Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

MY Imagination, LLC v. M.Z. Berger & Co., Inc.

United States District Court, E.D. Michigan, Southern Division

January 30, 2017

MY IMAGINATION, LLC, a Michigan limited liability company, Plaintiff,
M.Z. BERGER & CO., INC., a foreign corporation; M.Z. BERGER & CO., INC., d/b/a MZB INK; and MZB IMAGINATION, LLC, a New York limited liability company, Defendants.

         HON. AVERN COHN




         A. The Case

         This is a breach of contract case. The contract is in the form of a written agreement relating to an asset purchase of the stationery division of Defendants M.Z. Berger & Co., Inc. and MZB Imagination LLC (collectively, MZ Berger).

         In the Asset Purchase Agreement (APA), Plaintiff MY Imagination LLC (My Imagination) acquired inventory and the right to licenses for stationery logos used by MZ Berger. The licensors for the logos were:

• Lego
• Nickelodeon
• Universal
• Mars Retail Group
• Activision Publishing
• A&E Television
• Cartoon Network
• Depesche USA
• Dreamworks Animation
• KID Genius
• Polyblank Designs
• Sega
• TBox

         Assignment of licenses was subject to approval by the licensors. Additionally, My Imagination acquired the goodwill of the stationery division as reflected in a Bill of Sale (BS) attached. The APA did not include a non-compete provision.

         My Imagination says MZ Berger breached provisions of the APA relating to assignment of licenses by not cooperating in obtaining the agreement of licensors to the assignment. My Imagination also says MZ Berger breached a covenant implied from the sale of goodwill of the stationery division not to solicit the division's customers.

         B. The Parties

         MZ Berger is an “accessory company” and wholesaler of watches, clocks, toys and other consumer goods. MZ Berger also had a stationery division which sold back-to-school items including notepads and erasers bearing logos of popular interest.[1]

         Barry Rosenbaum was president of the stationery division from 2009 to February 2014, when he left to start his own stationery business.

         In February, Rosenbaum approached Lego about the prospect of becoming its stationery licensee instead of MZ Berger. Lego recommended that Rosenbaum partner with Sun Yu, one of its toy licensees.

         On May 1, 2014, Rosenbaum and Yu filed articles of organization to establish My Imagination. The same day, they executed an operating agreement in which they were the named parties.

         The operating agreement provided that Rosenbaum and Yu would each have a 50% interest in the company. (Doc. 73-1 at 7, 28). A section titled “Capital Contributions/Proposed Purchase and Operation of Company Assets/Restriction on Distributions” states:

Purchase and Operation of Assets. The Company entered into an Asset Purchase Agreement with MZ Berger, LLC, as Seller, for the purchase of certain assets (“Assets”) relating to the marketing and sale of Legos licensed products, the terms of which have been unanimously approved by Yu and Rosenbaum. . . .

(Id. at 13-14). Rosenbaum was president.

         C. The Deal

         The APA was executed on May 21, 2014.

         The record does not disclose when the sale closed, when the BS was executed or when the stationery division began operations.

         MZ Berger continued to sell Universal-licensed stationery products pending assignment of the license.

         On September 1, 2014, the Lego license was assigned to My Imagination.

         On September 12, 2014, MZ Berger sent letters to the licensors named above about assignment of licenses. Universal discussed assignment with My Imagination. On September 22, 2014, Universal declined to assign the license.

         In December 2014, My Imagination closed down. In early 2015, the Lego license was assigned to an entity associated with Yu. At the same time, MZ Berger decided to leave the stationery business and told Universal of this. The Universal license that MZ Berger retained was assigned to Innovative Designs, which was a competitor.

         D. Procedural History

         The case was filed on August 26, 2014, (Doc. 1). The initial complaint contained a count for rescission and sought $4.2 million in losses said to have been incurred as a consequence of MZ Berger's breach of the APA, (Doc. 1 at 20).

         The next day, My Imagination moved for a temporary restraining order (TRO) requiring MZ Berger to send letters to licensors regarding assignment of licenses under the APA. On September 12, 2014, the Court entered a TRO to this effect.

         On April 23, 2015, an amended complaint was filed, (Doc. 42), attached to which was a copy of the APA and a draft of the letters to licensors proposed by MZ Berger.

         The counts of the amended complaint are:

Count I: Breach of Contract,
Count II: Breach of the Implied Covenant Not to Compete,
Count III: Fraudulent Inducement,
Count IV: Tortious Interference with Business Expectancy,
Count V: Breach of Implied Covenant of Good Faith and Fair Dealing, and
Count VI: Conversion

         Counts I, II and V are contract counts. Counts III, IV and VI are tort counts.

The amended complaint does not mention rescission. As to injury, it states:
The delays and Defendants' conduct relative to the Licenses, Licensor Letters, and usurpation of Plaintiffs business opportunities directly forced Plaintiff to cease doing business and begin winding down its corporate affairs in early 2015.

(Doc. 42 at 13).

         In a Statement of Claims requested by the Court, My Imagination estimated it had incurred $3.5 million in losses as a consequence of MZ Berger's breach of the APA, (Doc. 45 at 4), plus $1.2 million in litigation costs, (Doc. 89 at 6).

         II. MOTIONS

         A. Summary Judgment

         1. Legal Standard

         Summary judgment will be granted if the moving party demonstrates 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). There is no genuine issue of material fact when “the record taken as a whole could not lead a rational trier of fact to find for the non-moving party.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The Court must decide “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.” In re Dollar Corp., 25 F.3d 1320, 1323 (6th Cir. 1994) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986)). In doing so, the Court “must view the evidence in the light most favorable to the non-moving party.” Emp'rs Ins. of Wausau v. Petrol. Specialties, Inc., 69 F.3d 98, 101 (6th Cir. 1995).

         2. Particular Motions

         The summary judgment motions before the Court are:

. My Imagination's Motion for Partial Summary Judgment as to Count I (Breach of Contract), (Doc. ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.