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ERA Venture Capital, Inc. v. Lokke

United States District Court, D. Minnesota

March 8, 2019

ERA Venture Capital, Inc., Plaintiff,
v.
Christopher Lokke; John Does 1-6; the City of Minneapolis, a municipal corporation; and Avis Budget Car Rental, LLC, a New Jersey limited liability company, Defendants.

          Ryan L. Kaess, Esq., Kaess Law LLC, St. Paul, MN, on behalf of Plaintiff.

          Brian S. Carter, Assistant City Attorney, Minneapolis City Attorney's Office, Minneapolis, MN, on behalf of Defendants City of Minneapolis and Christopher Lokke.

          Richard C. Landon, Esq., Gray Plant Mooty, Minneapolis, MN, on behalf of Defendant Avis Budget Car Rental, LLC.

          MEMORANDUM OPINION AND ORDER

          ANN D. MONTGOMERY, U.S. DISTRICT JUDGE

         I. INTRODUCTION

         On January 17, 2019, the undersigned United States District Judge heard oral argument on Defendants Christopher Lokke (“Officer Lokke”) and the City of Minneapolis' (collectively, the “City Defendants”) Motion to Dismiss [Docket No. 14]. Plaintiff ERA Venture Capital, Inc. (“Plaintiff”) has filed a Response [Docket No. 29] opposing the Motion. For the reasons set forth below, the City Defendants' Motion is granted.

         II. BACKGROUND

         A. Agreement

         On February 1, 2017, Plaintiff's predecessor in interest, ERA Venture Capital, LLC (“ERA”), entered into an Independent Operator Agreement (“Agreement”) with Defendant Avis Budget Car Rental, LLC (“Avis”). Compl. [Docket No. 1, Attach. 1] ¶ 8. The Agreement named an Avis affiliate as the “Licensor, ” and ERA as the “Independent Agency Operator.” Compl. Ex. A (“Agreement”) at 1.[1]

         The Agreement provided that ERA operate a car rental business at South 10th Street in Minneapolis, Minnesota (the “Location”) subject to terms and conditions stated in the Agreement. Compl. ¶ 9; Agreement at 2. With respect to the Location, the Agreement provided:

Both parties agree that [ERA] will operate the [L]ocation . . . on the terms and conditions stated herein. [Avis] will obtain the right to occupy the Location for the initial term of this Agreement and a business license, and will furnish the location with a Wizard Terminal and furniture. [Avis] shall be under no obligation to maintain the right to occupy the Location for any term beyond the initial term of the Agreement.

         Agreement at 2.

         As compensation for renting Avis' vehicles to customers, ERA was to receive a 12% commission of all rental revenues. Compl. ¶ 10. The Agreement specified that “[b]oth parties wish to establish an independent contractor relationship, ” and that ERA was to notify its employees that they were employed by ERA and were not employees of Avis. Compl. ¶ 11; Agreement at 5.

         The Agreement was for a one-year term ending January 31, 2018 “unless terminated before then by either party for good cause.” Compl. ¶ 12; Agreement at 6. Either party to the Agreement could give notice of its intention not to renew at least 90 days before the end of the term. Compl. ¶ 13; Agreement at 6. Notice was to be provided by certified or registered mail or by facsimile. Compl. ¶ 14; Agreement at 7. If no notice was given, the Agreement would automatically renew on its anniversary. Compl. ¶ 13; Agreement at 6. Paragraph 17 of the Agreement also gave Avis the right to terminate the Agreement immediately under the following circumstances:

1. The Location is abandoned or a threat to abandon the location has been made.
2. Vehicles have been dealt with by your employee, Principal or agent in a grossly negligent or reckless manner.
3. Your employee, Principal or agent engages in the unauthorized sale, rental, or use of [Avis] vehicles.
4. Your employee, Principal or agent engages in any act of dishonesty, violence, abusive or threatening behavior, misappropriation of funds, or any unlawful act of discrimination or demonstrates any racial, gender, religious or age insensitivity against any person including [Avis] customers or [Avis] corporate employees or business partners or affiliates[.]
5. Your employee, Principal or agent demonstrates poor customer service to a level likely to substantially impair ...

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