The opinion of the court was delivered by: MICHAEL McCUSKEY, District Judge
Following a hearing held on April 1, 2005, in which both
parties were fully heard by this court, this court DENIED
Plaintiff's Second Motion for T emporary Restraining Order and
Preliminary Injunction (#23). This court stated that a written
order would be entered setting out the reasons for this court's
ruling. Accordingly, this Order sets out this court's factual
findings and analysis of the law.
Plaintiff, Bloomington Partners, LLC (BP), filed it is Verified
Complaint (#1) against Defendant, the City of Bloomington (the
City), on December 10, 2004. BP stated that its members are:
Beacon Sports Properties, LLC, a Delaware limited liability
company; Richard Adams, a citizen and resident of New Jersey; the
Sporting Life, LLC, a California limited liability company; and
Kemp Entertainment, LLC, a Nevada limited liability company. On
December 20, 2004, BP submitted a Notice of Jurisdictional Statement (#14) which set
out the citizenship of all of BP's members and showed that none
of its members are Illinois residents or citizens. This court
therefore entered an Order (#15) and concluded that this court
has jurisdiction over this case based upon diversity of
citizenship. See Belleville Catering Co. v. Champaign
Marketplace, LLC, 350 F.3d 691, 692 (7th Cir. 2003).
In its Verified Complaint, BP sought an injunction requiring
the City to engage in the dispute resolution procedures set out
in Paragraph 16.2 of the Development and Management Agreement
(Management Agreement) between BP and the City. Count I of the
Complaint alleged breach of contract and Count II was based upon
promissory estoppel.
On December 13, 2004, a hearing was held on BP's original
Motion for Temporary Restraining Order (#3) which was filed on
December 10, 2004. BP sought a temporary restraining order
enjoining the City from repudiating BP's Management Agreement and
from negotiating or approving a new agreement with a third party,
pending arbitration proceedings, as required by the Management
Agreement. At the hearing, BP's counsel argued that "[t]here's no
way the City could in good faith participate in that dispute
resolution procedure if it had already entered into a contract
with someone else."
After reviewing the exhibits presented, hearing argument and
hearing the testimony of David LeFevre, principal in Beacon
Sports Properties, this court concluded that BP had not met its
burden to establish that an unambiguous, complete, and fully
executed contract existed between the parties. This court noted that BP had provided only an unsigned copy of
the Management Agreement. This court also agreed with the City's
argument that it was unclear whether the exhibits referred to in
the agreement had been submitted at the time the City Council
adopted and approved the agreement on April 26, 2004. This court
also concluded that BP failed to show that the City made
unambiguous promises that were relied upon by BP. This court
further noted that BP had not shown a reasonable likelihood of
success on the merits or that it had an inadequate remedy at law.
This court indicated that damages for breach of contract would be
"easily determinable." This court therefore concluded that the
requirements for injunctive relief had not been met. Accordingly,
BP's original Motion for Temporary Restraining Order (#3) was
DENIED.
On March 24, 2005, BP filed its Second Motion for Temporary
Restraining Order and Preliminary Injunction (#23), with attached
exhibits, and a Memorandum of Law in Support (#24). BP stated
that it had received written discovery responses from the City
which erased "any possible doubt" that BP and the City entered
into an unambiguous agreement in April 2004. BP also stated that,
after this court denied its original Motion for Temporary
Restraining Order on December 13, 2004, the City Council, that
same evening, approved a new development and management agreement
with an entity named BNAM, LLC, also known as Bloomington-Normal
Arena Management, Inc. BP stated that the BNAM Agreement was
substantially similar to BP's agreement with the City and even
referenced many of the same exhibits. In its Motion, BP requested
that this court enter an Order stating: 1. A temporary restraining order shall issue
immediately ordering the City, whether directly or
indirectly, alone or in concert with other person(s)
[is] immediately enjoined and restrained until
further order of this Court from performing any term
of the BNAM Agreement or directly cooperating with
BNAM in the performance of any such contract, or
negotiating a management or development agreement
with any other person or entity until further order
of court.
2. The parties are directed to pursue dispute
resolution procedures set forth in par. 16.2 of the
BP Agreement as to all disputes which have been or
could be raised between Bloomington Partners and the
City of Bloomington. All proceedings herein between
Bloomington Partners and the City are stayed pending
final resolution of the disputes.
The documents attached to BP's Motion, which include a
transcript of the December 13, 2004, hearing before this court,
show the following facts. John Butler and Michael Nelson are
Bloomington locals and have been involved in the planning of an
indoor sports arena (Arena Project) in Bloomington since at least
2000. In June 2000, they approached Richard Adams regarding the
Arena Project . According to Adams' affidavit, Nelson, Butler and
Adams worked together throughout 2000, 2001, 2002, and early 2003
to bring a hockey team to the City and to establish themselves as the management of the Arena Project. Adams
subsequently brought LeFevre into the project and also recruited
Barry Kemp, the principal of Kemp Entertainment, LLC.
In January 14, 2002, the City entered into a Consulting and
Sales Agreement with Central Illinois Arena Management, Inc.
(CIA), an Illinois corporation. Nelson is president of CIA and
Butler is its secretary. The agreement stated that the City
"hereby appoints CIA as its exclusive agent providing consulting
services related to the design and marketing of the [Arena]
Project and to procure third party funding sources for the
development of the Project."
According to LeFevre's affidavit, in the months following July
2003, Kemp, Adams, Butler, Nelson, and LeFevre agreed among
themselves to jointly make a proposal to the City in the name of
"Bloomington Partners," a to-be-formed entity, under which BP
would manage the Arena Project, provide one or more anchor
tenants, furnish food and beverage concession equipment, and
otherwise give financing guarantees for the Arena Project.
Contract negotiations continued during the latter months of 2003.
A proposed Agreement, with attached Exhibits A-H, was sent to the
City on December 3, 2003. In addition, during this time, the five
individuals involved provided extensive financial and planning
services to the City in connection with the Arena Project.
During January, February and March of 2004, LeFevre engaged in
contract negotiations with the City regarding the content of the
Management Agreement. A final draft of the Management Agreement
was submitted to the City on or about April 7, 2004. No changes
were made to the Exhibits which had been provided to the City in
December 2003. On April 26, 2004, a public meeting was held, and the City Council accepted and approved the
Management Agreement by an 8-0 vote. On April 27, 2004, Mayor
Judy Markowitz signed the Management Agreement on behalf of the
City. The Management Agreement, drafted by LeFevre, provided, in
pertinent part:
WHEREAS, the City is in the process of considering
the development of a sports and entertainment center,
currently known as the Bloomington Sports and
Entertainment Center (the "Center"), to be located in
downtown Bloomington and serving the surrounding
regional markets;
. . .
WHEREAS, in furtherance of the development of the
Center, the City has previously entered into a
Consulting and Sales Agreement (the "CS Agreement"),
a copy of which has been attached hereto as Exhibit
A-1, with Central Illinois Arena Management, Inc.
("CIA");
WHEREAS, the CS Agreement provides that CIA will
provide, as the City's exclusive agent, comprehensive
services with respect to the development of the
Center, such services to include assistance to the
City in the design of the Center, the marketing and
sale of key revenue generating sources for the
Center, including naming rights, suites and club seats and
sponsorships, the securing of primary tenants and
the procurement of private and third-party funding
sources for the Center;
WHEREAS, the CS Agreement also provides certain
rights of CIA with respect to future management and
operations of the Center;
WHEREAS, the parties acknowledge that the principals
of CIA are principals of BP and that, by mutual
agreement of the City and CIA, the CS Agreement will
be terminated simultaneously with the execution of
this Agreement in accordance with Exhibit A-2
hereof;. . . .
Exhibit A-2 was an unsigned Termination Agreement terminating the
CS Agreement between the City and CIA. The Management Agreement,
among other things, provided that BP would purchase naming rights
for the Arena Project for $2 million and had the right to resell
the naming rights to a third party.
The Management Agreement included paragraph 16.2, which set out
a lengthy cooperation/mediation provision. Paragraph 16.2
provided that "any dispute arising hereunder will first be
referred to the parties' respective agents or representatives
prior to either party initiating a legal suit, who will endeavor
in good faith to resolve any such disputes within the limits of
their authority and within ninety (90) days after the
commencement of such discussions." Paragraph 16.2 provided that, if any dispute remained unresolved, it would be
subject to mediation and, if that was unsuccessful, arbitration.
Paragraph 16.2(h) provided that a party could file a complaint to
seek a preliminary injunction if such action was necessary to
avoid irreparable damage or to preserve the status quo.
On May 3, 2004, Articles of Organization were filed
establishing Bloomington Partners LLC as a limited liability
company. On May 10, 2004, a press release was issued. The press
release was prepared by Nelson and approved by Tom Hamilton, City
Manager for the City. It stated that BP had signed a 10-year
facility management agreement with the City, set out some of ...