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Leiserv, LLC v. Summit Entertainment Centers, LLC

United States District Court, D. Colorado

September 12, 2017

LEISERV, LLC, a Delaware limited liability company, Plaintiff,
v.
SUMMIT ENTERTAINMENT CENTERS, LLC, a Colorado limited liability company, and SUMMIT COMPANIES INCORPORATED, a Colorado corporation, Defendants.

          ORDER

          PHILIP A. BRIMMER UNITED STATES DISTRICT JUDGE

         This matter is before the Court on Defendants' Motion to Strike Plaintiff's Belated Claim on a Promissory Note [Docket No. 89], Plaintiff's Motion in Limine Regarding Related Cases [Docket No. 90], and Plaintiff's Motion in Limine Regarding Unaccepted Offers and Settlement Communications [Docket No. 91]. This Court has jurisdiction pursuant to 28 U.S.C. § 1332.

         I. BACKGROUND[1]

         This action arises out of a dispute regarding the ownership and operations of a bowling and recreation center (the “Center”) in Colorado Springs. Defendant Summit Entertainment Centers, LLC (“Summit”) is the owner of the Center. Docket No. 116 at 1. Plaintiff Leiserv, LLC and its affiliate companies own or operate numerous family entertainment centers around the country. Id. at 1-2. Summit and Leiserv, Inc. (plaintiff's predecessor company) entered into an Operations Services Agreement (the “Agreement”), whose effective date was April 15, 2011. Id. at 2.[2] The Center opened in April 2012. Id. at 3.

         Disputes between Leiserv and Summit arose around the time Leiserv was purchased by Bowlmor AMF Corp. in the summer of 2014. Docket No. 91 at 2, ¶ 2. In relation to these disputes, the parties discussed the possibility of Leiserv purchasing the Center. Id.; Docket No. 114 at 2. In August 2014, Summit offered to sell the Center for $17 million, and Leiserv counteroffered $13 million, which Summit did not accept. Docket No. 91 at 2, ¶ 2; Docket No. 114 at 2.

         Although the parties reached a partial agreement on some issues, the dispute between them escalated and, in March 2015, the parties exchanged notices terminating the Agreement. Docket No. 114 at 2. In April 2015, Leiserv and Summit each filed lawsuits in District Court for the City and County of Denver, Colorado. Docket No. 90 at 2.[3] Leiserv filed a motion seeking the appointment of a receiver, which was denied. Docket No. 114 at 2. Both parties dismissed their cases. Docket No. 90 at 2.

         On April 19, 2015, Summit took over operations of the Center. Docket No. 116 at 4.

         On April 21, 2015, Leiserv filed a lawsuit in El Paso County District Court seeking to enforce non-compete agreements against its former employees who had gone to work for Summit. Docket No. 90 at 2-3.[4] The El Paso court administratively closed the case pending arbitration, but the parties did not proceed to arbitration. Id.

         In May 2015, the parties unsuccessfully participated in non-binding mediation. Docket No. 114 at 2-3.

         On June 17, 2015, Leiserv notified Summit of its intent to exercise a purchase option in the Agreement based on an alleged appraised value of $5, 100, 000. Docket No. 43 at 3. On June 18, 2015, Leiserv filed a complaint in this Court alleging, in part, that Summit breached the Agreement by not negotiating the fair market value of the Center in good faith. Docket No. 1 at 5-6. Plaintiff alleges that Summit's failure to negotiate in good faith is “delaying its ownership and enjoyment of the profits of the Center.” Docket No. 1 at 5-6, ¶ 27. On July 10, 2015, defendants filed counterclaims alleging, in part, that plaintiff breached its obligations of good faith and fair dealing under the Agreement by “mismanaging the business affairs of the Center (through personnel and other maneuverings) to deflate the value of the Center.” Docket No. 13 at 13, ¶ 31. Defendants also counterclaim that plaintiff breached the Agreement by failing to pay the Center's property taxes with funds it accrued for that purpose. Docket No. 126 at 9.

         On March 28, 2016, Leiserv filed another lawsuit in the District Court for the City and County of Denver, Colorado related to defendant Summit Companies Incorporated's plans to build a bowling center in Thornton Colorado. Docket No. 90 at

         3.[5]

         On March 31, 2016, the last day of discovery in this case, Leiserv served supplemental initial disclosures indicating that it sought damages based on a promissory note dated July 8, 2011 in the amount of $42, 256.00. Docket No. 113 at 2. According to its terms, the promissory note is due the earlier of (i) July 8, 2032 or (ii) upon Summit's transfer of the Center. Docket No. 89-2 at 1. Leiserv did not produce a copy of the promissory note in discovery, but, on October 10, 2016, provided it in response to a request from defendants. Docket No. 113-1, 113-2. In the final pretrial order, Leiserv stated that “upon termination of the Agreement and completion of the exercise of the purchase option, a promissory note came due that Summit failed to pay.” Docket No. 75 at 3. Defendants objected to the inclusion of this language as a new claim. Id. at 11. The same language about the promissory note appears in the amended final pretrial order. Docket No. 126 at 3, 11.

         On January 13, 2017, the parties filed the present motions. Defendants seek to strike Leiserv's newly-added claim for breach of the promissory note. Docket No. 89. Leiserv seeks to exclude evidence of all the other lawsuits between the parties, Docket No. 90, and the ...


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