Global Fitness Holdings, LLC v. Federal Recovery Acceptance, Inc.
Global Fitness Holdings, LLC v. Federal Recovery Acceptance, Inc.
Opinion of the Court
MEMORANDUM DECISION AND ORDER GRANTING [106] DEFENDANTS’ MOTION FOR PARTIAL SUMMARY JUDGMENT ON PLAINTIFF’S PROMISSORY ES-TOPPEL CLAIM
This case is a dispute between a former owner of physical fitness clubs and one of its billing services providers regarding the parties’ obligations to each other at the termination of their contractual relationship. Plaintiff Global Fitness Holdings, LLC (“Global”) filed this suit in October 2012 against two related entities (collectively “Paramount”), Federal Recovery Acceptance, Inc. (“FRAI”) and Federal Recovery Services, Inc. (“FRSI”). Global brought claims for tortious interference,
In the Global-L.A. Fitness Asset Purchase Agreement (“APA”), Global was to transfer customer data to L.A. Fitness, but Global claims Federal Recovery wrongfully withheld the data pending Global’s payment of termination fees to Federal Recovery.
Paramount filed several motions for partial summary judgment. This order GRANTS Paramount’s motion
TABLE OF CONTENTS
BACKGROUND.1232
STATEMENT OF UNDISPUTED MATERIAL FACTS..'.1233
I.Prerequisite: A Promissory Estoppel Claim Is Only Available in the Absence of A Contract Governing the Parties’ Rights and Obligations.1234
II.Element 1: A Promise Reasonably Expected to Induce Reliance.1235
III. Element 2: Reasonable Reliance Inducing Action or Forbearance on the Part of the Promisee or A Third Person.1235
IV. Element 3: Detriment to the Promisee or Third Person.1237
SUMMARY JUDGMENT STANDARD.1237
APPLICABLE LAW..'.1237
ANALYSIS.1238
I. Legal Standard for A Promissory Estoppel Claim.1238
II. Arguments by Global and Paramount.,..1238
III. Summary Judgment Is Granted to Paramount on Global’s Claim for Promissory Estoppel. to CO ZD
A. The Contracts Governed the Parties’ Rights and Obligations ... to CO to
.1241 B. The Evidence Does Not Show that Paramount Made A Clear and Definite Promise to Transfer the Billing Information..
.1242 C. The Evidence Does Not Show that Paramount Made Any Promise With an Awareness of All the Material Facts.
.1244 D. Global Could Not Have Reasonably Relied on Any Promise from Paramount to Transfer the Member Account Data Prior to the End of the 46-Day Termination Period.
.1246 E. The Evidence Does Not Show that Global Detrimentally Relied o n Any Promise by Paramount to Transfer the Member Account Data.
ORDER. .1249
At all relevant times prior to October 2012, Global owned and operated multiple fitness centers in multiple states.
In 2008, Global and FRAI executed eight location-specific contracts (the “2008 Contracts”);
On or around September 10, 2012, Global publicly announced that it had entered into the APA with L.A. Fitness, whereby L.A. Fitness would purchase substantially all of the assets of Global.
In its promissory estoppel claim, Global contends that Paramount promised to transfer the Member Account Data, including the Billing Information, whenever Global requested the data, and that Paramount then refused to transfer the Billing Information when it was requested on October 3, 2012.
STATEMENT OF UNDISPUTED MATERIAL FACTS
The below collection of undisputed material facts is distilled from the above listed filings. Paramount’s Motion on Promissory Estoppel provided a statement of facts
I.Prerequisite: A Promissory Estoppel Claim Is Only Available in the Absence of A Contract Governing the Parties’ Rights and Obligations.
1. Global and FRAI executed multiple contracts with each other regarding Paramount’s management of certain Member Account Data.
2. Each of the Contracts between Global and FRAI contains the following termination provision: “Contractor or Company may terminate this Agreement at any time for any reason upon 45 day prior written notice.”
3. Each of the Contracts also states: “This Agreement may not be amended or modified at any time and no provision may be waived, except by an instrument in writing executed by the COMPANY and CONTRACTOR, or either of them in case of a waiver.”
4. On September 11, 2012, Keith Traw-ick, on behalf of Global, emailed Paramount stating:
Pursuant to the terms of our agreement with you, dated September 11, 2009, 45 day notice is hereby given for the termination of the Agreement. As we discussed, the clubs have been sold to L.A. Fitness and at this time, we are unsure of the exact closing date.41
5. In its Amended Complaint, Global alleges that, “Paramount and FRSI knew that Global Fitness needed Paramount to transfer the Member Account Data, including the Billing Data, to L.A. Fitness in order to close on the APA prior to the forty-five day termination period in the Agreement.”
6. Global further alleges: “Global Fitness did detrimentally rely on Paramount and/or FRSI’s misrepresentation that it would transfer the Member Account Data, including the Billing Data, within the time-frame required by L.A. Fitness and prior to forty-five day termination period in the Agreement.”
II. Element 1: A Promise Reasonably Expected to Induce Reliance.
8. Historically, Defendants always provided Global Fitness with any requested Member Account Data; CC and ACH information was not included.
9. Defendants continued to provide cuts of the Member Account Data after Global Fitness provided notice of termination of the contractual relationship between the parties; CC and ACH information was not included
10. On October 10, 2012, Paramount represented that it had. “commenced the process to transfer the requested member and contract data as requested, without going ‘black’. Absent delays, the process as to the data may be complete from our end this Friday, October 12.”
III. Element 2: Reasonable Reliance Inducing Action or Forbearance on the Part of the Promisee or A Third Person.
11. Global and FRAI executed multiple contracts with each other regarding Paramount’s management of certain Member Account Data.
12. Each of the Contracts between Global and FRAI contains the following termination provision; “Contractor or Company may terminate this Agreement at any time for any reason upon 45 day prior written notice.”
13. Each of the Contracts also states: “This Agreement may not be amended or modified at any time and no provision may be waived, except by an instrument in writing executed by the COMPANY and CONTRACTOR, or either of them in case of a waiver.”
14. In its Amended Complaint, Global alleges that, “Paramount and FRSI knew that Global Fitness needed Paramount to transfer the Member Account Data, including the Billing Data, to L.A. Fitness in order to close on the APA prior to the forty-five day termination period in the Agreement.”
15. Global further alleges: “Global Fitness did detrimentally rely on Paramount and/or FRSI’s misrepresentation that it would transfer the Member Account Data, including the Billing Data, within the time-frame required by L.A. Fitness and prior to forty-five day termination period in the Agreement.”
16. When Global made a demand on October 3, 2012 for the return of its Mem
17. On October 10, 2012, Paramount represented that it had “commenced the process to transfer the requested member and contract data as requested, without going ‘black’. Absent delays, the process as to the data may be complete from our end this Friday, October 12.”
18. Between the announcement of the APA and October 11, 2012, Global Fitness took the following actions, required of Global by the APA, in an effort to close on the transaction on or before October 15, 2012:
a. Terminated at least eleven subleases;
b. Negotiated the assignment and/or sublease of 36 leases from Global Fitness to L.A. Fitness, many of which required amendment to the underlying leases to meet the requirements of L.A. Fitness, which in several instances resulted in tense relationships between Global Fitness and the lessors and/or required that Global Fitness and/or its principals make significant concessions to the underlying lessors, such as providing guaranties of the leases that would continue even after the assignment or sublease to L.A. Fitness;
c. Negotiated complex recognition agreements and subordination, non-disturbance and attornement agreements with the lessors’ lenders;
d. Terminated a mass membership contract with a nationwide health insurance carrier, which generated sizable monthly revenues to Global Fitness before its termination;
e. Made significant modifications to its business practices, such as the discontinuation of paid-in-full memberships, which were a substantial source of income for Global Fitness, and the termination of tanning services to all Global Fitness members because L.A. Fitness does not provide tanning;
f. Notified its employees and independent contractors of the impending transaction which, if it failed to close, would have created confusion and uncertainty for these parties and potentially damaged their relationship with Global Fitness;
g. Made arrangements to pay certain obligations to primary lenders, vendors and equipment lessors before they would otherwise be due, sometimes at an increased cost, in order to ensure that all assets being sold to L.A. Fitness could be transferred free and clear of all liens and encumbrances; and
*1237 h. Filed letter ruling requests with state revenue departments in Ohio, Kentucky and Tennessee, as well as tax clearance statements, in order to provide L.A. Fitness with assurance regarding the tax treatment of the transaction in those states.55
IV. Element 3: Detriment to the Promisee or Third Person.
19. On September 5, 2012, Global and L.A. Fitness executed a certain Asset Purchase Agreement (“APA”).
20. In the APA Global and L.A. Fitness agreed to an “Outside Date” of October 31, 2012 for closing the transaction contemplated by the APA. However, they did not agree to any specific “Closing Date” in the APA or at any time in writing prior to October 16, 2012.
21. Thus, under the APA, the outside closing date for Global and L.A. Fitness was October 31, 2012.
SUMMARY JUDGMENT STANDARD
Summary judgment is proper “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.”
APPLICABLE LAW
Global originally filed its case in the United States District Court for the Eastern District of Kentucky.
ANALYSIS
I. Legal Standard for A Promissory Estoppel Claim
Under Utah law, “[a] party claiming promissory estoppel must establish the following: (1) a promise reasonably expected to induce reliance; (2) reasonable reliance inducing action or forbearance on the part of the promisee or a third person; and (3) detriment to the promisee or third person.”
that the defendants were aware of all the material facts; that in such awareness they made the promise when they knew that the plaintiff was acting in reliance on it; that the latter, observing reasonable care and prudence, acted in reliance on the promise and got into a position where it suffered a loss.70
As a prerequisite to bringing a promissory estoppel claim, the plaintiff must establish that the parties do not have a formal contract controlling their rights and obligations.
II. Arguments by Global and Paramount.
In its Amended Complaint, Global alleges that Paramount, through its actions and past cooperation in transferring the Member Account Data, effectively made a promise to Global that Paramount would transfer the Member Account Data, including the Billing Information, whenever Global demanded it and prior to the end of the parties’ contractual relationship.
Paramount’s Motion on Promissory Es-toppel argues that Global’s promissory es-toppel claim should be dismissed because the parties’ Contracts govern the parties’ rights and obligations with each other, in-
III. Summary Judgment Is Granted to Paramount on Global’s Claim for Promissory Estoppel.
There are no genuine disputes as to any material fact that would preclude summary judgment against Global on Global’s promissory estoppel claim, and, for the reasons discussed more fully below, Paramount is entitled to judgment as a matter of law on five independent grounds: (A) the Contracts governed the parties’ rights and obligations, eliminating a claim for promissory estoppel; (B) even if a claim for promissory estoppel could be made, Global cannot show that Paramount made a clear and definite promise to transfer the Member Account Data that could be reasonably expected to induce reliance; (C) Global cannot show that Paramount made a promise with an awareness of all the material facts; (D) Global could not have relied on a promise of pre-termination transfer from Paramount because of the 45-day termination period provided in the Contracts; and (E) Global cannot show that it detrimentally relied on any promise from Paramount. Accordingly, Paramount’s Motion on Promissory Estoppel is GRANTED.
A. The Contracts Governed the Parties’ Rights and Obligations.
Global’s claim of fails because a promissory estoppel claim is clearly prohibited where a contract exists.
As a prerequisite to bringing a promissory estoppel claim, the plaintiff must establish that the parties do not have a formal contract controlling their rights and obligations.
Global’s position that the Contracts do not govern the parties’ rights and obligations regarding the transfer of the Member Account Data is incorrect. It is undisputed that Global and FRAI executed multiple contracts with each other regarding Paramount’s management of certain Member Account Data.
Paramount had a contractual right to possess and manage the Member Account Data, including the Billing Information, and to service the membership accounts until the end of the Contracts.
Each of the Contracts contains the following termination provision: “Contractor or Company may terminate this Agreement at any time for any reason upon 45 day prior written notice.”
At the May 11, 2015 hearing, Global cited the American Towers
Accordingly, Global’s promissory estop-pel claim cannot stand where the management of Member Account Data is governed by a contract.
B. The Evidence Does Not Show that Paramount Made A Clear and Definite Promise to Transfer the Billing Information.
Beyond the first reason for granting summary judgment, that promissory es-toppel is clearly prohibited where the parties’ relationship is governed by a contract, Global’s claim also fails to meet the first element of promissory estoppel: that Paramount made a “promise reasonably expected to induce reliance.”
To support a claim for promissory estoppel, the alleged promise must be “clear and definite.”
It is undisputed that Paramount had historically always provided Global Fitness with any requested Member Account Data.
Global argues that through Paramount’s course of dealings with Global in historically providing Member Account Data, Paramount effectively promised Global that it would transfer the full Member Account Data, including Billing Information, anytime Global requested it and prior to the end of the 45-day termination period. At best, this course of dealing shows that Paramount regularly transferred some data to Global, which would be relevant if Paramount refused to transfer any data at all. However, that did not happen. Paramount regularly transferred Member Account Data, and it never provided any Billing Information. That never changed until the termination of the parties’ contractual relationship.
Paramount’s past practice, custom, or performance does not constitute a clear and definite promise expected to induce reliance that is necessary to support a claim for promissory estoppel. Rather, Global must point to some affirmative statement made by Paramount, which Global has not done.
The closest Global can come to showing some promise by Paramount is an October 10, 2012 email in which Paramount represented that it had “com-, menced the process to transfer the requested member and contract data as requested, without going ‘black’. Absent delays, the process as to the data may be complete from our end this Friday, October 12.”
General promises of cooperation are not a specific promise of a specific act on a specific timetable, on which another party could rely. Global unilaterally terminated the parties’ contractual relationship, and Paramount did not make such specific promises. Because Global cannot show a clear and definite promise made by Paramount, it cannot meet the first element of a promissory estoppel claim. Accordingly, independent of the other grounds, based on the first element, Paramount’s Motion on Promissory Estoppel is granted.
C. The Evidence Does Not Show that Paramount Made Any Promise With an Awareness of All the Material Facts.
Beyond the other reasons for granting summary judgment, Global’s promissory estoppel claim must also fail
In order to succeed on a claim for promissory estoppel, Global must show that Paramount made a promise to Global with an awareness of all the material facts.
The material facts of which Paramount would have needed to be aware of in order to make a promise on which Global could have relied are: (1) that L.A. Fitness and Global executed the APA, on September 5, 2012; (2) that the APA provided for a potential change in the purchase price formula if the APA closed after October 15, 2012;
However, the undisputed evidence is that Paramount was not aware of any of these material facts. Specifically, despite Global negotiating the APA for multiple months and signing the APA on September 5, 2012, Global did not notify Paramount in writing of its pending asset sale to L.A. Fitness or its desire to terminate its Contracts with Paramount until September 11, 2012.
The evidence also shows that Global did not request the Billing Information from Paramount until October 3, 2012.
Indeed, the evidence shows that Global did not tell Paramount of the October 15, 2012 variable purchase price trigger date
This undisputed sequence of events shows that Paramount was not aware of all of the material facts at any time sufficient to enable it to make a promise to transfer the Member Account Data upon which Global could have relied. Although Global made general statements that time was important and that delays or other problems with the sale would have financial repercussions, Global did not make Paramount aware of all the material facts, state a clear deadline, identify the potential purchase price reduction, etc., and therefore, Paramount could not have had the requisite awareness to make a reliable promise.
Accordingly, independent of the above grounds for granting summary judgment, based on the lack of Paramount’s awareness of all the material facts, Global cannot succeed on its claim for promissory estop-pel.
D. Global Could Not Have Reasonably Relied on Any Promise from Paramount to Transfer the Member Account Data Prior to the End of the 45-Day Termination Period.
Beyond the other grounds for granting summary judgment, Global’s promissory estoppel claim must also fail independently because of a lack of evidence of reasonable reliance.
To succeed on a claim for promissory estoppel, a plaintiff must not only show that it relied on a promise from the defendant, it must also show that its reliance was reasonable,
In Wardley, the parties entered into a franchising agreement, which allowed the defendant to transfer or assign its rights under the contract.
when the alleged promises made are contrary to the terms of the contract,*1245 reliance on such promises would be unreasonable. Under the contract before us, Meredith could transfer or assign its rights and obligations. Any rebanee on statements that Meredith would never sell, or that its obligations would continue after it assigned the obligations under the contract, would therefore have been unreasonable. We accordingly affirm the district court’s dismissal of Wardley’s promissory estoppel claims.115 Similarly, even if Global could show that
it rebed on some promise by Paramount to transfer the Bbling Information, the undisputed evidence establishes that Global’s reliance would not have been reasonable because the promise by Paramount would have been contrary to the parties’ Contracts.
In its opposition to Paramount’s Motion, Global does not dispute that a party cannot reasonably rely on a promise that is contrary to the parties’ contract.
The Contracts contain no provisions giving Global a right to demand transfer on a certain timetable and no obligation on Paramount to abide by any timetable proposed by Global. More importantly than their silence on the issue of transfer, the Contracts necessarily give Paramount the right and obligation to manage the Member Account Data, including the Billing Information, through the 45-day termination period. Because the Contracts cannot be amended or modified “except by instrument in writing executed by [Global] and [Paramount],”
Global attempts to rebut this conclusion by arguing that when it made a demand for the Member Account Data, including the Billing Information, on October 3, 2012, Paramount’s internal correspondence from that day to October 11, 2012, shows
Accordingly, independent of the other reasons for granting summary judgment, because Global’s reliance on any alleged promise made by Paramount could not be reasonable, Global cannot succeed on its claim for promissory estoppel, and summary judgment is granted in favor of Paramount.
E. The Evidence Does Not Show that Global Detrimentally Relied on Any Promise by Paramount to Transfer the Member Account Data.
Another basis for granting summary judgment is that none of Global’s actions were taken in reliance on any alleged promise by Paramount; rather, Global only acted in performance of its pre-existing obligations.
To “prove detrimental reliance on the defendant’s representation, the plaintiff must have done some act which it otherwise would not have done.”
To the contrary, the evidence shows that Global’s actions were related to the APA with L.A. Fitness, which was negotiated and signed in complete .disregard of the Contracts with Paramount (including Paramount’s contractual right to hold that Member Account Data for 45 days following notice of termination). Specifically, the evidence shows that Global negotiated and executed the APA before even discussing termination with Paramount.
Furthermore, Global cannot show detrimental reliance on any promise by Paramount with regards to the transfer the Member Account Data because Global’s own failures prevented Global from being able to transfer the Member Account Data to L.A. Fitness in the time required under the APA for an October 15, 2012 closing. The APA required Global to transfer the Member Account Data, including the Billing Information, to LA Fitness no later than 14 days prior to closing on the APA.
L.A. Fitness could have waived any nonperformance by Global, but this does not mean that L.A. Fitness would have waived this nonperformance, especially if L.A. Fitness stood to save roughly $10 million in the purchase. In order to ensure a closing prior to October 15, 2012 with the higher purchase price, Global would have had to remove any opportunity for L.A. Fitness to delay closing past the October 15 deadline. Global’s performance would have had to be perfect to prevent such a delay, and, through no fault of Paramount, it was not. Global requested total transfer of the Billing Information on October 3, 2012 even though performance under the APA required its transfer by October 1, 2012 for an October 15, 2012 closing. Global did not perform under the L.A. Fitness timetable, and it cannot now avoid the consequences of that failure by blaming Paramount.
In its Opposition, Global argues that it detrimentally relied on a promise by Paramount to transfer the Member Account Data because, between the announcement of the APA (i.e. September 10, 2012)
a. Terminated at least eleven subleases;
b. Negotiated the assignment and/or sublease of 36 leases from Global Fitness to L.A. Fitness, many of which required amendment to the underlying leases to meet the requirements of L.A. Fitness, which in several instances resulted in tense relationships between Global Fitness and the lessors and/or required that Global Fitness and/or its principals make significant concessions to the*1248 underlying lessors, such as providing guaranties of the leases that would continue even after the assignment or sublease to L.A. Fitness;
c. Negotiated complex recognition agreements and subordination, non-disturbance and attornement agreements with the lessors’ lenders;
d. Terminated a mass membership contract with a nationwide health insurance carrier, which generated sizable monthly revenues to Global Fitness before its termination;
e. Made significant modifications to its business practices, such as the discontinuation of paid-in-full memberships, which were a substantial source of income for Global Fitness, and the termination of tanning services to all Global Fitness members because L.A. Fitness does not provide tanning;
f. Notified its employees and independent contractors of the impending transaction which, if it failed to close, would have created confusion and uncertainty for these parties and potentially damaged their relationship with Global Fitness;
g. Made arrangements to pay certain obligations to primary lenders, vendors and equipment lessors before they would otherwise be due, sometimes at an increased cost, in order to ensure that all assets being sold to L.A. Fitness could be transferred free and clear of all liens and encumbrances; and
h.Filed letter ruling requests with state revenue departments in Ohio, Kentucky and Tennessee, as well as tax clearance statements, in order to provide L.A. Fitness with assurance regarding the tax treatment of the transaction in those states.128
However, to show detrimental reliance, Global must do more than show that Paramount made a promise and that Global took some action; Global must show that it would not have undertaken the actions it did but for the promise by Paramount.
In an attempt to overcome this shortcoming, Global argues that while the APA did require it to undertake the activities listed above, Global would not have undertaken those activities as soon as it did but for Paramount’s promise.
The problem with Global’s argument is two-fold. First, Global has acknowledged that it had a tremendous incentive to close on the APA by October 15, 2012, and Global has not pointed to any evidence to suggest that Paramount’s promise made Global work towards an October 15, 2012 closing. Second, the evidence shows that Global was in fact working on the tasks listed above before Paramount was aware of the October 15 deadline and before Global ever requested the Billing Information. Indeed, Paramount was not made aware of the October 15 closing date or any possible financial repercussions to Global for closing the APA after October 15 until, at the soonest, October 9, 2012.
Accordingly, independent of the other reasons for granting summary judgment, because Global cannot show that it detrimentally relied on any promise by Paramount, Global cannot succeed on its claim for promissory estoppel, and summary judgment is GRANTED in favor of Paramount.
ORDER
IT IS HEREBY ORDERED that Defendants’ Motion for Partial Summary Judgment on Global’s Promissory Estop-pel Claim
. Global Fitness Holding, LLC’s Amended Complaint (“Amended Complaint”) ¶¶ 38-45, docket no. 71, filed March 19, 2014.
. Id. ¶¶ 46-52.
. Id. ¶¶ 53-60.
. Id. ¶¶ 61-66.
. Id. ¶¶ 67-73.
. See generally id.
. Amended Complaint ¶¶ 64-65.
. Id. ¶¶ 61-63, 65-66.
. Defendants' Motion for Partial Summary Judgment on Global’s Promissory Estoppel Claim, docket no. 106, filed Aug. 4, 2014; Defendants’ Motion for Partial Summary Judgment RE Plaintiff's Conversion Claim and Supporting Memorandum, docket no. 108, filed Aug. 4, 2014; Defendants’ Motion for Partial Summary Judgment RE: Global’s Breach of Contract and Breach of the Implied
. Global Fitness, LLC's Motion for Voluntary Dismissal of its Bréach of Contract Claim Against Federal Recovery Acceptance, Inc. as it Relates to the Transfer of Data, docket no. 132, filed Sept. 4, 2014.
. Defendants’ Motion for Partial Summary Judgment on Global's Promissory Estoppel Claim (“Paramount’s Motion on Promissory Estoppel”), docket no. 106, filed Aug. 4, 2014.
. Amended Complaint ¶ 7.
. Defendants' Amended Answer to Plaintiff's Amended Complaint and Counterclaim ("Counterclaim”) ¶ 19, docket no. 85, filed April 22, 2014.
. Amended Complaint ¶ 9.
. Counterclaim ¶ 19; see also Contracts (specifically those dated 2008), attached as Exhibit A to Paramount’s Motion on Promissory Estoppel, docket no. 106-2, filed Aug. 4, 2014.
. Amended Complaint ¶ 13; Counterclaim ¶ 23; see also Contracts (specifically those . dated 2009).
. Counterclaim ¶ 24; see also Contracts (specifically those dated 2011).
. Amended Complaint ¶¶ 14-16.
. Id. ¶8.
. See APA at Section 1 under definition of "Gross Purchase Price, portions attached as Exhibit A to Reply Memorandum in Support of Defendants' Motion for Partial Summary Judgment on Global’s Promissory Estoppel Claim & Exhibit Index with Exhibit A Filed Under Seal ("Paramount’s Reply on Promissory Estoppel”), docket no. 169, filed under seal on Sept. 22, 2014; redacted version, docket no. 173, filed Sep. 23, 2014; portions also attached as Exhibit D to Paramount’s Motion on Causation in Tortious Interference, docket no. 121-5, filed Aug. 4, 2014; also attached as Exhibit W to Global’s Opposition on Causation in Tortious Interference, docket no. 151-2, filed Sep. 5, 2014. See also September 3, 2012 email from Coby Devary to Kathy Poison ("Sept. 3, 2012 Devary-Polson E-mail”), attached as Exhibit G to Paramount’s Motion on Promissory Estoppel, docket no. 106-8, filed Aug. 4, 2014; Affidavit of Coby DeVary ("DeVary Affidavit”), attached as Exhibit J to Declaration of David L. Mortensen in Support of Global Fitness Holdings, LLC’s Memorandum in Opposition to Federal Recovery Services Inc.’s Motion for Partial Summary Judgment RE: Global Fitness’s Promissory Estoppel Claim ("Global’s Exhibits on Promissory Estoppel”), docket no. 137-10, filed September 4, 2014.
. Amended Complaint ¶ 23; See Sept. 11, 2012 email from K. Trawick to S. Nelson, et al. ("Sept. 11, 2012 Trawick Email”), attached as Exhibit C to Paramount's Motion on Promissory Estoppel, docket no. 106-4, filed Aug. 4, 2014, also attached as Exhibit L to Global’s Exhibits on Promissory Estoppel, docket no. 137-12, filed Sep. 4, 2014.
. Amended Complaint ¶ 28; Oct. 3, 2012 email from Keith Trawick to Sid Nelson, et al. ("Oct. 3, 2012 Trawick-Nelson E-mail”), attached as Exhibit O to Global’s Exhibits on Promissory Estoppel, docket no. 137-16, filed Sept. 4, 2014.
. See 30(b)(6) Deposition of L.A. Fitness (Deponent Kathy Poison) dated April 22, 2014 ("Poison Depo.”) at 189:9-190:14, attached as Exhibit D to Paramount’s Motion on Promissory Estoppel, docket no. 106-5, filed under seal in docket no. 117-2, filed Aug. 4, 2014 (acknowledging that Paramount transferred the Member Account Data on October 11, 2012); Deposition of Keith Trawick dated March 18, 2014 ("Trawick Depo.”) at 262:19-23, attached as Exhibit E to Paramount’s Motion on Promissory Estoppel, docket no. 106-6, filed Aug. 4, 2014, other excerpts also attached as Exhibit I to Global’s Exhibits on Promissory Estoppel, docket no. 137-9, filed Sep. 4, 2014 (same).
. Amended Complaint ¶¶ 46-52, at Count II.
. Id.
. Global Fitness Holdings, LLC's Memorandum in Opposition to Defendants’ Motion for Partial Summary Judgment on Global’s Promissory Estoppel Claim ("Global’s Opposition on Promissory Estoppel”), docket no. 136, filed Sep. 4, 2014.
. Reply Memorandum in Support of Defendants’ Motion for Partial Summary Judgment on Global's Promissory Estoppel Claim ("Paramount’s Reply on Promissory Estoppel”), docket no. 169, filed under seal on Sep. 22, 2014; redacted version, docket no. 173, filed Sep. 23, 2014.
. See Minute Entry, docket no. 251, filed May 11, 2015; Transcript 5/11/15, docket no. 254, filed May 20, 2015.
. Paramount's Motion on Promissory Estop-pel at 4-10.
. Global’s Opposition on Promissory Estop-pel at 8-11.
. Id. at 11-14.
. See Global’s Exhibits on Promissory Estop-pel.
. Paramount's Reply on Promissory Estop-pel at iii-xi.
. Id. at xi-xvi.
. E-mail from Judge Nuffer's Chambers to counsel (May 8, 2015), lodged as docket no. 273 on Aug. 31, 2015.
. Transcript 5/11/15 3:23-16:7, docket no. 254, filed May 20, 2015.
. Id.
. See Contracts.
. Id. at section entitled "Term”; see also Deposition of Global dated May 1, 2014 (deponent: Coby DeVary) ("DeVary Depo.”) at 12:24-13:24, excerpts attached as Exhibit B to Paramount’s Motion on Promissory Estop-pel, docket no. 106-3, filed under seal in docket no. 117-1, filed on Aug. 4, 2014, other relevant portions attached as Exhibit G to Paramount’s Motion on Promissory Estoppel, docket no. 106-8, filed under seal in docket no. 117-4, filed Aug. 4, 2014; other portions attached as Exhibit K to Global's Exhibits on Promissory Estoppel, docket no. 137-11, filed Sep. 4, 2014.
. Contracts at section entitled "Amendment”.
. See Sept. 11, 2012 email from K. Trawick to S. Nelson, et al. ("Sept. 11, 2012 Trawick Email”), attached as Exhibit C to Paramount's Motion on Promissory Estoppel, docket no. 106-4, filed Aug. 4, 2014, also attached as Exhibit L to Global’s Exhibits on Promissory Estoppel, docket no. 137-12, filed Sep. 4, 2014.
. Amended Complaint ¶ 48.
. Id. ¶ 50.
. See Polson Depo. at 189:9-190:14 ■ (acknowledging that Paramount transferred the Member Account Data on October 11, 2012); Trawick Depo. at 262:19-23.
. Counterclaim ¶¶ 46-47, at 25-26; see also Declaration of Todd Rasmussen ("Rasmussen Decl.”) ¶ 5, attached as Exhibit H to Global’s Exhibits on Promissory Estoppel, docket no. 137-8, filed Sep. 4, 2014; Trawick Depo. at 101:6-25.
. Id.
. Oct. 10, 2012 E-mail from Thomas Klc to Darby Turner (“Oct. 10, 2012 Klc E-mail”), attached as Exhibit Z to Global’s Exhibits on Promissory Estoppel, docket no. 137-26, filed Sep. 4, 2014 ("On that basis, unless you request otherwise, my client has commenced the process to transfer the requested member and contract data as requested....").
. See Contracts.
. Id. at section entitled "Term”; see also DeVary Depo. at 12:24-13:24.
. Id. at section entitled "Amendment”.
. Amended Complaint ¶ 48.
. Id. ¶ 50.
. See October 3, 2012 E-mail from Glen Bendixen to Ren Rice and Kenneth Melby ("Oct. 3, 2012 Bendixen-Rice E-mail”), attached as Exhibit W to Global’s Exhibits on Promissory Estoppel, docket no. 137-24, filed Sep. 4, 2014 (“We can’t give them the detailed account information until we have the reserve we need.... [Tjhey’re trying to pull a fast once[sic] so we have no reserve....”). See also October 3, 2012 E-mail from Glen Bendixen to Sid Nelson et al. ("Oct. 3, 2012 Bendixen-Nelson E-mail”), attached as Exhibit X to Global’s Exhibits on Promissory Estoppel, docket no. 137-24, filed Sep. 4, 2014; October 3, 2012 E-mail chain from Todd Rasmussen to Glen Bendixen (“Oct. 3, 2012 Rasmussen E-mails”), attached as Exhibit Y to Global’s Exhibits on Promissory Estoppel, docket no. 137-25, filed Sep. 4, 2014 ("[t]he billing info is the only card we have left”).
. See Oct. 10, 2012 Klc E-mail.
. DeVary Affidavit ¶ 7.
. See APA at 1. See also DeVary Depo. at 129:4-5.
. See APA at Section 10.1; see also Deposition of Royce Pulliam dated March 21, 2014 at 94:25-96:7, relevant portions attached as Exhibit H to Paramount’s Motion on Promissory Estoppel, docket no. 106-9, filed under seal in docket no. 117-5, filed Aug. 4, 2014; DeVary Depo. at 71:13-72:7, 184:15-17, 283:10-285:3; September 3, 2012 Email from Coby DeVary to Kathy Poison, attached as Exhibit I to Paramount's Motion on Promissory Estoppel, docket no. 106-10, filed Aug. 4, 2014 ("The outside closing date would be 10/31/2012”).
. See APA at Section 10.1.
. Fed.R.Civ.P. 56(a).
. Universal Money Ctrs., Inc. v. Am. Tel. & Tel. Co., 22 F.3d 1527, 1529 (10th Cir. 1994) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)) (internal quotation marks omitted).
. Universal, 22 F.3d at 1529.
. Id. (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)).
. Id. (quoting Applied Genetics Int’l, Inc. v. First Affiliated Sec., Inc., 912 F.2d 1238, 1241 (10th Cir. 1990) (internal quotation marks omitted)) (both emphases in original).
. Id. (quoting Anderson, 477 U.S. at 252, 106 S.Ct. 2505).
. Complaint, docket no. 1, filed Oct. 10, 2012.
. 28 U.S.C. § 1332(a); see Complaint 113 ("This Court has jurisdiction over this action pursuant to 28 U.S.C. § 1332(a) as it involves citizens of different states and the amount in controversy exceeds' the sum or value of $75,000, exclusive of interest and costs.”).
. Memorandum Opinion & Order, docket no. 34, filed Mar. 20, 2013.
. See Paramount’s Motion on Promissory Es-toppel at 10, Global’s Opposition on Promissory Estoppel at 8 (listing elements of promissory estoppel in Utah).
. Cottonwood Imp. Dist. v. Qwest Corp., 296 P.3d 754, 755 (UT Ct.App. 2013).
. Triax Pacific, Inc. v. Am. Ins. Co., No. 94-4091, 1995 WL 643156, *7 (10th Cir. Nov. 2, 1995) (quoting Tolboe Constr. Co. v. Staker Paving & Constr. Co., 682 P.2d 843, 845 (Utah 1984)).
. Youngblood v. Auto-Owners Ins. Co., 2007 UT 28, ¶ 18, 158 P.3d 1088 (quoting Mile High Industries v. Cohen, 222 F.3d 845, 859 (10th Cir. 2000)) (“stating that promissory es-toppel exists where no formal contract exists”).
. Amended Complaint ¶¶ 48-50, at Count II.
. Id. ¶ 50.
. Id. ¶ 51.
. Paramount’s Motion on Promissory Estop-pel at 14-15.
. See Global’s Opposition on Promissory Es-toppel at 14-15.
. Id. (quoting Needham v. Fannie Mae, 854 F.Supp.2d 1145, 1152 (D.Utah 2012)).
. Id. at 15.
. Id.
. Youngblood v. Auto-Owners Ins. Co., 2007 UT 28, ¶ 18, 158 P.3d 1088 (quoting Mile High Industries v. Cohen, 222 F.3d 845, 859 (10th Cir. 2000)) (stating that promissory es-toppel exists where no formal contract exists).
. Id.
. Tiberi v. Cigna Corp., 89 F.3d 1423, 1432 (10th Cir. 1996).
. Id. (internal citations omitted) (emphasis added).
. David Early Group, Inc. v. BFS Retail & Commercial Operations, LLC, No. 2:06-CV-277-DAK, 2008 WL 222674 at *10 (D.Utah Jan. 25, 2008) ("To the extent that BFS alleges it has been harmed by the Early Parties’ conduct, its legal remedy is based on the contracts themselves and it cannot pursue equitable claims for unjust enrichment or promissory estoppel. Accordingly, the court grants the Early Parties’ motion for summary judgment on these claims.”); see also Needham v. Fannie Mae, 854 F.Supp.2d 1145, 1152 (D.Utah 2012) (J. Nuffer) (dismissing claims for promissory estoppel and unjust enrichment "because the parties had an enforceable contract.”).
. See Contracts.
. See Memorandum Decision and Order Granting In Part and Denying In Part [111] Defendants’ Motion For Partial Summary Judgment on Plaintiffs Breach Of Contract And Breach of the Implied Covenant Claims, Part 1(B), docket no. 274, filed Aug. 31, 2015.
. Contracts at section entitled "Term”; see also DeVary Depo. at 12:24-13:24.
. Id. at section entitled "Amendment”.
. American Towers Owners Association Inc. v. CCI Mechanical, Inc., 930 P.2d 1182, 1193 (Utah 1996).
. Id. at 1192-93.
. Id. at 1184.
. Cottonwood Imp. Dist. v. Qwest Corp., 296 P.3d 754, 755 (UT Ct.App. 2013).
. Youngblood v. Auto-Owners Ins. Co., 2007 UT 28, ¶ 19, 158 P.3d 1088.
. Amended Complaint ¶ 50.
. Counterclaim ¶¶ 46-47, at 25-26; see also Rasmussen Decl. ¶ 5; Trawick Depo. at 101:6-25.
. Counterclaim ¶¶ 46-47, at 25-26.
. Id.
. Id.
.Oct. 10, 2012 Klc E-mail ("On that basis, unless you request otherwise, my client has commenced the process to transfer the requested member and contract data as requested. ...”).
. Triax Pacific, Inc. v. Am. Ins. Co., No. 94-4091, 1995 WL 643156, *7 (10th Cir. Nov. 2, 1995) (quoting Tolboe Constr. Co. v. Stoker Paving & Constr. Co., 682 P.2d 843, 845 (Utah 1984)).
. See Sept. 3, 2012 Devary-Polson E-mail; see also DeVary Affidavit; APA definition of Gross Purchase Price at page 10.
. See Sept. 11, 2012 Trawick Email.
. See id.
. See id.
. Id.
. Amended Complaint ¶ 28; see also Oct. 3, 2012 Trawick-Nelson E-mail.
. See id.
. See DeVary Depo. at 45:10-16.
.See Oct. 10, 2012 E-mail from Darby Turner to Thomas Klc, et al. ("Oct. 10, 2012 Turner E-mail”), attached as Exhibit Z to Global’s Exhibits on Promissory Estoppel, docket no. 137-26, filed September 4, 2014; see also Transcript 5/11/2015 61:9-13, docket no. 254, filed May 20, 2015 (Question by the Court: “When did you make Paramount aware of the critical reduction in the purchase price if closing didn’t occur by October 15th?” Answer by Mr. Stinnett: "Your Hon- or, I believe the reference is October 9th.”).
. Cottonwood Imp. Dist. v. Qwest Corp., 296 P.3d 754, 755 (UT Ct.App. 2013) (recognizing reasonable reliance as one of the core elements of promissory estoppel).
. Wardley Corp. v. Meredith Coip., 93 Fed.Appx. 183, 186 (10th Cir. 2004).
. Id. at 183-84.
. Id.
. Id. at 185-86.
. Id.
. Global’s Opposition on Promissory Estop-pel at 18.
. See Transcript 5/11/2015 52:18-53:6, docket no. 254, filed May 20, 2015 (Question by the Court: "I held in a hearing on April 27th that the 45 day termination period entitled Paramount to continue to possess and sue the data under the contract for the 45 days. So in light of the lack of a contractual provision for delivery of data, and the contractual provision permitting Paramount to have possession and use of that data for the 45 days, how would your reliance on delivery of these cuts and Klc’s — I guess maybe you’re saying you relied on Klc’s letter that was under threat of preliminary injunction — how would your reliance on those have been reasonable knowing that there's a 45 day period where Paramount is entitled to perform under the contract?” Answer by Mr. Stinnett: "Your Honor, obviously if you stick to your holding, I don’t have a basis for reasonable reliance.”).
. Global’s Opposition on Promissory Estop-pel at 18; see id. n. 56 ("Because Global Fitness and FRSI do not have an express contract, Global Fitness’s claim for promissory estoppel against FRSI is not impacted by this argument.”).
. Contracts at section entitled "Amendment”.
. See Oct. 3, 2012 Bendixen-Rice E-mail ("We can’t give them the detailed account information until we have the reserve we need.... [T]hey’re trying to pull a fast once[sic] so we have no reserve....”). See also Oct. 3, 2012 Bendixen-Nelson E-mail; Oct. 3, 2012 Rasmussen E-mails (“[t]he billing info is the only card we have left”).
. Cottonwood, 2013 UT App. 24 at ¶ 3, 296 P.3d 754; see also Andreason v. Aetna Cas. & Sur. Co., 848 P.2d 171, 175-76 (Utah Ct.App. 1993) ("They must have done some act which they otherwise would not have done. Only acts done in detrimental reliance are compen-sable.”).
. Amended Complaint ¶ 50.
. Id. ¶ 23; See Sept. 11, 2012 Trawick Email.
.Amended Complaint ¶ 50.
. See also APA § 7.11(d).
. Amended Complaint ¶ 28; see also Oct. 3, 2012 Trawick-Nelson E-mail.
.See Amended Complaint ¶ 8.
. DeVary Affidavit ¶ 7.
. Cottonwood, 2013 UT App. 24 ¶ 3, 296 P.3d 754; see also Andreason, 848 P.2d at 175-76 ("They must have done some act which they otherwise would not have done. Only acts done in detrimental reliance are compensable.”).
. APA at §§ 4, 7, 8; see also Paramount’s Motion for Partial Summary RE: Global’s Tortious Interference Claim, docket no. 121, filed Aug. 4, 2014 for a detailed explanation on Global's obligations under the APA.
. Global’s Opposition on Promissory Estop-pel at 19-22.
.See DeVary Depo. at 45:10-16; see also Oct. 10, 2012 Turner E-mail; see also Transcript 5/11/2015 61:9-13, docket no. 254, filed May 20, 2015 (Question by the Court: "When did you make Paramount aware of the critical reduction in the purchase price if closing didn’t occur by October 15th?” Answer by Mr. Stinnett: "Your Honor, I believe the reference is October 9th.”).
. See Amended Complaint ¶ 8; Global’s Opposition on Promissory Estoppel at 13-14.
. Docket no. 106, filed Aug. 4, 2014.
Reference
- Full Case Name
- GLOBAL FITNESS HOLDINGS, LLC v. FEDERAL RECOVERY ACCEPTANCE, INC. and Federal Recovery Services, Inc.
- Cited By
- 2 cases
- Status
- Published