Kubota and GVEC to United. It therefore made an offer to Keizer to buy out his stock interest for a purchase price, in conjunction with a five-year employment agreement that included an agreement not to compete anywhere in Michigan west of 1-75 and US-28. Keizer refused to sign such an unlimited non-competition agreement because of his then-current involvement with Grant Rent-All. GVI agreed to modify the non-competition agreement to exclude Newaygo County.

The evidence is undisputed that at the time of the agreements, the Grasman brothers were all aware of the existence of Grant Rent-All, that Keizer had an interest in Grant Rent All, and that his son and son-in-law operated the company. The attorney for GVI conveyed to United that Keizer and/or his affiliates (his sons) had such an interest. (Def. Ex. H at 178-81; Def. Ex. D; Def. Ex. Q at 17-20; Def. Ex. P at 17; Def. Ex. R at 26-28.) The evidence also is undisputed that between January 1995 and May 1998, approximately two-thirds of the customers of Grant Rent-All were located in Newaygo County. The remaining one-third were located outside of Newaygo County. (Def. Ex. A, ¶¶ 4-5; Def. Ex. R at 66, 68, 82.)

Keizer ultimately entered into a stock option agreement with GVI, in which he agreed to sell his shares of GR Kubota to GVI for $1,475,000.00. Under the Stock Option' Agreement, Keizer agreed that if GVI exercised its option, Keizer would enter into a covenant “not to compete with GR Kubota and GVEC for five years (except in Newaygo County) and otherwise in form and substance agreeable to URI [United Rentals, Inc.].... ” The agreement also provided that if GVI exercised the option, GR Kubota would enter into a five-year employment agreement with Keizer at a salary of $75,000.00 per year, plus benefits. According to the option agreement, Keizer’s employment agreement would be terminable only for just cause.

Subsequently, GVI exercised its stock option. On June 1, 1998, Keizer signed an employment agreement with GR Kubota. That agreement provided that:

This Agreement contains the entire agreement of the parties and supersedes all prior or contemporaneous negotiations, correspondence, understandings and agreements between the parties, regarding the subject matter of this Agreement. This agreement may not be amended or modified except in writing signed by both parties and supported by new consideration.

(Def.Ex.F, ¶ 12.)

The non-competition, non-solicitation portion of the employment agreement provides in relevant part:

For a period commencing on the Closing Date and terminating five (5) years thereafter (the “Restricted Period”), neither the Employee nor any of his Affiliates shall, anywhere in the Target Area, (as herein defined), directly or indirectly, acting individually or as the owner, shareholder, partner, or employee of any entity, (i) engage in the operation of any equipment sale, rental or leasing business; (ii) enter the employ of, or render any personal services to or for the benefit of, or assist in or facilitate the solicitation of any business engaged in such activities; or (iii) receive or purchase a financial interest in, make a loan to, or make a gift in support of, any such *732 business in any capacity, including, without limitation, as sole proprietor, partner, shareholder, officer, director, principal, agent, trustee or lender .... For purposes hereof, the term “Target Area” shall mean the area within the state of Michigan west of 1-75 and U.S. Route 23, but shall exclude Newaygo County.

(Def.Ex.F, ¶ 7.2.) The employment agreement also contained a confidentiality provision, which states:

During the Restricted Period and thereafter, the Employee shall keep secret and retain in strictest confidence, and shall not use for the benefit of himself or others, all data and information relating to the Business (“Confidential Information”), including, without limitation, know-how, trade secrets, customer lists, supplier lists, details of contracts, pricing policies, operational methods, marketing plans or strategies, bidding information, practices, policies or procedures, product development techniques or plans, and technical processes; provided, however, that the term “Confidential Information” shall not include information that (i) is or becomes generally available to the public other than as a result of disclosure by the Employee, or (ii) is general knowledge in the equipment, rental, sales or leasing business and not specifically related to the Business.

(Def.Ex.F., ¶ 7.3.)

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Cite This Page — Counsel Stack

Bluebook (online)
202 F. Supp. 2d 727, 2002 U.S. Dist. LEXIS 6747, 2002 WL 992500, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-rentals-north-america-inc-v-keizer-miwd-2002.