United States District Court, E.D. Michigan, Southern Division
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.
OPINION AND ORDER DENYING PLAINTIFF'S MOTION FOR PARTIAL
SUMMARY JUDGMENT, (DOC. 68), GRANTING DEFENDANTS'
MOTION FOR SUMMARY JUDGMENT, (DOC. 70), AND
DENYING PLAINTIFF'S MOTIONS IN LIMINE REGARDING
APPLICABLE LAW, (DOC. 66), AND FOR DETERMINATION
OF DAMAGES AVAILABLE, (DOC. 67)
COHN, UNITED STATES DISTRICT JUDGE
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).
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
• Mars Retail Group
• Activision Publishing
• A&E Television
• Cartoon Network
• Depesche USA
• Dreamworks Animation
• KID Genius
• OBB II
• Polyblank Designs
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.
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.
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
Rosenbaum was president of the stationery division from 2009
to February 2014, when he left to start his own stationery
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
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.
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
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.
was executed on May 21, 2014.
record does not disclose when the sale closed, when the BS
was executed or when the stationery division began
Berger continued to sell Universal-licensed stationery
products pending assignment of the license.
September 1, 2014, the Lego license was assigned to My
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.
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.
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).
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.
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.
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
Count VI: Conversion
I, II and V are contract counts. Counts III, IV and VI are
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).
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).
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).
summary judgment motions before the Court are:
. My Imagination's Motion for Partial
Summary Judgment as to Count I (Breach of Contract), (Doc.