Michaels v. Shoreline Tours et al
Filing
54
ORDER - Shoreline's motion to dismiss 5 is DENIED. Michaels's motion for leave to file an amended complaint 32 is GRANTED. The Clerk of the Court is directed to change the name "Shoreline Tours" to "Shoreline Charters & Tours, Inc." on the docket of this case. (Written Opinion). Signed by Judge Patrick J. Schiltz on 03/21/12. (bjs)cc: Willie Donwell Modified on 3/21/2012 (jam).
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
BRET MICHAELS,
Case No. 11-CV-2678 (PJS/JSM)
Plaintiff,
v.
ORDER
SHORELINE TOURS, a Canada corporation;
TIM TOWLE, an individual; and WILLIE
DONWELL, an individual,
Defendants.
Alan H. Maclin and Matthew R. Brodin, BRIGGS & MORGAN, P.A.; Brian A. Procel,
MILLER BARONDESS LLP, for plaintiff Bret Michaels.
Nicole M. Siemens and Bryan A. Welp, LINDQUIST & VENNUM PLLP, for defendants
Shoreline Tours and Tim Towle.
This case involves an employment agreement between musician Bret Michaels and
promoter Willie Donwell. On August 23, 2010, Michaels and Donwell executed a contract under
which Donwell agreed to pay Michaels $750,000 and Michaels agreed to perform two concerts
on a “Super Cruise” promoted by Donwell. Donwell agreed to pay Michaels the full $750,000
even if the cruise were canceled and Michaels did not have to perform. The cruise was
eventually canceled, but Michaels received only $250,000 of the $750,000 that Donwell owed
him. Michaels has sued Donwell, seeking to recover the additional $500,000, as well as other
damages.
The problem for Michaels is that Donwell appears to have no money, so a judgment
against Donwell is unlikely to do Michaels any good. For that reason, Michaels has also sued
Shoreline Charters & Tours, Inc. and its principal, Tim Towle (collectively “Shoreline”).1
Shoreline is a travel agency that was involved in planning the “Super Cruise.” Michaels has
pleaded a number of creative theories for why Shoreline — which was not a party to the contract
and which made no promises to Michaels — should nonetheless be held liable to him for the
$500,000 that he is owed by Donwell (as well as for other damages). For example, Michaels
alleges that Donwell was secretly acting as Shoreline’s agent when he signed the contract — and,
alternatively, that before Donwell signed the contract, he secretly formed a joint venture with
Shoreline and signed the contract as a representative of that joint venture.
This matter is before the Court on Shoreline’s motion to dismiss [Docket No. 5] and
Michaels’s motion for leave to file an amended complaint [Docket No. 32]. The Court held a
hearing on these motions at William Mitchell College of Law on the evening of March 14, 2012.2
Having examined Michaels’s proposed amended complaint carefully, the Court regards most of
Michaels’s claims against Shoreline as tenuous. But, at this stage of the litigation, Michaels has
pleaded enough facts in the proposed amended complaint to plausibly assert that Shoreline and
Donwell had some kind of legal relationship — whether it was an agency relationship with
Shoreline as the undisclosed principal or an undisclosed joint venture (or both) — before
Donwell and Michaels executed the employment agreement. Michaels has also pleaded enough
facts to plausibly assert that Shoreline may be held liable to Michaels for fraud or breach of
1
Michaels erroneously named “Shoreline Tours” as a defendant in the original complaint.
The Court orders the Clerk to change the defendant’s name from “Shoreline Tours” to “Shoreline
Charters & Tours, Inc.” on the docket of this case.
2
The Court thanks Alan H. Maclin and Nicole M. Siemens for graciously agreeing to
argue their motions at an evening hearing before an audience of several hundred law students.
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contract because of its agency relationship or joint venture with Donwell.3 As the Court
explained at the hearing, several facts pleaded in the proposed amended complaint support
Michaels’s theory, including:
•
At or shortly after the time that the employment agreement was signed,
Michaels and Donwell executed a contract addendum that named
Shoreline as the “host travel agency.”
•
Donwell breached the employment agreement on the day that it was signed
by failing to pay Michaels a $250,000 installment that was due on signing,
suggesting that Donwell was in no financial position to make the financial
commitments that he had just made to Michaels in the contract.
•
Shortly after Donwell signed the employment agreement — a contract in
which he promised to promote the “Super Cruise” — Donwell largely
dropped out of sight, leaving Shoreline to act as the promoter of the cruise.
•
Approximately one month after the employment agreement was signed,
Shoreline used its own funds to pay Michaels the $250,000 that Donwell
was supposed to have paid on signing.
•
Just a few weeks after the employment agreement was signed, Shoreline
guaranteed $2.7 million to Carnival Cruise Lines for the “Super Cruise.”
3
At the hearing, Shoreline conceded that if Donwell acted as Shoreline’s agent in
negotiating and signing the employment agreement, and if Donwell defrauded Michaels, then
Shoreline could be held liable for that fraud. Shoreline insisted, however, that it could not be
held liable for breach of contract even if Donwell was acting as its agent in signing the contract
with Michaels.
This is a curious proposition, and Shoreline has not cited — and the Court has not found
— any authority supporting the proposition. To the contrary, the Minnesota Supreme Court has
implied that the undisclosed principal would be liable for breach of contract in these
circumstances. See generally A. Gay Jenson Farms Co. v. Cargill, Inc., 309 N.W.2d 285, 293
(Minn. 1981) (“If the principal sends an agent to buy goods for him and on his account, it is not
unreasonable that he should see that they are paid for. Although the seller may consider the
agent to be the principal, the actual principal knows better.”) (internal quotations omitted).
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•
At the same time that it promised to pay $2.7 million to Carnival,
Shoreline sought an insurance policy to cover its guarantee. In applying
for that coverage, Shoreline represented to the insurer that it was
essentially responsible for promoting the “Super Cruise” — something
that Donwell had promised to do in the employment agreement.
It is very difficult to believe that Donwell would insert Shoreline into the contract — and
that Shoreline would make such huge financial commitments and such sweeping representations
— unless Shoreline had some kind of agreement in place with Donwell before Donwell executed
the employment agreement with Michaels. For that reason, the Court will allow the fraud and
breach-of-contract claims to go forward.
Michaels has asserted other claims against Shoreline. Shoreline’s motion to dismiss
those additional claims presents a close call. But the parties have to take discovery on the two
most important claims, and that discovery will encompass the full scope of the relationship
between Donwell and Shoreline — and the relationship between Donwell and Shoreline, on the
one hand, and Michaels, on the other. Given that there is little to be gained by dismissing the
additional claims at this time, and given that the Court would prefer to consider those claims in
light of a fully developed factual record, the Court will deny Shoreline’s motion to dismiss in its
entirety. Shoreline can, of course, move for summary judgment following the close of discovery,
if such a motion is warranted.
ORDER
Based on the foregoing, and on all of the files, records, and proceedings herein, IT IS
HEREBY ORDERED THAT:
1.
Shoreline’s motion to dismiss [Docket No. 5] is DENIED.
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2.
Michaels’s motion for leave to file an amended complaint [Docket No. 32] is
GRANTED.
3.
The Clerk of the Court is directed to change the name “Shoreline Tours” to
“Shoreline Charters & Tours, Inc.” on the docket of this case.
Dated: March 21, 2012
s/Patrick J. Schiltz
Patrick J. Schiltz
United States District Judge
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