NEDSCHROEF DETROIT CORPORATION et al v. BEMAS ENTERPRISES LLC et al
Filing
43
OPINION and ORDER Granting In Part and Denying In Part Plaintiff's 37 Motion for Summary Judgment. Signed by District Judge Linda V. Parker. (Loury, R)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
NEDSCHROEF DETROIT
CORPORATION,
NEDSCHROEF HERENTALS
N.V., and KONINKLIJKE
NEDSCHROEF HOLDING
B.V.,
Plaintiffs,
v.
Civil Case No. 14-10095
Honorable Linda V. Parker
BEMAS ENTERPRISES LLC,
MARC A. RIGOLE, and
BERNARD E. LEPAGE,
Defendants.
__________________________/
OPINION AND ORDER GRANTING IN PART AND DENYING IN PART
PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT
Plaintiffs initiated this lawsuit after discovering that Defendants Marc A.
Rigole (“Rigole”) and Bernard E. LePage (“LePage”), former employees of
Plaintiff Nedschroef Detroit Corporation (“Nedschroef Detroit”), had formed a
competing company, Bemas Enterprises LLC (“Bemas”) while still working for
Nedschroef Detroit. According to Plaintiffs, Rigole and LePage used Plaintiffs’
equipment, personnel, and trade secrets to start up and run Bemas. Presently
before the Court is Plaintiffs’ motion for summary judgment, filed pursuant to
Federal Rules of Civil Procedure 56 on February 16, 2015. The motion has been
fully briefed. Finding the facts and legal arguments sufficiently presented in the
parties’ pleadings, the Court dispensed with oral argument pursuant to Eastern
District of Michigan Local Rule 7.1(f) on April 30, 2015. For the reasons that
follow, the Court grants summary judgment to Plaintiffs on all but two of their
claims.
I.
Summary Judgment Standard
Summary judgment pursuant to Federal Rule of Civil Procedure 56 is
appropriate “if the movant shows that there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). The central inquiry is “whether the evidence presents a sufficient
disagreement to require submission to a jury or whether it is so one-sided that one
party must prevail as a matter of law.” Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 251-52 (1986). After adequate time for discovery and upon motion, Rule 56
mandates summary judgment against a party who fails to establish the existence of
an element essential to that party’s case and on which that party bears the burden
of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
The movant has the initial burden of showing “the absence of a genuine
issue of material fact.” Id. at 323. Once the movant meets this burden, the
“nonmoving party must come forward with specific facts showing that there is a
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genuine issue for trial.” Matsushita Electric Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 587 (1986) (internal quotation marks and citation omitted). To
demonstrate a genuine issue, the nonmoving party must present sufficient evidence
upon which a jury could reasonably find for that party; a “scintilla of evidence” is
insufficient. See Liberty Lobby, 477 U.S. at 252.
“A party asserting that a fact cannot be or is genuinely disputed” must
designate specifically the materials in the record supporting the assertion,
“including depositions, documents, electronically stored information, affidavits or
declarations, stipulations, admissions, interrogatory answers, or other materials.”
Fed. R. Civ. P. 56(c)(1). The court must accept as true the non-movant’s evidence
and draw “all justifiable inferences” in the non-movant’s favor. See Liberty Lobby,
477 U.S. at 255.
II.
Factual and Procedural Background
Nedschroef Herentals, N.V. is a Dutch manufacturer of industrial machines
that produce metal fasteners, such as nuts, bolts, and screws. Dozens of North
American fastener manufacturers use those machines. In order to service and
provide replacement parts for the machines, Nedschroef Detroit was formed as a
Michigan corporation in approximately 1991. Nedschroef Detroit and Nedschroef
Herentals are subsidiaries of Nedschroef Holding B.V. (collectively
“Nedschroef”).
3
Rigole was assigned to run Nedschroef Detroit when it first opened. (Pls.’
Mot., Ex. 2 at 13-16.) He served as the manager of Nedschroef Detroit from 19911996 and from 2004-2013. As the manager, Rigole was the highest ranking
Nedschroef employee in North America, and supervised the other Nedschroef
Detroit employees. (Id. at 16, 27-28.) Rigole’s job duties included servicing
Nedschroef machines and providing replacement parts for those machines. Rigole
had the authority to issue quotations, order replacement parts from suppliers, enter
into contracts, and sign checks on behalf of Nedschroef. (Id. at 27.) He also had
access to Nedschroef’s passcode-protected proprietary part design drawings,
customer lists, supplier lists, pricing information, and financial information. (Id. at
19, 21-24, 28, 55-56.)
In 2005, LePage was hired to work as a project and service engineer for
Nedschroef Detroit. (Pl.’s Mot., Ex. 3 at 11.) His job duties included servicing
Nedschroef machines and providing replacement parts for those machines. (Id. at
19-20.) LePage also had the authority to issue quotations, order replacement parts
from suppliers, enter into contracts, and sign checks on behalf of Nedschroef. (Id.
at 19-20, 23.) He also had access to Nedschroef’s passcode-protected proprietary
part design drawings, customer lists, supplier lists, pricing information, and
financial information. (Id. at 20, 22, 27.)
4
In December 2010 or January 2011, Rigole, LePage, and other Nedschroef
Detroit employees were informed that Nedschroef Detroit would be closed within a
year unless its business improved. (Pls.’ Mot., Ex. 2 at 39-41, 74; Ex. 3 at 16-18,
31; Ex. 6 at 7.) Employees, including Rigole and LePage, received a pay cut at
this time. (Id., Ex. 2 at 40; Ex. 3 at 18.) About a month later, Rigole, LePage,
Rigole’s wife Christine Van Looveren (“Van Looveren”), and LePage’s then
girlfriend and now wife Cynthia Lupo (“Lupo”), began to discuss the idea of
forming a company to service Nedschroef machines and supply replacement parts
for those machines purportedly in the event that Nedschroef Detroit closed. (Pl.’s
Mot., Ex. 2 at 39-40; Ex. 3 at 31, 36; Ex. 4 at 9; Ex. 5 at 10.) They formed Bemas
a few months later, in about June 2011, naming Van Looveren and Lupo as its
owners. (Id., Ex. 6 at 6.)
According to Rigole, Bemas was formed under Van Looveren’s and Lupo’s
names instead of Rigole’s and LePage’s names because an unidentified lawyer
advised them that it was illegal for Rigole and LePage to open the company under
their own names. (Pl.’s Mot., Ex. 2 at 42-43.) As reflected in Van Looveren’s and
Lupo’s deposition testimony in this matter, they in fact never participated in the
daily operations of Bemas and know little about Bemas’ business. (Id., Ex. 4 at
14-19, 24-25, 30; Ex. 5 at 9-17.) LePage acknowledged during his deposition that
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Van Looveren and Lupo were “not really active” in the business of Bemas and that
they probably never sent an email from Bemas’ address. (Id., Ex. 3 at 40, 56.)
Rigole and LePage began selling goods and performing services on behalf of
Bemas beginning in mid-June 2011, while they were still employed by Nedschroef
Detroit.1 The goods sold were replacement parts for Nedschroef machines and the
services performed were on Nedschroef machines. (Id., Ex. 2 at 204-05; Ex. 3 at
46-47.) Dozens of purchase orders, quotations, and invoices reflect that Rigole and
LePage, on behalf of Bemas, competed directly with Nedschroef Detroit from midJune 2011 forward. (Pl.’s Mot., Ex. 9; Ex. 2 at 119-73.)
Plaintiffs allege that Rigole and LePage used Plaintiffs’ proprietary drawings
of replacement parts in connection with Bemas’ business. Steven Woloszyk, a
former Nedschroef Detroit employee, testified during his deposition that Rigole
instructed him to create “Bemas” drawings from original Nedschroef drawings,
despite the warnings on the latter drawings that they not be reproduced. (Pls.’
Mot., Ex. 13 at 35-39, 42-56, 67; Ex. 14.) Plaintiffs also retained an expert in
engineering and design, Thomas DeAgostino, who concluded that Bemas drawings
During their depositions in this matter, Rigole and LePage initially denied
working for Bemas while employed by Nedschroef Detroit. (Pls.’ Mot., Ex. 2 at
30, 32, 61, 70-72, 103; Ex. 3 at 39, 57.) When confronted with documentary
evidence disproving their testimony, however, Rigole and LePage admitted that
they performed services for Bemas while still employed by Nedschroef Detroit.
(Id., Ex. 2 at 34, 51-52, 57-58, 61-70, 81-83, 97-98, 112-115, 119-121, 125-129,
132-133, 135-174, 202-209, 220-222, 224-226; Ex. 3 at 40, 47-48, 56-59, 64-70,
73, 76-104, 115-119; Exhibit 6 at 17, 29-30, 74-75.)
6
1
could have been created only by copying Nedschroef drawings and were not
created through “reverse engineering”-- a process by which a drawing is created by
analyzing the part itself (Id., Ex. 15.) Plaintiffs also hired a computer forensic
expert who determined that Rigole and LePage downloaded multiple files from
their Nedschroef computers, including proprietary drawings. (Id., Ex. 25.)
Rigole and LePage testified during their depositions, however, that any
drawings of parts were received from customers ordering parts from Bemas or
through reverse engineering. (Pls.’ Mot., Ex. 2 at 47-49, 54, 137-38, 199; Ex. 3 at
65, 66, 81; Ex. 6 at 17-18; 61-62, 6870; Defs.’ Resp. Ex. 4 ¶ 4.) Rigole attests in
an affidavit attached to Defendants’ response brief that neither he nor Bemas
removed, kept, or maintained drawings of parts of the like from Plaintiffs. (Defs.’
Mot., Ex. 4 ¶ 3.) Rigole denies asking Woloszyk to make any drawings for Bemas
based on Nedschroef drawings. (Pls.’ Mot., Ex. 2 at 50, 108; Defs.’ Resp., Ex. 4
¶ 6.) According to Rigole, Woloszyk volunteered to create those drawings. (Pls.’
Mot., Ex. 2 at 50, 108.) In his affidavit, Rigole states that Bemas never used any
drawings made by Woloszyk for any purpose and that he believes Woloszyk made
the drawings in an attempt to obtain a job with Bemas. (Defs.’ Resp., Ex. 4 ¶¶ 89.)
Plaintiffs also allege that Rigole and LePage obtained from Plaintiffs’
private server a list of all customers in North America that purchased a Nedschroef
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machine-- the same customers which formed Nedschroef Detroit’s customer list
for replacement parts and service. (Pls.’ Mot., Ex. 1.) This list was available only
to authorized personnel on Plaintiffs’ password-protected server. (Id.) At his
deposition, LePage acknowledged that such a list was maintained on Plaintiffs’
computer system (Id., Ex. 3 at 20); however, Rigole states in his affidavit that he is
unaware of such a list. (Defs.’ Resp., Ex. 4 ¶ 5.) According to Rigole, through his
years working at Nedschroef Detroit, he has learned the names of the North
American companies with Nedschroef machines and has established “pretty good”
relationships with individuals at those companies. (Pls.’ Mot., Ex. 2 at 58.)
According to Rigole and LePage, when those individuals contacted them in
their capacity as employees of Nedschroef Detroit and expressed that Nedschroef
Detroit’s price quote was too high or the delivery time too long for a part, Rigole
or LePage would tell the customer about Bemas and provide a quote for the part or
service from Bemas. (Id. at 67-68; Ex. 3 at 47, 57, 58-59; Ex. 6 at 39.) Rigole and
LePage maintain that they had little control over Nedschroef Detroit pricing, as
pricing decisions were made at the corporate level in Belgium. (Id., Ex. 2 at 23,
72; Ex. 3 at 22-23.) They had access to Plaintiffs’ price list, however, and were
aware of how Plaintiffs calculated their sales prices. (Id., Ex. 2 at 28; Ex. 6 at 24.)
LePage testified as Bemas’ corporate representative that, when parts from Bemas
are cheaper than from Nedschroef Detroit, it is because Bemas’ profit margin is not
8
as big. (Id., Ex. 6 at 23-24.) Rigole describes Bemas as thus “filling up a gap” that
was created by Plaintiffs’ excessive prices. (Id., Ex. 2 at 204.) It is not disputed
that almost all of Bemas’ customers were first customers of Nedschroef Detroit,
and almost all of the goods and services offered by Bemas are offered by
Nedschroef Detroit. (Id. at 58, 64-70, 114, 116-17, 127, 133, 142, 144, 148, 16768, 204-205; Ex. 3 at 46-47, 63-64, 74, 77-78, 80; Ex. 6 at 38-40.)
In addition to appropriating Plaintiffs’ proprietary drawings and customer
list, Plaintiffs allege that Defendants used Nedschroef Detroit’s employees,
equipment, warehouse and other resources to run Bemas and compete against
Nedschroef Detroit. For example, for the first two and a half years of Bemas’
existence, Rigole and LePage conducted the company’s business while employed
by Nedschroef Detroit and using their Nedschroef-owned computers. (See, e.g.,
Pls.’ Mot., Ex. 2 at 75-76, 157.) Bemas documents reflect, and Defendants
confirmed during their testimony, that suppliers shipped parts to Bemas at
Nedschroef Detroit’s warehouse, where Bemas would use Nedschroef Detroit’s
forklift to unload the goods and then ship them to Bemas’ customers. (Pls.’ Mot.,
Ex. 23; Ex. 2 at 119-29, 140-41, 143, 148, 162-63, 165-55, 205-06; Ex. 3 at 64-65,
67, 81-93, 97, 104.)
Plaintiffs maintain that Rigole’s and LePage’s work for Bemas while
employed by Nedschroef Detroit, ordering the same replacement parts from the
9
same suppliers and offering the same goods and services to the same customers on
behalf of Bemas and Nedschroef Detroit, led to customer confusion. As evidence
of this confusion, Plaintiffs point to an email exchange between Rigole and Rich
Wojtasik from Orttech. On March 15, 2012, Rigole wrote Wojtasik:
Hi Rich,
The drawing #1A 643A 041977 for the bore of the clutch is ok
(approved)
Please do not send emails concerning Bemas to my Nedschroef email
address.
Thanks and Regards
Marc
(Pls.’ Mot., Ex. 20.) Wojtasik responded:
Marc,
The 0400 size 85 is a Nedschroef order, is it not? Greg quoted this to
Nedschroef and I assumed this is who we sold it too [sic], so PO
2012-120-5035 is for Bemas?
(Id.) On October 18, 2013, Todd Miller of Kamax sent “Nedschroef Order PO
400005267” to Bemas. (Pls.’ Mot., Ex. 21.) When asked if it looked like Kamax
was confused, LePage answered: “Most definitely.” (Pls.’ Mot., Ex. 3 at 106.)
LePage and Rigole identified other instances where suppliers appeared confused
with respect to the business with which they were dealing. (Id. at 75-76, 98, 10607; Ex. 2 at 148-49, 166-67, 177.)
After discovering their competing business, Nedschroef terminated Rigole’s
and LePage’s employment on July 17, 2013.
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According to Plaintiffs’ expert in financial valuation and economic damages,
Andrew M. Malec, Ph.D., from the time they started Bemas until their termination
from Nedschroef Detroit, Rigole was paid $281,143 in wages and LePage was paid
$286,749 in wages. (Pls.’ Mot., Ex. 26 at 4.) Malec concludes that Bemas’ net
profits from 2011 through the end of 2013 were $393,971. (Id.) Malec calculates
Plaintiffs’ total damages through December 31, 2013 to be $961,863. (Id. at 5.)
Plaintiffs indicate that Defendants provided insufficient discovery responses and
thus did not provide all documentation relevant to computing damages. For
example, LePage failed to produce his W-2 for 2011 and no financial
documentation for 2014 was provided.
In their Complaint, Plaintiffs assert that the above-described conduct by
Defendants constitutes:
(I) false designation/false advertising in violation of the Lanham Act,
15 U.S.C. § 1125(a);
(II) violation of the Michigan Consumer Protection Act, Mich. Comp.
Laws § 445.901 et seq.;
(III) violation of the Michigan Uniform Trade Secrets Act, Mich.
Comp. Laws § 445.1902;
(IV) unfair competition;
(V) conversion;
(VI) statutory conversion, Mich. Comp. Laws § 600.2919a;
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(VII) tortious interference with Plaintiffs’ business relationships
and/or expectancies of business relationships;
(VIII) unjust enrichment;
(IX) civil conspiracy;
(X) breach of duty of loyalty by LePage and Rigole; and,
(XI) breach of fiduciary duty and misappropriation of corporate
opportunities by LePage and Rigole.
(ECF No. 1.) In their pending motion, Plaintiffs seek summary judgment with
respect to all counts of their Complaint and ask the Court to enter an award of
damages and a permanent injunction precluding Defendants from providing
replacement parts and services for Nedschroef machines in North America. With
respect to damages, Plaintiffs ask that any award include interest, treble damages,
and attorney’s fees pursuant to Michigan’s conversion statute, Michigan Compiled
Laws Section 600.2919a.
III.
Applicable Law and Analysis of Plaintiffs’ Claims
A.
Misappropriation of Plaintiffs’ Corporate Opportunities &
Breach of Fiduciary Duty & Duty of Loyalty
During their employment, Rigole and LePage were agents of Nedschroef
Detroit. See Credit Acceptance Corp. v. Dep’t of Treasury, 601 N.W.2d 109, 112
(Mich. Ct. App. 1999) (quoting Stephenson v. Golden, 276 N.W. 849, 857 (Mich.
1937) (defining an “agent” in part as “one who acts for or in the place of another
by authority from him; one who undertakes to transact some business or manage
12
some affairs for another by authority and on account of the latter, and to render an
account to it . . ..”)). “Under principles of agency, an agent owes his principal a
duty of good faith, loyalty, and fair dealing.” H.J. Tucker & Assoc., Inc. v. Allied
Chucker & Eng’g Co., 595 N.W.2d 176, 188 (Mich. Ct. App. 1999) (citing Burton
v. Burton, 51 N.W.2d 297, 303 (1952)). The Michigan Courts have held that these
duties prohibit an agent from “act[ing] for himself at his principal’s expense during
the course of his agency.” Central Cartage Co. v. Fewless, 591 N.W.2d 422, 426
(Mich. Ct. App. 1998) (citing Prod. Finishing Corp. v. Shields, 405 N.W.2d 171,
174 (Mich. Ct. App. 1987)). The Michigan Supreme Court has explained:
“[A]s to engaging in other business, it is an elemental rule of
agency that his duties required his efforts and activities in the line of
his employment should be for the benefit of his principal, and he was
not at liberty to deal in the business of his agency for his own benefit.
It was his duty to communicate to his principal facts relating to the
business which ought in good faith be made known to the latter. . . .
The well settled and salutary principle that a person who
undertakes to act for another shall not, in the same matter, act for
himself, results also in the other rule, that all profits made and
advantage gained by the agent in the execution of the agency belong
to the principal. And it matters not whether such profit or advantage
be the result of the performance or of the violation of the duty of the
agent if it be the fruit of the agency.”
Prod. Finishing, 405 N.W.2d at 174 (quoting Mich. Crown Fender Co. v. Welch,
178 N.W. 684, 688 (Mich. 1920)) (internal quotation marks omitted). The Court
subsequently stated: “[T]he law will not permit an agent to act in a dual capacity in
which his interest conflicts with his duty, without a full disclosure of the facts to
13
his principal.” Sweeney & Moore v. Chapman, 294 N.W. 711, 712-713 (Mich.
1940). “Although the parameters of this duty are not well-defined, some general
rules exist. For example, an employee may take steps to establish a competing
business while still employed without breaching the duty of loyalty, but the
employee may not actually commence competition.” In re Sullivan, 305 B.R. 809,
819 (Bankr. W.D. Mich. 2004).
Defendants argue that they did not usurp any of Plaintiffs’ corporate
opportunities because “Bemas would only provide parts and/or service to
Nedschroef machines if customers previously requested a quote for the same part
or service from Nedschroef and the quote was rejected by the customer.” (Defs.’
Resp. Br. at 3.) Thus, Defendants maintain, “Bemas was not in any way in direct
competition with Plaintiff[]” and “[n]o evidence has been provided to show that
Bemas took any business from Plaintiff.” (Id.) Even if true, however, Michigan
case law establishes that LePage and Rigole breached their fiduciary duties and
misappropriated Plaintiffs’ corporate opportunities. Prod. Finishing, 405 N.W.2d
at 175; Rapistan Corp. v. Michaels, 511 N.W.2d 918 (Mich. Ct. App. 1994)
(“[W]hen a corporation’s fiduciary uses corporate assets to develop a business
opportunity, the fiduciary is estopped from denying that the resulting opportunity
belongs to the corporation whose assets were misappropriated, even if it was not
14
feasible for the corporation to pursue the opportunity or it had no expectancy in
the project.”) (emphasis added).
In Production Finishing, the plaintiff provided goods and services to the
automotive industry, which included the service of steel polishing. 405 N.W.2d at
172. The plaintiff did most of the polishing work in the Detroit area with the
exception of the polishing work for Ford Motor Company which had its own
polishing plant. Id. The acquisition of the Ford business was a longstanding
objective of the plaintiff. Id. When the plaintiff’s president, the defendant, learned
that Ford was considering ceasing its polishing operation, he brought it to the
attention of the plaintiff’s board of directors which instructed the defendant to
investigate the matter. Id. at 172-73.
The defendant contacted a Ford representative to discuss the plaintiff’s
handling of Ford’s finishing business. Id. at 173. Ford’s representative indicated
that he was against the proposal because it would give the plaintiff a monopoly in
the area. Id. During the discussion, the defendant asked if Ford would let him do
the work in his individual capacity. Id. The defendant subsequently submitted a
confidential proposal to buy Ford’s equipment and provide polishing services to
Ford. Id. The plaintiff then sued the defendant, alleging usurpation of a corporate
opportunity, breach of fiduciary duties, and breach of contract.
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At trial, the plaintiff unsuccessfully moved for judgment notwithstanding the
verdict on its claims that the defendant breached his fiduciary duties and diverted a
corporate opportunity. The Michigan Court of Appeals reversed the trial court’s
denial of the plaintiff’s motion, holding that the defendant violated the law when
he pursued the Ford polishing business and purchased the Ford equipment while
serving as the plaintiff’s president without disclosing his actions to his employer.
Id. at 173-74. The court held that Ford’s refusal to deal with the plaintiff did not
relieve the defendant from liability when he failed to disclose the refusal to his
principal. Id. at 175.
The evidence shows that LePage and Rigole used Plaintiffs’ resources (such
as, computers, staff, warehouse, and a forklift) to start up and run Bemas. LePage
and Rigole did not inform their superiors that they were offering the same goods
and services to Nedschroef Detroit’s customers that Nedschroef Detroit offers
when the customers indicated that Nedschroef Detroit’s prices were too high or its
delivery time too long. In fact, LePage and Rigole did not tell their superiors that
they had started a competing business.
For these reasons, the Court concludes that Plaintiffs are entitled to summary
judgment with respect to their breach of duty of loyalty (Count X) and breach of
fiduciary duty and misappropriation of corporate opportunities (Count XI) claims
against LePage and Rigole.
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B.
Misappropriation of Trade Secrets
To succeed on a claim for misappropriation of a trade secret under Michigan
law, a plaintiff must prove: “1) the existence of a trade secret; 2) its acquisition in
confidence; and 3) the defendant’s unauthorized use of it.” Utilase, Inc. v.
Williamson, Nos. 98-1233, 98-1320, 1999 WL 717969, at *6 (6th Cir. Sept. 10,
1999 (citing Rothschild v. Ford Motor Co., 2 F. Supp. 2d 941, 950 (E.D. Mich.
1998) (citing Aerospace Am., Inc. v. Abatement Techs., 738 F. Supp. 1061, 1069
(E.D. Mich.1990)). The Michigan Uniform Trade Secrets Act (“MUTSA”) defines
a “trade secret” as
information, including a formula, pattern, compilation, program,
device, method, technique, or process, that is both of the following:
(i) Derives independent economic value, actual or potential, from not
being generally known to, and not being readily ascertainable by
proper means by, other persons who can obtain economic value from
its disclosure or use.
(ii) Is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.
Mich. Comp. Laws § 445.1902(d). Under MUTSA, “misappropriation” means one
of the following:
(i) Acquisition of a trade secret of another by a person who knows or
has reason to know that the trade secret was acquired by improper
means.
(ii) Disclosure or use of a trade secret of another without express or
implied consent by a person who did 1 or more of the following:
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(A) Used improper means to acquire knowledge of the trade secret.
(B) At the time of disclosure or use, knew or had reason to know that
his or her knowledge of the trade secret was derived from or through a
person who had utilized improper means to acquire it, acquired under
circumstances giving rise to a duty to maintain its secrecy or limit its
use, or derived from or through a person who owed a duty to the
person to maintain its secrecy or limit its use.
(C) Before a material change of his or her position, knew or had
reason to know that it was a trade secret and that knowledge of it had
been acquired by accident or mistake.
Mich. Comp. Laws § 445.1902(b). The statute defines the term “improper means”
to include “breach . . . of a duty to maintain secrecy . . ..” Id. § 445.1902(a).
Plaintiffs maintain that there is no genuine issue of material fact that
Defendants misappropriated Plaintiffs’ trade secrets, including its proprietary part
drawings and confidential customer lists. Defendants respond with evidence
creating an issue of fact with respect to whether LePage and Rigole took
proprietary drawings directly from Plaintiffs (and altered them) for use by Bemas
or whether they instead received those drawings through customers or reverse
engineering.2 Defendants also offer evidence creating an issue of fact with respect
Plaintiffs urge the Court to disregard Defendants’ evidence on these issues,
relying on the tenet that “[w]hen opposing parties tell two different stories, one of
which is blatantly contradicted by the record, so that no reasonable jury could
believe it, a court should not adopt that version of the facts for purposes of ruling
on a motion for summary judgment.” (Defs.’ Reply Br. at 4-5, citing Scott v.
Harris, 550 U.S. 372, 380 (2007); Peterson v. Hall, 2013 U.S. Dist. LEXIS
163225, at *8-9 n.3 (E.D. Mich. July 11, 2013).) The present situation is quite
unlike that in Scott and Peterson, however, where objective evidence in the record
18
2
to whether LePage and Rigole took an actual list of Nedschroef Detroit’s
customers from Plaintiffs or were aware of those customers simply through their
tenure at Nedschroef Detroit. Nevertheless, those factual issues are not material to
Plaintiffs’ misappropriation claim, at least with respect to Plaintiffs’ proprietary
drawings.3
Assuming Defendants’ version of the events as true, some of the drawings
Bemas used were Plaintiffs’ proprietary drawings which Defendants received from
their customers (i.e. former Nedschroef Detroit customers). At least some of those
blatantly contradicted one party’s version of the events or story. See Scott, 550
U.S. at 380-81 (videotape of police chase contradicted the plaintiff’s version of
events); Peterson, 2013 U.S. Dist. Lexis at *8-9 (MDOC records established that
the defendant was elsewhere and could not have been the person who allegedly
shut the plaintiff’s hand in his cell door). Here, LePage’s and Rigole’s testimony
is not “blatantly contradicted” by objective evidence.
3
If Plaintiffs’ misappropriation claim was premised only on their theory that
Defendants stole Plaintiffs’ customer list and the trier of fact accepted Defendants’
evidence that LePage and Rigole identified potential Bemas customers based only
on the contacts they established during their employment in the industry, Plaintiffs
could not prevail on their misappropriation claim. The Michigan Supreme Court
has held that “there is nothing improper in an employee establishing his own
business and communicating with customers for whom he had formerly done work
in his previous employment.” Hayes-Albion v. Kuberski, 364 N.W.2d 609, 615
(Mich. 1984). “Thus, customer lists developed by a former employee and
information relating to a customer’s needs are not ‘trade secrets’ under the
MUTSA, McKesson Medical-Surgical Inc. v. Bio-Medics, Inc., 266 F. Supp. 2d
590, 597-98 (E.D. Mich.2003), unless the employee is bound by a confidentiality
agreement. Hayes-Albion, 421 Mich. at 184, 364 N.W.2d at 615.” Wysong Corp.
v. M.I. Indus., 412 F. Supp. 2d 612, 629 (E.D. Mich. 2005). There is no evidence
that LePage or Rigole were bound by such an agreement.
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customers received the drawings from Rigole and LePage when they worked for
Nedschroef Detroit. (Pls.’ Mot., Ex. 2 at 47, 54, 95, 195-96; Ex. 3 at 26.) Rigole
and LePage acknowledged that those drawing were marked as confidential and
could not be given to Nedschroef Detroit’s customers, except in “exceptional
circumstances” after consultation with Belgium. (Id. Ex. 2 at 26, 80; Ex. 3 at 27.)
The drawings were only accessible through Plaintiffs’ passcode protected server.
Defendants in fact do not dispute that Plaintiffs’ drawings constitute trade secrets.
The undisputed evidence suggests that Defendants acquired Plaintiffs’ trade
secrets knowing that those trade secrets were acquired through breach of a duty to
maintain their secrecy. At the very least, Defendants knew that use of Plaintiffs’
proprietary drawings was limited to a use which served Plaintiffs. Yet Defendants
used those drawings for an unauthorized use-- i.e. to manufacture and sell parts to
be sold by Bemas in direct competition with Nedschroef Detroit.
The Court therefore concludes that Plaintiffs are entitled to summary
judgment with respect to their misappropriation claim (Count III).
C.
Conversion
In their Complaint, Plaintiffs assert common law and statutory conversion
claims. The first is established by showing “any distinct act of domain wrongfully
exerted over another’s personal property in denial of or inconsistent with the rights
therein.” Foremost Ins. Co. v. Allstate Ins. Co., 486 N.W.2d 600, 606 (Mich.
20
1992). “Conversion may occur when a party properly in possession of property
uses it in an improper way, for an improper purpose, or by delivering it without
authorization to a third party.” Dep’t of Agric. v. Appletree Mktg. LLC, 779
N.W.2d 237, 244-45 (Mich. 2010).
Michigan’s conversion statute provides, in pertinent part:
(1) A person damaged as a result of either or both of the following
may recover 3 times the amount of actual damages sustained, plus
costs and reasonable attorneys’ fees:
(a) Another person’s stealing or embezzling property or converting
property to the other person’s own use.
(b) Another person’s buying, receiving, possessing, concealing, or
aiding in the concealment of stolen, embezzled, or converted property
when the person buying, receiving, possessing, concealing, or aiding
in the concealment of stolen, embezzled, or converted property knew
that the property was stolen, embezzled or converted.
Mich. Comp. Laws § 600.2919a. In order to prevail on a claim for statutory
conversion, a plaintiff must satisfy the elements of a common law conversion
claim, as well as demonstrate that the defendant had “actual knowledge” of the
converting activity. See Echelon Homes, LLC v. Carter Lumber Co., 694 N.W.2d
544, 547-48 (2005) (holding that under Michigan’s conversion statute,
“constructive knowledge is not sufficient; a defendant must know that the property
was stolen, embezzled, or converted.”).
For the reasons discussed in the preceding sections, the undisputed evidence
establishes that Defendants converted Plaintiffs’ proprietary drawings and other
21
property when they used the property to directly compete against Nedschroef
Detroit. There can be no dispute that Plaintiffs knowingly converted Plaintiffs’
property. As such, the Court concludes that Plaintiffs are entitled to summary
judgment with respect to their conversion and statutory conversion claims (Counts
V and VI).
D.
The Lanham Act, Michigan Consumer Protection Act & Unfair
Competition
Plaintiffs assert that Defendants’ engagement in a competing business while
employed by Nedschroef Detroit caused confusion with respect to the source of the
goods and services provided to customers, thereby violating the Lanham Act,
Michigan Consumer Protection Act (“MCPA”), and unfair competition under the
common law. As Plaintiffs assert, to obtain summary judgment on each of these
claims, they must show that there is no genuine issue of material fact that
Defendants alleged activities resulted in a “likelihood of confusion.” Audi AG v.
D’Amato, 469 F.3d 534, 542 (6th Cir. 2006) (holding that the “likelihood of
confusion” test applies to claims for trademark infringement, unfair competition,
and false designation brought under the Lanham Act); Carson v. Here’s Johnny
Toilets, Inc., 698 F.2d 831, 833 (6th Cir. 1983) (holding the same as to claims of
unfair competition brought under Michigan common law); Homeowners Grp. v.
Home Mktg. Specialists, 931 F.2d 1100, 1105 n. 1 (6th Cir. 1991) (holding the
same as to claims brought under Michigan Consumer Protection Act). Not all
22
conduct that causes a likelihood of confusion is prescribed by the Lanham Act or
MCPA, however.
As relevant to Plaintiffs’ false designation/false advertising claim under the
Lanham Act, the statute imposes liability on “any person who, on or in connection
with any goods or services . . . uses in commerce . . . any false designation of
origin, false or misleading description of fact, or false or misleading
representation of fact, which . . . is likely to cause confusion, or to cause mistake,
or to deceive . . . as to the origin . . . of his goods, services, or commercial
activities.” 15 U.S.C. § 1125(a)(1)(A) (emphasis added). Plaintiffs do not allege
that Defendants used a false designation of origin, a misleading description of fact,
or made false or misleading representations of fact. According to Plaintiffs, any
confusion was simply caused by Rigole’s and LePage’s dual roles as
representatives of Nedschroef Detroit and Bemas. Thus Plaintiffs are not entitled
to summary judgment with respect to their Lanham Act claim.
The MCPA provides inter alia:
(1) Unfair, unconscionable, or deceptive methods, acts, or practices in
the conduct of trade or commerce are unlawful and are defined as
follows:
(a) Causing a probability of confusion or misunderstanding as to the
source, sponsorship, approval, or certification of goods or services.
Mich. Comp. Laws § 445.903 (emphasis added). The MCPA specifically defines
“trade or commerce” as “the conduct of a business providing goods, property, or
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service primarily for personal, family, or household purposes . . ..” Mich. Comp.
Laws § 445.902(1)(g) (emphasis added). As the Michigan Supreme Court has
recognized: “the MCPA applies only to purchases by consumers and does not
apply to purchases that are primarily for business purposes . . . ‘if an item is
purchased primarily for business or commercial rather than personal purposes, the
MCPA does not supply protection.’ ” Slobin v. Henry Ford Health Care, 666
N.W.2d 632, 634-35 (Mich. 2003) (quoting Zine v. Chrysler Corp., 600 N.W.2d
384 (Mich Ct. App. 1999)). The conduct giving rise to this action did not involve
consumer purchases; instead, they involved business or commercial transactions,
only. Thus the MCPA is inapplicable.
On the other hand, it appears that Defendants’ conduct does fall within the
proscriptions of a common law unfair competition claim. See In re MCI
Telecomm. Corp. Complaint, 612 N.W.2d 826, 836 n.8 (Mich. Ct. App. 2000)
(providing that “the common-law doctrine of unfair competition was ordinarily
limited to acts of fraud, bad-faith misrepresentation, misappropriation, or product
confusion”) (emphasis added); see also Induct-O-Matic Corp. v. Inductotherm
Corp., No. 1982 WL 52120, at *12 (E.D. Mich. 1982) (citing First Nat’l Bank &
Trust Co. of Kalamazoo v. First Nat’l Credit Bureau, Inc., 111 N.W.2d 880, 883
(Mich. 1961) and Hemmeter Cigar Co. v. Congress Cigar Co., 118 F.2d 64 (6th
Cir. 1941)) (recognizing that it was not necessary for the plaintiff to prove fraud or
24
deliberate deception by the defendant to establish common law unfair competition.
“The question in this unfair competition action is whether [the defendant’s]
conduct gives rise to a likelihood of confusion.”). Thus as long as Plaintiffs
demonstrate a likelihood of confusion, it appears that they are entitled to summary
judgment on their unfair competition claim.
As stated earlier, the test for assessing likelihood of confusion in the context
of a common law unfair competition claim is that test used for a Lanham Act
claim. The Sixth Circuit Court of Appeals has articulated eight factors for making
this assessment:
1. strength of the plaintiff’s mark;
2. relatedness of the goods;
3. similarity of the marks;
4. evidence of actual confusion;
5. marketing channels used;
6. likely degree of purchaser case;
7. the defendant’s intent in selecting the mark; and
8. likelihood of expansion of the product lines.
Frisch’s Rest., Inc. v. Elby’s Big Boy of Steubenville, Inc., 670 F.2d 642, 648 (6th
Cir. 1982). “These factors are not immutable, but merely indicate the need for
weighted evaluation of the pertinent facts in arriving at the legal conclusion of
25
confusion.” Frisch’s Rest., Inc. v. Shoney’s Inc., 759 F.2d 1261, 1264 (6th Cir.
1985). Several of the factors are not relevant in the present case. Of those factors
that are relevant, a sufficient number weigh in favor of finding a likelihood of
confusion.
Specifically, Plaintiffs and Bemas do not simply sell related goods. Instead,
as Defendants acknowledge, they sell the exact same goods and provide the exact
same services. Nedschroef Detroit and Bemas used the same marketing channels:
Rigole and LePage, in their dual capacities representing Nedschroef Detroit and
Bemas. Finally, contrary to Defendants’ assertion in response to Plaintiffs’
motion, there is evidence of actual confusion in the marketplace-- i.e., suppliers of
goods to Nedschroef Detroit and Bemas which were confused as to which entity
placed a particular order. (See Pls.’ Mot., Ex. 2 at 166-67, 177; Ex. 3 at 75-76, 98,
106-07; Exs. 19, 20, 22.) While Plaintiffs may not present evidence of confusion
by buyers, this is not required. Further, the test is “likelihood of confusion”, not
“actual confusion.” See Shell Oil Co. v. Commercial Petroleum, Inc., 928 F.2d
104, 108 (4th Cir. 1991) (quoting Soweco Inc. v. Shell Oil Co., 617 F.2d 1178,
1185-86 (5th Cir. 1980) (“Though Soweco lists ‘actual confusion’ as one factor
that courts must consider, it clearly states that ‘proof of actual confusion is
unnecessary; the likelihood of confusion is the determinative factor.’ ”) (emphasis
26
in original); see also Squirt Co. v. Seven-Up Co., 628 F.2d 1086, 1091 (8th Cir.
1980) (same).
For these reasons, the Court concludes that Plaintiffs are not entitled to
summary judgment with respect to their Lanham Act and MCPA claims (Counts I
and II). However, Plaintiffs are entitled to summary judgment with respect to their
common law unfair competition claim (Count IV).
E.
Tortious Interference with Business Relationships and/or
Expectancies of Business Relationships
Under Michigan law, a claim of tortious interference with a business
expectancy requires proof of “ ‘the existence of a valid business relationship or
expectancy, knowledge of the relationship or expectancy on the part of the
defendant, an intentional improper interference by the defendant inducing or
causing a termination of the relationship or expectancy, and resultant damage to
the plaintiff.’ ” Cedroni Ass’n, Inc. v. Tomblinson, Harburn Assoc., Architects &
Planners, Inc., 821 N.W.2d 1, 3 (Mich. 2012) (quoting Dalley v. Dykema Gossett,
PLLC, 788 N.W.2d 679, 696 (Mich. Ct. App. 2010) (additional citations omitted)).
Proof that the interference was “improper” can be shown by proving either “(1) the
intentional doing of an act wrongful per se, or (2) the intentional doing of a lawful
act with malice and unjustified in law for the purpose of invading [the] plaintiff[’s]
contractual rights or business relationship.” Advocacy Org. for Patients &
27
Providers v. Auto Club Ins. Ass’n, 670 N.W.2d 569, 580 (Mich. Ct. App. 2003)
(citation omitted).
Defendants do not challenge Plaintiffs’ evidence establishing the first three
elements of this claim. Defendants argue, however, that Plaintiffs cannot establish
the last element-- resulting damage-- because Bemas only provided parts for and/or
serviced Nedschroef machines if customers previously requested a quote for the
same part or service from Nedschroef Detroit and rejected the quote. The flaw in
Defendants’ argument is that before Rigole and LePage formed Bemas, there was
only one source in North America for the majority of the parts needed for
Nedschroef machines: Nedschroef Detroit. (Pls.’ Mot., Ex. 1 ¶ 7.) Thus although
Plaintiffs’ customers may have asked LePage and Rigole for an alternative source
to purchase those parts, if none had been offered, the customer would have had to
purchase the parts from Nedschroef Detroit at the price quoted or go without the
part. Presumably the latter option was not a realistic one where the customer relies
on the parts to operate their Nedschroef machine.
The Court therefore concludes that Plaintiffs present evidence to
demonstrate their entitlement to summary judgment on their tortious interference
claim (Count VII).
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F.
Unjust Enrichment
An unjust enrichment claim under Michigan law requires proof of the
following: “(1) receipt of a benefit by the defendant from the plaintiff and (2) an
inequity resulting to [the] plaintiff because of the retention of the benefit by the
defendant.” Erickson’s Flooring & Supply Co. v. Tembec, USA, LLC, 212 F.
App’x 558, 564 (6th Cir. 2007) (quoting Barber v. SMH (US), Inc., 509 N.W.2d
791, 796 (Mich. Ct. App. 1993)). As addressed earlier, Plaintiffs establish that, at
the very least, Defendants used Plaintiffs’ employees, computers, warehouse, and
equipment to start up and run Bemas. Defendants also engaged in business on
behalf of Bemas while employed by and receiving a wage from Nedschroef
Detroit. Through the use of Plaintiffs’ resources, Defendants were able to obtain
profits for Bemas. It would be inequitable to allow Defendants to retain the
financial benefit obtained through their use of Plaintiffs’ resources.
Accordingly, Plaintiffs are entitled to summary judgment with respect to
their unjust enrichment claim (Count VIII).
G.
Civil Conspiracy
Proof of a civil conspiracy in violation of Michigan law requires proof of
“ ‘(1) a concerted action (2) by a combination of two or more persons (3) to
accomplish an unlawful purpose (4) or a lawful purpose by unlawful means.’ ”
Petroleum Enhancer, LLC v. Woodward, 558 F. App’x 569, 580 (6th Cir. 2014)
(quoting Mays v. Three Rivers Rubber Corp., 352 N.W.2d 339, 341 (Mich. Ct.
App. 1984)). “Under Michigan law, ‘a claim for civil conspiracy may not exist in
the air; rather, it is necessary to prove a separate actionable tort.’ ” Id. (quoting
Early Detection Ctr., P.C. v. N.Y. Life Ins. Co., 403 N.W.2d 830, 836 (Mich. Ct.
App. 1986). During their depositions, Rigole and LePage testified that they
decided, with their wives, to create Bemas to compete directly with Nedschroef
Detroit. As established earlier, this conduct was accomplished through unlawful
means, such as LePage’s and Rigole’s breach of their fiduciary duties,
misappropriation of corporate opportunities, and conversion of Plaintiffs’ assets.
Plaintiffs therefore are entitled to summary judgment with respect to their
civil conspiracy claim (Count IX).
IV.
Relief
Plaintiffs seek a permanent injunction and damages, including treble
damages, attorney’s fees, and interest pursuant to Michigan’s conversion statute.
Plaintiffs also seek an evidentiary hearing to determine their economic damages
from January 1, 2014 through the date any injunction is entered.
A.
Permanent Injunction
A plaintiff prevailing on the merits may obtain a permanent injunction by
showing:
(1) that it has suffered an irreparable injury; (2) that remedies
available at law, such as monetary damages, are inadequate to
30
compensate for that injury; (3) that, considering the balance of
hardships between the plaintiff and defendant, a remedy in equity is
warranted; and (4) that the public interest would not be disserved by a
permanent injunction.
eBay, Inc. v. MercExchange, LLC, 547 U.S. 388, 391 (2006). The Court finds that
these factors have been satisfied.
With respect to the first and second factors, “a plaintiff’s harm is not
irreparable if it is fully compensable by money damages. However, an injury is
not fully compensable by money damages if the nature of the plaintiff’s loss would
make damages difficult to calculate.” Basicomputer Corp. v. Scott, 973 F.2d 507,
511 (6th Cir. 1992). Defendants’ conduct has caused a loss of goodwill and
competitive market position for Plaintiffs (see Pls.’ Mot., Ex. 1 ¶ 8)-- injuries
which courts have recognized cannot be fully compensable by monetary damages.
See, e.g., Basicomputer Corp., 973 F.2d at 512; FirstEnergy Solutions Corp. v.
Flerick, 521 F. App’x 521, 529 (6th Cir. 2013) (finding irreparable injury where
the defendant directly contacted the plaintiff’s customers because, if “[the
defendant] succeeds in luring [the plaintiff’s] potential customer base to [the
defendant’s new employer], [the plaintiff] may never be able to recover that lost
business[.]”).
The balance of hardships favors an injunction precluding Defendants from
continuing to unfairly compete against Plaintiffs. Defendants acknowledge that
Nedschroef machines make up only a small percentage of the fastener machines in
31
North America. (Pls.’ Mot., Ex. 2 at 22 (Rigole testifying that Nedschroef’s
market share in North America is “not a huge one” and guessing that it is 10, 15
percent); Ex. 3 at 20 (LePage testifying that Nedschroef’s share is “[a] couple
percent”). Thus an injunction precluding Defendants from providing replacement
parts for Nedschroef machines would leave substantial legitimate business for
Defendants to seek. Plaintiffs, on the other hand, would continue to suffer harm if
Defendants were permitted to continue with their unfair competition. Moreover,
courts have discounted the harm to a defendant by an injunction where the
defendant “ ‘knowingly and illegally placed itself in the position to be placed out
of business.’ ” Brake Parts, Inc. v. Lewis, 443 F. App’x 27, 33 (6th Cir. 2011)
(quoting Hickman v. Turitto, No. 1:06-cv-151, 2007 WL 1080090, at *3 (E.D.
Tenn. Apr. 9, 2007)); see also Lorillard Tobacco Co. v. Amouri’s Grand Foods,
Inc., 453 F.3d 377, 382 (6th Cir. 2006) (discounting harm that the contemplated
injunction would visit on the defendant, reasoning that it “is hardly a legally
cognizable one: It would be prohibited from selling counterfeit products, an illegal
act to begin with.”).
Finally, the public interest is served by an injunction. The public has an
interest in discouraging unfair competition. Brake Parts, 443 F. App’x at 33;
Hoover Transp. Services, Inc. v. Frye, 77 F. App’x 776, 785 (6th Cir. 2003).
32
Thus the Court is entering a permanent injunction precluding Defendants
from providing replacement parts or services for Nedschroef machines in North
America.
B.
Damages
Michigan courts have long recognized that an agent may forfeit his right to
compensation under a contract for services when the agent engages in misconduct
or grossly mismanages his principal’s affairs. See Toy ex rel Ketchum v. Lapeer
Farmers Mut. Fire Ins. Ass’n, 297 N.W. 230, 231-32 (Mich. 1941); Sweeney &
Moore, 294 N.W. at 712-13; Rippey v. Wilson, 273 N.W. 552, 556 (Mich. 1937).
As such, Plaintiffs are entitled to recover the wages they paid Rigole and LePage
from the time they started Bemas through the date they were terminated. Plaintiffs
present evidence to show that, during this time frame, Plaintiffs paid Rigole
$281,143 and LePage $286,749. (Pls.’ Mot., Ex. 26 at 4.) Defendants do not
dispute these calculations in response.
Michigan law also establishes that Plaintiffs are entitled to recover the
profits Bemas gained as a result of LePage’s and Rigole’s breach of their fiduciary
duties and usurpation of corporate opportunities. Central Cartage Co., 591
N.W.2d at 426 (quoting Production Finishing, 405 N.W.2d at 174) (“If an agent
acquires any pecuniary advantage to himself from third parties by means of his
fiduciary character, he is accountable to his employer for the profit made.”).
33
According to Plaintiffs’ evidence, Bemas’ net profits from 2011 through 2013
were $393,971. (Pls.’ Mot., Ex. 26 at 4.) Again, Defendants do not dispute these
calculations in response. Thus Plaintiffs are entitled to an award that includes this
amount, plus any net profits established from 2013 forward.4
Michigan’s conversion statute provides for an award of treble damages, plus
costs and reasonable attorney’s fees, to a plaintiff damaged by a defendant’s
conversion of property. Mich. Comp. Laws § 600.2919a(1). The statute states, in
part: “[t]he remedy provided by this section is in addition to any other right or
remedy the person may have at law or otherwise.” Id. § 600.2919a(2). As the
Court has found that Plaintiffs are entitled to summary judgment on their statutory
conversion claim, it also concludes that they are entitled to treble damages, costs,
and attorney’s fees.5
4
Plaintiffs request an evidentiary hearing to establish their additional damages
from the end of 2013 forward. The Court is hopeful that a determination of
Bemas’ net profits from the end of 2013 through the date of the Court’s permanent
injunction can be determined without the need for an evidentiary hearing.
Therefore, as set forth infra, the Court is ordering Defendants to comply with
Plaintiffs’ request for documentation relevant to this determination and is setting
forth a briefing schedule to address those net profits, as well as Plaintiffs’
reasonable attorney’s fees and costs incurred in this action. If Defendants do not
cooperate and provide Plaintiffs with the documents needed to make this
assessment, Plaintiffs may file an appropriate motion and sanctions may be
imposed.
5
As set forth in the preceding footnote, Plaintiffs shall file a brief in which they
present proof of their reasonable attorney’s fees and costs incurred in this action.
34
V.
Conclusion
For the reasons stated, the Court holds that Plaintiffs are entitled to summary
judgment with respect to all of their claims against Defendants, except their claims
alleging violations of the Lanham Act and Michigan Consumer Protection Act
(Counts I and II). The Court further holds that Plaintiffs are entitled to a
permanent injunction and damages representing (a) the wages Nedschroef Detroit
paid to LePage and Rigole while they were operating Bemas and (b) Bemas’ net
profits. Finally, the Court concludes that Plaintiffs are entitled to treble damages,
attorney’s fees, and costs.
Accordingly,
IT IS ORDERED that Plaintiffs’ motion for summary judgment is
GRANTED IN PART AND DENIED IN PART;
IT IS FURTHER ORDERED that within twenty-one (21) days of this
Opinion and Order, Defendants shall provide Plaintiffs with all documentation
relevant to determining Bemas’ net profits from the end of 2013 until the date of
this Opinion and Order. Plaintiffs may then file a motion, seeking damages for the
additional profits and the amount of any attorney’s fees they are seeking.
Defendants may respond to Plaintiffs’ motion within fourteen (14) days of its
filing. The Court then will decide the motion and enter a judgment that includes
the damages to which it finds Plaintiffs entitled.
s/ Linda V. Parker
LINDA V. PARKER
U.S. DISTRICT JUDGE
Dated: May 22, 2015
I hereby certify that a copy of the foregoing document was mailed to counsel of
record and/or pro se parties on this date, May 22, 2015, by electronic and/or U.S.
First Class mail.
s/ Richard Loury
Case Manager
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