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Topshelf Management, Inc. v. Campbell-Ewald Co.

United States District Court, M.D. North Carolina

November 28, 2017

TOPSHELF MANAGEMENT, INC.; TOPSHELF CO., LLC; TOPSHELF COMPANY, LLC f/k/a SHOWTIME SPORTS AND MARKETING, LLC; and SHOWTIME MOTORSPORTS, INC., Plaintiffs,
v.
CAMPBELL-EWALD COMPANY, Defendant.

          MEMORANDUM OPINION AND ORDER

          Thomas D. Schroeder United States District Judge.

         This is an action by Plaintiffs Topshelf Company, LLC (“Topshelf”), successor in interest to Showtime Motorsports, Inc. (“Showtime”), and Topshelf Management, Inc. (“Topshelf Management”), all owned and operated by Brian Efird, [1] arising out of former business relationships with Defendant Campbell-Ewald Company (“CEC”). Before the court is CEC's motion for summary judgment as to Plaintiffs' third claim for relief, which charges that CEC engaged in unfair and deceptive trade practices through a series of allegedly misleading representations. (Doc. 25.) The motion has been fully briefed (Doc. 27; Doc. 30; Doc. 31) and is ready for decision. For the reasons set forth below, the motion will be granted and, because all other claims have previously been dismissed (Doc. 17), the action will be dismissed.

         I. BACKGROUND

         The facts, viewed in the light most favorable to Plaintiffs as the non-moving parties, establish the following:

         A. CEC's Contract with the Navy

         CEC is an advertising company that provided marketing services to the U.S. Navy from 2005 to 2013. (Doc. 26 ¶¶ 2, 4, 6, 15.) During that time, one of CEC's responsibilities was to run “field events, ” such as fairs and airshows, as part of the Navy's recruitment efforts. (Id. ¶ 4.) A component of these shows were Navy simulators, which CEC contracted to provide, that reproduced the effect of flying a Navy jet. (Id. ¶ 10.)

         From 2005 to 2009, CEC's dealings with the Navy were governed by an umbrella contract that authorized the Navy to spend hundreds of millions of dollars on marketing for up to five years; however, the agreement obligated the Navy to spend a minimum of $5 million and committed the Navy to no more than one year of service. (Id. ¶¶ 5-6.) After the first year, each additional year was at the Navy's option. (Id. ¶ 6.)

         On May 20, 2009, CEC entered into a new umbrella contract with the Navy, which contained the same essential terms. (Id. ¶ 8-9.) Like the earlier contract, this contract was eligible to run up to five years and in fact remained in effect until 2013, when the Navy ceased contracting with CEC. (Id. ¶¶ 8-9, 15.)

         Under these umbrella contracts, the Navy would issue a statement of work to CEC that requested specific services. (Id. ¶ 13.) CEC would then provide pricing information to the Navy, after which the Navy would issue a task order for the requested services. (Id.) Once it received the task order, CEC would issue a corresponding purchase order to a subcontractor. (Id.) Thus, under its contract with the Navy, CEC could issue a purchase order only if and when the Navy had first issued a task order.[2]

         B. Showtime's Subcontract with CEC

         CEC first met with Efird in 2008 to consider subcontracting its Navy simulator work to Showtime, another marketing company. (Id. ¶ 7; Doc. 30-2 at 14.) On September 8, 2008, Showtime signed CEC's Purchase Order Terms and Conditions form that would govern each purchase order. (Doc. 26-5 at 22.) This document set forth the boundaries of the relationship, including that no work performed by Showtime would be authorized or reimbursed prior to the issuance of a purchase order. (Id. at 2.) It also included a merger clause stating that the agreement is “binding and complete, ” “supersedes all other agreements and representations, ” and cautions that no “additions or modifications to this Agreement shall be effective unless they are in writing, signed by both parties, and make specific reference to this Agreement.” (Id.)

         On October 6, 2008, Efird received an email from John Schroeder, a CEC employee who served as the main point of contact with Efird, stating that CEC was in the process of “responding to a 10-year pricing request” from the Navy for business marketing services. (Doc. 30-3 at 9.)[3] The email also stated that CEC was planning to “select Showtime Motorsports as [its] primary partner for supplying the next generation of interactive mobile simulators.” (Id.)

         In November of 2008, CEC issued Showtime a purchase order for three months, subject to CEC's Purchase Order Terms and Conditions. (Doc. 26-4 at 5-6.) Pursuant to this purchase order, Showtime was able to supply two simulators (“Sims 1 and 2”), both manufactured by Doron Precision and refurbished by Showtime, in under five weeks for a Navy event in December 2008. (Doc. 30 at 2; Doc. 30-2 at 8- 9.) Apparently approving of Showtime's work, CEC chose to continue to subcontract simulator work to Showtime, and from March 11, 2009, to August 24, 2010, CEC issued multiple purchase orders to Showtime to supply and operate Sims 1 and 2 for various periods of time (ranging from a few months to a few days, but less than a year each). (Doc. 26-4 at 8-14.) During the course of these short-term purchase orders, Efird acknowledged that Showtime was not working under a long-term contract. (Doc. 27-3 at 26.)

         C. Showtime's Dissolution and CEC's Decision to Supply Sim 3

         In June 2010, as a result of the Navy's changes to its simulator program, CEC's Schroeder issued a request for proposal that called for a subcontractor to provide the Navy with three new simulators. (Doc. 27-3 at 32.) When the Navy modified its request to call for only one simulator (“Sim 3”), CEC similarly modified its request for proposal in July 2010. (Id. at 37.) In response, CEC received bids from multiple vendors, including Showtime; CEC also considered an internal proposal to supply Sim 3 itself, without a subcontractor. (Doc. 27-3 at 19, 38-44.) After reviewing these bids, CEC decided to subcontract the Sim 3 work to Showtime. (Doc. 27-1 at 49.)

         In late August 2010, Schroeder left CEC and was replaced by Yvonne Hughes. (Doc. 26 ¶ 23; Doc. 27-3 at 3) On September 3, the Navy issued CEC a task order for Sim 3. (Doc. 26-3 at 44-52.) In turn, on September 8, Hughes advised Efird that “Showtime has been awarded the additional Navy Simulator business” and that once she received the exact proposal Efird had sent to Schroeder, she could issue a purchase order to Showtime for the work on Sim 3. (Doc. 27-1 at 49.) However, on September 21, before CEC could issue a purchase order, Efird's attorney wrote CEC that Showtime was “winding up its operations” and “dissolving at the end of 2010.” (Doc. 27-2 at 30.) The letter also notified CEC that Efird would be associated with a new company, Topshelf Management, which would be available to enter into contracts with CEC. (Id.)

         Following this news, CEC reconsidered its decision to issue Showtime a purchase order for Sim 3 and decided to do the work itself. (Doc. 27-4 at 19-22.) In assessing its vendor options, CEC noted that Showtime was a “B” vendor with “financial response issues” and a “short cut mentality.” (Doc. 30-3 at 40.) CEC also observed that Topshelf Management may be going through an “ownership and management reorganization” that could impact its performance. (Doc. ...


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