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Superlative Group, Inc. v. Wiho, LLC

United States District Court, D. Kansas

April 9, 2014

THE SUPERLATIVE GROUP, INC., Plaintiff,
v.
WIHO, L.L.C., Defendant.

MEMORANDUM AND ORDER

JOHN W. LUNGSTRUM, District Judge.

This diversity action comes before the Court on defendant's motion for summary judgment (Doc. # 27). For the reasons set forth below, the Court denies the motion.

I. Background[1]

Plaintiff The Superlative Group, Inc. entered into a contract with Sedgwick County, Kansas, by which plaintiff agreed to find lessees for suites in the County's new arena in exchange for commissions from the County. Defendant WIHO, L.L.C., who does business as a professional hockey team named the Wichita Thunder, became a tenant of the arena and began to play its games there. Between July 2008 and October 2009, plaintiff leased nine of the 17 available suites. As an express condition of the suite leases, lessees agreed to purchase at least 12 regular season suite tickets for Thunder games.

Plaintiff alleges that defendant promised and agreed that it would pay plaintiff a 20-percent commission on Thunder season tickets sold to lessees as a condition of a suite lease. Plaintiff asserts claims under Kansas law for breach of contract, promissory estoppel, and quantum meruit. On the first and third claims, plaintiff seeks damages in the amount of the alleged commissions owed by defendant to plaintiff for season ticket sales to suite lessees, in the alleged amount of $96, 278.91. On its alternative promissory estoppel claim, plaintiff seeks to recover damages to compensate for the loss of commissions that it alleges it would have earned from the County if it had leased all the suites without the season ticket requirement, in the total amount of $210, 000.00.

II. Summary Judgment Standards

Summary judgment is appropriate if the moving party demonstrates that there is "no genuine dispute as to any material fact" and that it is "entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(a). In applying this standard, the court views the evidence and all reasonable inferences therefrom in the light most favorable to the nonmoving party. Burke v. Utah Transit Auth. & Local 382, 462 F.3d 1253, 1258 (10th Cir. 2006). An issue of fact is "genuine" if "the evidence allows a reasonable jury to resolve the issue either way." Haynes v. Level 3 Communications, LLC, 456 F.3d 1215, 1219 (10th Cir. 2006). A fact is "material" when "it is essential to the proper disposition of the claim." Id.

III. Breach of Contract - Statute of Frauds

Plaintiff alleges that defendant breached an oral contract between the parties by failing to pay commissions to plaintiff on season tickets sold to suite lessees. In seeking summary judgment on that claim, defendant asserts that the Kansas statute of frauds, K.S.A. § 33-106, bars enforcement of the alleged oral contract because it is an agreement that could not be performed within one year of its alleged making in January or February 2008. See id. In opposing summary judgment, plaintiff has not responded to defendant's argument that, even if plaintiff could have performed within one year by leasing all of the suites within that time, defendant could not have performed within a year by paying commissions that, by plaintiff's admission, were not due until defendant was paid annually over the term of the suite leases (which ran for terms of at least five years).

Nevertheless, the Court concludes that the statute of frauds does not bar plaintiff's contract claim at this stage. The relevant Restatement section provides as follows: "When one party to a contract has completed his performance, the one-year provision of the Statute [of Frauds] does not prevent enforcement of the promises of other parties." See Restatement (Second) of Contracts § 130(2); see also Augusta Bank & Trust v. Broomfield, 231 Kan. 52, 59 (1982) (citing comment to Restatement Section 130). The Kansas Supreme Court has applied that principal that "[f]ull performance of an alleged oral contract [by one party] relieves a cause of action thereon from the inhibitions of the statute of frauds." See McCabe v. Hiatt, 201 Kan. 57, 62 (1968). In this case, the parties have stipulated that plaintiff leased its last suite for the arena in 2009, and defendant has not suggested that any aspect of performance by plaintiff remains lacking. Accordingly, viewing the facts in the light most favorable to plaintiff, the Court concludes that plaintiff has completed its performance of the alleged oral contract, and the statute of frauds therefore does not apply. Defendant's motion for summary judgment is denied with respect to this claim.

IV. Promissory Estoppel

In the alternative to its contract claim, plaintiff asserts a claim for promissory estoppel, based on its allegation that it relied to its detriment on the promise by defendant's general manager that defendant would pay commissions to plaintiff on tickets sold as a part of suite leases. As a part of that claim, plaintiff alleges that defendant's promise induced it to require season ticket purchases as a condition of the suite leases, and plaintiff thus seeks to recover damages for the loss of commissions from the County on the unleased suites, on the theory that plaintiff would have leased those suites if defendant had not made the promise. To prevail on its claim of promissory estoppel, plaintiff must prove the following: "(1) [t]he promisor reasonably expected the promisee to act in reliance on the promise, (2) the promisee acted as could reasonably be expected in relying on the promise, and (3) a refusal of the court to enforce the promise would sanction the perpetration of fraud or result in other injustice." See Mohr v. State Bank of Stanley, 244 Kan. 555, 574 (1989) (citing Berryman v. Kmoch, 221 Kan. 304, 307 (1977)).

In seeking summary judgment on this claim, defendant first argues that it made no promise concerning commissions on unleased suites. Defendant, however, confuses plaintiff's damage theory with plaintiff's substantive claim, which is based on a promise by defendant that it would pay commissions on tickets sold in connection with suites actually leased by plaintiff. Defendant concedes that a question of fact remains concerning whether it made that promise. Defendant also concedes that a question of fact remains concerning whether its general manager at least acted with apparent authority in making any such promise. Therefore, any dispute about the making of the promise at issue does not provide a basis for summary judgment.

Defendant next argues that plaintiff could not have reasonably relied on such a promise as a matter of law. The Court rejects this argument, as it concludes that plaintiff could reasonably have decided that the possibility of a 20-percent commission on the tickets would make up for the loss of a commission from the County on suites that it was unable to lease because of the additional requirement that lessees purchase season tickets. In its reply brief, defendant also argues that plaintiff could not have reasonably relied on the promise of a commission from defendant because a season-ticket-purchase condition is standard within the industry for arena suite leases; plaintiff could have recommended lower suite prices to the County to make up for the added difficulty of leasing suites with the ticket-purchase condition; plaintiff conceded it had never received such a commission in its past work; and plaintiff conceded that it had not heard of such a high commission. As noted above, however, the Court must view the evidence in plaintiff's favor at this stage, and the reasonableness of plaintiff's actions presents a question of fact for trial. See Bouton v. Byers, ___ Kan. App.2d ___, ...


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