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Marco International, LLC v. Como-Coffee, LLC

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

June 15, 2017

MARCO INTERNATIONAL, LLC, a Pennsylvania limited liability company, Plaintiff,
v.
COMO-COFFEE, LLC, a Delaware limited liability company, and COMOBAR, LLC, a Florida limited liability company, and CRAIG STEEN, individually, Defendants.

          OPINION AND ORDER DENYING DEFENDANTS' MOTION TO DISMISS OR, IN THE ALTERNATIVE, MOTION TO TRANSFER VENUE (ECF NO. 9)

          Paul D. Borman United States District Judge.

         Plaintiff Marco International, LLC (“Marco”) claims that Defendants Como-Coffee, LLC (“Como-Coffee”), Comobar, LLC (“Comobar”), and Craig Steen (“Steen”), (collectively Defendants), breached promises and agreements to make certain lump sum and guaranteed royalty payments to Marco in exchange for a license to use Marco's publicity rights, specifically the name and image of race car driver Marco Andretti. In lieu of filing an Answer, Defendants have filed a motion to dismiss this action based upon personal jurisdiction and improper venue. For the reasons that follow, the Court DENIES the motion.

         I. FACTUAL BACKGROUND

         On or about December 2, 2014, Defendant Steen contacted John Caponigro, the President of Sports Management Network, Inc. (“SMN”), a Troy, Michigan based company that represents sports and entertainment figures and assists them, among other services, in obtaining commercial sponsorships. Steen contacted Caponigro at his email address jc@sportsmanagementnetwork.com and introduced himself to Caponigro as “the guy that called you about Marco and our Clear2there home automation filming that we are scheduled with Marco on the 14th for. [sic] Marco is all ready for us on that.” (ECF No. 14, Pl.'s Resp. Ex. 2, April 14, 2017 Declaration of John Caponigro, Ex. A, Dec. 2, 2014 Email from Steen to Caponigro, PgID 264.) Marco refers to the Indy Race Car Driver, Marco Andretti, who is a client of SMN and who apparently was doing a sponsorship video for a company called Clear2there, a provider of “smart home” technology, that was a client of Steen's. See www.clear2there.com/smart-home.

         Steen's December 2, 2014 email to Caponigro confirms Marco's filming of a video for Clear2there and also introduces to Caponigro the concept of a possible sponsorship relationship with Marco Andretti for another client of Steen's, a “30 year old Italian coffee importer, out of Miami, ” i.e Comobar, with whom Steen's sister was associated through marriage. (Caponigro Decl. Ex. A, Dec. 2, 2014 Email, PgID 264.) Steen states to Caponigro that “[w]e would like to have Marco endorse and help us promote the coffee machine and coffee line.” (Id.) Steen informs Caponigro that his coffee importer client is a “fairly small player, but well established, ” holding “several patents on expresso machines.” (Id. at PgID 265.) Steen suggests the following arrangement with Caponigro's client, Marco Andretti:

Here is my proposal for Marco [sic] consideration. First, he will need to like the coffee and machines. We would send him a machine, asap and coffee to try. I know he is a coffee drinker, etc.
I would like to take advantage of the filming that we are doing with him on the 14th and have my crew film him drinking a cup of coffee, and standing beside a machine. We can incorporate it into the other filming for Clear2there and the home automation.
Add a $5K fee to him upfront for that endorsement, then we sign the revenue contribution going into 2015 with Word document attached.
See what you think. I will sign an Agency Agreement, if we can fit into this.
I also have the Just Blab it, that I want to send you the outline for, the other Company that I am owners in. But I will save that for another email. We are getting traction on it through UTA, United Talent Agency out of LA. We may sign an exclusive with them for Celebs and Athletes, they want us to consider it. I would hold out you and Marco on this, as an exception.
Really want to get [y]our feedback on the coffee, as we would shot [sic] those few shots next week at his house.

         (Caponigro Decl. Ex. A, Dec. 2, 2014 Email, PgID 265.) Caponigro responded that same day:

Thanks for sending this over. I am in Chicago this evening and tomorrow afternoon. Let's have a telephone discussion about this when I return. I will give you a call. Sounds very interesting. John C.

(Id. at PgID 264.) Steen responded later that same day:

Sounds good. I am heading to Billings this evening so Thursday afternoon or Friday are best some time. Good company [Comobar], Paolo's 87 year old father had not expanded it, rightfully so. Those stubborn Italians!
Talk to you than. [sic] I think the fact that everything is designed in Italy, Italian coffee, and endorsed by an Italian could be interesting marketing position.
Are you a coffee drinker? Great coffee, have to send you machine and coffee too, if we pursue together.
Craig L. Steen

(Id. at PgID 264.) On December 3, 2014, Steen sent the following email to Marco Andretti, informing him of his correspondence to Caponigro and the Comobar potential deal:

Marco, I need to have some items shipped to your house for the shooting. Can I get your address? Also John and I are talking tomorrow or Friday on the Italian coffee. He said sounded interesting. I think your Italian heritage and the fact it is just great coffee, could make you some money.

(Id. at PgID 251, Dec. 3, 2014 Email from Steen to Andretti.)

         Steen and Caponigro then had multiple email communications, with Steen sending a marked-up proposal to Caponigro in Michigan regarding Marco Andretti's sponsorship and royalty demands and representing that “Comobar is committed to move forward, ” with the agreement pending discussion of a number of “clarifications” that Steen attached to a January 2, 2015 email. (Caponigro Decl. Ex. A, Jan. 2, 2015 Email from Steen to Caponigro, PgID 252.) Steen states that: “The real endorsement from Marco is centered around the launch of the Comobar Marco Andretti endorsement and royalty program. . . . If you were available, I would even try to meet you in person on Thursday. I am done with my meetings in Memphis on Wednesday evening. I would be willing to come to you, if we could. . . . We are very appreciative of the opportunity and feel that these can be good revenue streams for all. Craig L. Steen.” (Id.)

         On January 5, 2015, Steen emails Caponigro to state that he will be arriving in Detroit on Thursday, January 8, 2015, that he has an appointment that afternoon, and would like to meet with Caponigro the morning of Friday, January 9, 2015. (Caponigro Decl. Ex. A, Jan. 5, 2015 Email from Steen to Caponigro, PgID 250.) Steen asks Caponigro to provide Steen with a draft contract for the Comobar deal “that [Steen] can review before Friday . . . to hopefully be in agreement and sign this Agreement on Friday if possible.” (Id. at PgID 249.) Steen further states that he “can provide the entity name that will be associated with this Agreement to you. It will most likely be Como-Coffee LLC.” (Id.) Caponigro sends a return email, indicating that he can get an agreement together, but asks Steen to send him Como-Coffee's state of incorporation and the name and title of the person who will be signing the agreement. (Id.) Steen responds with the Arizona address of Como-Coffee, “Incorp. Delaware, ” and indicates that “Craig L. Steen” will be signing as “member partner.” (Id. at PgID 248.) Steen indicates that “we [suggesting Steen/Como-Coffee and Comobar] set this up on 12/30/14, in anticipation of doing this with you.” (Id.) (alteration added).

         The meeting between Steen and Caponigro does take place on January 9, 2015, in Troy, Michigan. The parties ultimately sign the Sponsorship/Royalty Agreement later in January, with Steen sending scanned signatures to Caponigro in Troy and Caponigro executing and returning to Steen on January 26, 2015. (Pl.'s Resp. Ex. 1; Caponigro Decl. Ex. A, Jan. 26, 2015 Email Steen to Caponigro acknowledging receipt of signed agreement PgID 230-234.) The fully executed Agreement between Como-Coffee LLC and Marco is sent by email to Caponigro in Michigan by Steen on January 27, 2015. (Caponigro Decl. Ex. A, Jan. 27, 2015 Email from Steen to Caponigro, PgID 230-232.) These emails were followed by several emails between Steen and Caponigro regarding performance under the January 26, 2015 Agreement, which appears to have to run into several snags, none of which is particularly relevant to the Court's resolution of the issue of personal jurisdiction and venue.

         The January 26, 2015 Sponsorship/Royalty Agreement (“the Agreement”) defines Como-Coffee as a Delaware Corporation with offices located at 3452 E. Jaeger Circle, Mesa, Arizona, defines Marco International, LLC as a Pennsylvania limited liability company with offices located at 471 Rose Inn Ave., Nazareth, Pennsylvania, and further defines Como-Coffee as maintaining “a representation and distribution agreement with Comobar, LLC; an importer and distributor of coffee and both industrial and consumer coffee machines.” (ECF No. 9, Defs.' Mot. Ex. A, January 26, 2015 Agreement 1, PgID 88.) The Agreement generally provides that Marco Andretti agrees to allow Como-Coffee to utilize his personal name and likeness in conjunction with the “branding and sale of the products and services of COMO-COFFEE and Comobar.” As demonstrated by the photographs depicting the proposed Comobar branding of potential advertising/marketing materials. (Defs.' Mot. Ex. A, Agreement at 1, PgID 88; Caponigro Decl. Ex. A, PgID 197-199, 224-229, .) The term of the Agreement commenced effective January 1, 2015 and was to continue for a period of three (3) years through December 31, 2017, unless terminated sooner under the terms of the Agreement. (Defs.' Mot. Ex. A, Agreement 2, PgID 89.) The Agreement defined three (3) separate “contract years, ” Year One running from January 1, 2015 through December 31, 2015, Year Two from January 1, 2016 through December 31, 2016, and Year Three from January 1, 2017 through December 31, 2017. (Id.)

         The Agreement further expressly provides that Como-Coffee agreed to supply both Plaintiff and SMN, at SMN's address in Troy, Michigan to the attention of John P. Caponigro, a copy of any and all marketing, advertising, promotional and press materials to be used in connection with the Agreement at least ten (10) business days before release to the public. (Id. ¶¶ 6 and 17, PgID 89, 94-95.) The Agreement authorizes either Plaintiff or SMN to disapprove of the proposed materials and to give notice to Como-Coffee of the same without unreasonable delay. (Id. ¶ 6.)

         Under the Agreement, Plaintiff was to receive a royalty payment during each Contract Year based upon the sales revenue of “Comobar or other Comobar-affiliated brand unit sales, ” per a formula set forth in the Agreement. (Id. ¶ 7.) The Agreement provides for a minimum royalty payment for any one of the three given Contract Years of $45, 000. (Id.) (“the Minimum Annual Guarantee”). The Agreement provides that the Minimum Annual Guarantee for each Contract Year shall be paid by Como-Coffee not later than January 30 following each Contract Year. (Id.) On January 11, 2016, Plaintiff invoiced Como-Coffee for the 2015 Minimum Annual Guarantee due pursuant to the Agreement to be paid by January 30, 2016, with a check payable to Marco International, LLC c/o Sports Management Network, Inc., 1301 W. Long Lake Rd., Suite 250, Troy, Michigan 48098, Attn: Sev Tringali, the Controller at SMN. The Invoice was sent with a cover letter from Ms. Tringali on SMN letter head. (Pl.'s Resp. Ex. 4, January 11, 2016 Correspondence from Tringali to Steen with attached Invoice.)

         In addition to granting Como-Coffee the right to use his image and likeness in connection with Como-Coffee and Comobar products and services, Marco also agreed that Como-Coffee would be a personal sponsor for Marco Andretti for individual Formula E (electric car) races. Plaintiff further agreed that Comobar's logo would be placed on Marco Andretti's driver suit and that Como-Coffee could use the image of Marco Andretti wearing the driver suit bearing the Como-Coffee/Comobar logo along with the image of his Formula E car, in the promotion and sale of its products. (Defs.' Mot. Ex. A, Agreement ¶ 7(b).) For this personal sponsorship, Como-Coffee agreed to pay Marco an additional $12, 000 prior to each Formula E race. (Id.) The Agreement provided that Como-Coffee would participate as a personal sponsor of Marco Andretti in the 2015 Formula E race in Miami, Florida or, at the 2015 Formula E event in Long Beach, California in the event that Marco Andretti did not participate in the Formula E Miami race. (Id.) The “$12, 000 per race” compensation due under the Agreement for the Formula E sponsorship races (¶ 7(b)) is separate and distinct from the Royalty Payments due to Marco based upon sales of Comobar or other Comobar-affiliated brand products and the $45, 000/year “Minimum Annual Guarantee” payment for each of the three Contract Years for such royalty amounts . (¶ 7(a)).

         The Agreement also grants Marco access to the books and records of Como-Coffee, and requires Como-Coffee to submit to Marco, within thirty (30) days following the close of each Contract Year calendar quarter, an itemized statement of sales and revenue during the preceding Contract Year quarter, and to submit to Marco, within thirty (30) days of the close of each Contract Year, payment to Marco for any revenue earned under the royalty provisions of the Agreement during the preceding Contract Year. (Id. ¶ 8.)

         The Agreement provides for termination without penalty by either party on the occurrence of certain specified events, one of which is the failure to obtain prior approval from Marco or ...


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