CORPORATE LODGING CONSULTANTS INC v. BOMBARDIER AEROSPACE CORPORATION Complaint

8/7/2019 CORPORATE LODGING CONSULTANTS INC v. BOMBARDIER AEROSPACE CORPORATION Complaint

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TRIPLETT, WOOLF & GARRETSON, LLC2959 NORTH ROCK ROAD, SUlTE 300WICHITA, KS 67226(316) 630-8100

vs.

Delaware Corporation,

Pursuant to Chapter 60,Kansas Statutes Annotated

Plaintiff,

l4J () ():5

FILEDAPP DeC:::T ;:'J.___

ZOO] NOV 20 A 10: 31

Case No.

03CV 5068

----------------, .. ----- .._-------PETITION

COIvlES NO W Plaintiff, Corporate Lodgillg Consultants, Inc. ("CLC"), and for its causeof action against Defendant Bombardier Aerospace Corporation, Inc. ("Bombardier") alleges andstates the following:

1. CLC is a Kansas corporation organized and existing under the laws of the State ofKansas with its principal place of business in Sedgwick County, Kansas.

2. Bombardier is a Delaware corporation organized and existing under the laws ofthe State of Delaware with its principal place of business in Collin County, Texas. It can beserved with process through Michael McQuay, 3400 Waterview Parkway, Suite 400,Richardson, TX, 75080.

3. Jurisdiction is proper pursuant to K.S.A. 60-308(b )(5).

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4. Venue is proper in this Court pursuant to K.S.A. 60-604(2)-(3).5, On May 8, 2001, CLC and Bombardier entered into a System Lodging

Agreement, hereinafter referred to as the "Agreement." A copy of the Agreement is attachedhereto as Exhibit "A."

6. Pursuant to the Agreement, Bombardier agreed to utilize CLC's services to locateand secure hotel rooms for Bombardier' s employees or designees. Bombardier agreed to payCLC the amount of $4.41 per hotel night.

7. CLC specifically agreed to use its best efforts to negotiate and obtain low hotelrates for Bombardier and to provide Bombardier monthly Savings Reports identifying thelowered rates and the savings accrued for Bombardier each month.

8. Pursuant to Paragraph 1(i) of the Agreement, the savings calculated in themonthly Savings Report, were detennined by subtracting the base rate from the current rate. Thebase rate was generally the amount Bombardier paid prior to contracting with CLC and thecurrent rate was the rate negotiated by CLC and obtained for the benefit ofBombardier.

9. Pursuant to Paragraph 2(b) of the Agreement, Bombardier expressly agreed thatsubstantially all of its flight crew lodging would utilize the hotels provided by and billed throughCLeo

10. :Bombardier also specifically agreed to pay CLC within seven business days afterreceiving an invoice from CLC for Bombardier's hotel charges and CLC's fees. Moreover,Bombardier agreed to pay a 1.5% late fee if it failed to pay the invoices within seven businessdays.

11. The Agreement provided in part:3. Term, Revision or TerminationT1IIS AGREEMENT shall commence on June 11 th, 2001 and shallcontinue in effect for a minimum period of not less than thirty-six

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(36) months. At any time, the terms and conditions hereof may berevised upon the mutual written agreement of both parties. Eitherparty may cancel THIS AGREEMENT upon thirty (30) dayswritten notice for cause. Cause shall be defined as occurrenceswhere:

1) CLC abandons the work or delays in performance ofthe lodging services for an unreasonable length of time,and/or:2) Either party breaches or fails to comply with any of theprovisions hereof.If during the fourth full month of this agreement CLC has notsaved [Bombardier] at least 10% (net of fee) during the priormonth, [Bombardier] may cancel this agreement upon a thirty (30)day written notice.COUNT I - BREACH OF CONTRACT - WRONGFUL TERMINATION

@OO;i

12. CLC incorporates by reference paragraphs 1 through 11 of its Petition as if fullyset forth herein.

13. Bombardier terminated the Agreement in a letter dated July 2, 2003. The letterstated that "Bombardier no longer believes that CLC has used its best efforts nor will CLC useits best efforts in the fuhrre to secure the most competitive hotel rates for the personnel ofBombardier. "

14. However, Bombardier wrongfully terminated the Agreement because CLC fullyperformed its obligations under the Agreement and thus, term.ination was not proper pursuant toParagraph 3 of the Agreement.

15. Pursuant to its obligations, CLC provided Bombardier monthly Savings Reports,indicating the dollar amount and percentage CLC saved Bombardier each month on hotel rates ascompared to the rates Bombardier had paid prior to the Agreement. A copy of a Savings Reportfor the month of March 2003 is attached as Exhibit "B."

16. CLC always saved Bombardier substantially more than Ten percent (10%) per

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month during the term of the Agreement. Specifically, CLC saved Bombardier a total of TwoMillion One Hundred Fifty-Three Thousand Six Hundred Forty-Eight Dollars ($2,153,648)between July 2001 and August 2003. Exhibit "C" provides a detailed accounting of the exactamount CLC saved Bombardier each month on hotel rates and the weighted average wasapproximately Thirty percent (30%).

17. Bombard ier' s wrongful termination has caused CLC damage in the approximatealTIount of One Hundred Seventy-One Thousand Three Hundred Seventy-Three Dollars($171,373).

WHEREFORE, CLC prays for judgment against Bombardier in the amount of $171,373,said sum representing the amount ofCLC's lost fees as a direct result of Bombardier's wrongfultermination of the Agreement, for pre-judgment and post-judgment interest as allowed by law,for its costs, and for such other and further relief as this Court deems just and equitable.

COUNT II - BREACH OF CONTRACT - NON-EXCLUSIVITY18. CLC incorporates by reference paragraphs 1 through 17 of its Petition as if fully

set forth herein.19. Bombardier specifically agreed in Paragraph 2(b) of the Agreement that

"substantially all of [Bombardier's] flight crew lodging [would] utilize hotels provided by andbilled through CLC."

20. Notwithstanding the fact that CLC saved Bombardier each month on hotel rates,a substantial amount of Bombardier's employees or designees failed to utilize hotels provided byand billed through CLC and thus, Bombardier breached the exclusive dealing provision of theAgreement.

21. CLC lost approximately Two Hundred Thirty-Five Thousand Sixteen Dollars

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($235,016) in fees between July 2001 and September 2003 when Bombardier breached theexclusi ve dealing provision of the Agreement as set forth in Exhibit C.

WHEREFORE, CLC prays for judgment against Bombardier in the amount of$235,016,said sum representing the amount of CLC's lost fees as a direct result of Bombardier's breach ofthe exclusive dealing provision, for pre--judgment and post-judgment interest as allowed by law,for its costs, and for such other and further relief as this Court deems just and equitable.

COUNT II I - BREACH OF CONTRACT- LATE FEE22. CLC incorporates by reference paragraphs 1 through 21 of its Petition as if fully

set forth herein.23. Pursuant to Paragraph 2(d), Bombardier specifically agreed to pay CLC within

seven business days after receiving an invoice from CLC for Bombardier's hotel charges andCLC's fees and pay an addition 1.5% late fee if it failed to pay the invoices within sevenbusiness days.

24. Bombardier only paid CLC on time in December 2001, May 2002, andNovember 2002.

25. Pursuant to Exhibit "D," Bombardier incurred approximately Seventy-FourThousand Four Hundred Thirty-Six Dollars ($74,436) in late fees between July 2001 and August2003.

WHEREFORE, CLC prays for judgment against Bombardier in the amount of $74,436,said sum representing the amount of Bombardier's unpaid late fees for its breach of Paragraph2(d) of the Agreement, for pre-judgment and post-judgment interest as allowed by law, for itscosts> and for such other and further relief as this Court deems just and equitable.

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Respectfully submitted,:::Z=Z0N,LLCJames A. Walker, #09037Attorneys for Plaintiff

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Exhibit A

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rQ,sn"t by;) BUSINESS JE T SOLUTIO! C) 972 720 2558; 05/0SYSTEM L.ODGING AGREEMENT: .

'. THJS. AGREEMENT. ~ d e on the 8" day ~ f . May 2001. by and between Corporate LodginConsuJtants. Inc. 'C'CLC")-Jocated at f3110 E. 3.2nd Stree,tNorth. WIchJta t Kansae 67226-2614, and BombardieAerospace Corporation dIP!a B o m ~ a r d l e r Business Jet S o J u t i o n ~ Inc. ( ~ o n 1 p a ' n y ' j located at 14651 DaUaParkway. Suite 600. Dalta$t TX 75240. .. '.. .' .'. . .' .. .. WHEREAS COMPANY desires to utiljze the services p r o v i ~ e d by. CLe' to enable' COMPANY tefficJent1y rocate ~ ~ d secure o v e r : n j g ~ ~ lodging f a ~ J f I t i e s (-HOTELS") for use by C O ~ P A N Y ' S flJQht c r ~ oother persons as COMPANY may designate. .

. .WHEREAS., It is t n ~ intendon of both .COMPANY and' CL.C Jhat THIS A G R ~ E M E N T wiU d a ~ b . thaeivices to be p ~ o v i d f J d to COMPANY by CLC and the l e ~ of payment of CLe's compensatjon fo r aak5 ~ r v l C e S ~ '. . . . .

NOW. THEREFORE, ~ o r 'and In c;orisideration of t h ~ ~ u t u a l e()venants cOntained herein. tha p ~ r t l e a g r e ~ as.foUows: . .1. CLC agrees to: .a) 'Use Its best effolta 10 locate HOTELS 'With favorable rates and 'otherwise satlsfactory to COMPANY inlocationa E t ~ required for ~ ~ e by COMPANY ~ m p l o y e ' e s or des;gnee&" .b) ." Provide eomplete U ~ t J n g of an HOTELS currently approved by etc and C O ~ P A N Y fo t u s ~ byCOM FlANY employees or ~ e s l g n ~ e s ... ~ 8 1 d Ustlng shall Indude HOTEL a ~ d N 3 6 s e s , locations .and phonenumbors to be used by COMPANY as Its approved hotel Ir$tfng.. ClC $hall provJde $sicf f i ~ n g $ quarterly at no-.chargeto 'COMPANY and ! 'or to. a COMPANY d.esignated travel age.ocy, after executing a confidentialitya g r e e m e ~ t with said travel. agency. .c ) . . A p p r ~ e and ~ ~ h o r i z a for u5tl onjy. the HOTELS P ~ v i O U ~ . ~ p ~ r O v ~ d by COMPANY. '. The partiesagree that ClC shaO have no retpcnalblll.ty for the safety of COMPANY'$ 'employees In connectJon WIth ClC. providing ~ e r v i c 9 hereunder and t h a ~ Cl.C makes no warranties' or representations of 'any kind with respect tothe safety of any Hotel facilities. servlce$. grounds. transportation 'servlces or surrounding areas. .. .-.... . . ..dJ

P r o v i ~ e pJa&tJo Identificat[Qn cardS for use by COMPAN'tS

8 m P k ? ~ e e s ~ n d d e s i ~ n e e f i ..t nD charge.

e) Use Its best e f f o r t s ' t , ? ' n e g o t i ~ : 1 t e for obtain the lowest ralSs at aU HOTELs Zlpproved by COMPANYand to provide to COMPANY' monthty -Savings R 8 ~ r t s " listing the lowered rates .and savings 8CCn.led fo rC O M P A N Y ~ f ) . AQ:apt'and process bUJJrigs from HOTEI.;.S for COMPANY JodQing expenSes and provJde t() COMPANYa single, 'consolldated weekly or & e m i ~ n t h ' Y .Iodging. invoice, Induding i.nformation ss may be agreed uponby the Parties. }n the event e lC provides electronic e q u i p ~ n t or EDI.blUing capability to HOTELS. CLC maycollect a .typical credIt card precessing feo from partjcipatJng' HOTELS. . .. . . . . .g) . To promptly. disburse elf paYl,'nents to HOTELS uPon receJpt of payment from COMPANY and to payHOTELS for all biUlngs for which COMPANY has p ~ i d CLeo In the event thatCLC prepays HOTELS prior 10receipt of payment 'from COMPANY, CLe reserves the right to charge HOTEL a factOring 1ee fo r prepaymentservices.h) To provide the aervices of the Help Desk' for emergency hotel reservation needs. Emergency hotelreservation needs are deftned. as those requIred Within 48 hours or less lead-time or when a contracted hotetIs unavellab'e. Hours of operation are 24-hours-a--day. 7-days-a-week. If a direct.blH hote4 is not available, HIeCOMPANY"s corporate credit card will be required for g.uaran.roe and blUing arrangemt!!"ta;

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SeRt .py': BUSINESS JET SOlUTIL 972 720 2556;' 05/l Oy7; 47 i ~ # 2 a 8 ; P a g e 3 /4. \..)I) For the puipose of calcuJatJng 'savings, bass rates wiU be established. at COMPANY's FBO destinauscog the following gu,1deUnf!S: " " . . " ., , .' 1) A base rate ,Is' established by usjng the curr9nt rate, or the r.ast fC}le (plus appUeabla taxes) paJ

at'a HOTEL by" COMPANY if paid wlthio the last thrM (3) months poor to implementing THISAGREEMENT'. T.his,informa,t1on is to ba supplied by COMPANY at program'lnception . ~ ' n d verfned bCLC,' , ' . " ,', . .. 2) , if there is no such, preViOUS rate p ~ i d , t h ~ .bass ra[8 Js'the midpoint of the p u b J f s h ~ FBD ratss.3) . ' In order to compensate for lhe effact of Inflation. ,at the end of eaoh t w e J ~ a {12} month term othis AGREEMENT, the 'base rates will be adjusted In aCcordance.with. the InftatJonary, rate as reporteby Sm'lh TravetResearch. '

2. COMPANY agrees to: ' ' , : ' ' . .a) 'Promptly approve or dJsapprove HOTELS p ~ v l d e d by eLC f o r . p ~ s i b J a COMPANY use.b) . " . Ref&r all: J n q u i r i e ~ from ~ O T E L S r e g a r d j n ~ i COMPANY lodging to eLC f o r ' c o ~ s ; d e r a t i o n and exert aUreasonable effort to li!nsure that COMPANY's flight crews utiJize HOTelS p r o v l d ~ by.eLC. Pricing and termsof THIS AGREEMENT, are set with t ~ 8 agreement of the parties that substanHally' aJJ of C O M P A N Y ~ nIghCfEYW 'kJdgJng wilt utnf2a hotels provided by imd blUed :through ClC..c)' ,. Consider aU forms, reports. ~ o t e r ' j ~ n g s 1 : hotel:rates, hotel contracts, prooe,u8s and proceduresprovided by eLC h e r s u n ~ e r ( h ~ r e i n a f ' t e r jointly referred to as ~ P r o p r i e t a . r y Intonnatiof1=) ate t h e , e x c f u s ~property of CLe, at an times. COMPANY is only authorized to usa ~ a j d Proprietary fnformatiofl. for thepurposes contemplated by THIS AGREEMENT. COMPANY shalt not reproduce or release this ProprietaryInformation to other ~ r s o n s without .the prior written 'consent CLC. It)8 undenrtood the purpose of this~ e c t i o n is' to protect ',CLC .and to prevent the r e l e a s ~ and utilization of Proprietary' Information by ClC'scompetitors or p o ~ e n t f a J competitors. ' . ' ."d) " P ~ o m p t r y pay CLC by electronic transfer Wi1hi!" s e ~ e n (7) bU51ness days of receipt of GlC r n v o i ~ for aUvalid hotel charges billed to COMPANY. Payments not.made within agreed terms wIll Incur a one and on&-haJpercent ( ~ 4 ' 5 % ) late fee. COMPANY is, so1aly ~ p o f ) s j b J e fo r aU HOTEt charges Incurred' on behalf of, COMPANY employees designeess and indemnifies and hDlds CL.C harmless from any and an tlabUIty forsud") c h a r g e s ~ including attomey's fees required to defend or p ~ e any action. to coIJer:;t on ~ u c h oharges., prov{ded such liabi lity fa not the tesuft of eLC's gross n&gUgence or wfllful m ~ s c o ~ d u c t e) Regard pfasnc ' i d e ~ t i f l c 3 t I ? n ' c a ~ s supplied by CLC as beIng solery the propany of CLeo and that aUsaid cards lfJr9 subject. to .Immediate canceJlaUon upon notiw from ClC. COMPANY shall' lmmediatetydIscontinue use of said cards anc;f cause t t i ~ m to be rehimed to CLC, upon CLe's written notfce.. " . '. .f) Pay to CLC In C o n s i d 8 r a t J o ~ fo r services provided hereIn an amount ~ ~ a " to 54.41 per approvedHOTEL single day ~ a r g e fo r each stay by .COMPANY emploYr:te:s or designees. Such amount w;H be addedby CLC to net room charges payable by CLC to HOTELS ~ n d billed ~ y : C t . . C 10 COMPANY. If such fees'equafless than $1.000 pa r month, a mJnJmum tee of $1.000 will be charged that month ($1,000 per bjJljng locatJon ifClC biBs to ~ u J t i p ' e focations). C o n ~ J d e r a d o n Is based upon a long-term con t r a c t . , .g), Notify elC mmed'ately 01 the loss 'or theft of any CLC identiflcation c a r d ~ , For' Hotels that do nottransmit charges sJectronJcaJJy to CLew COMPANY shan remain responsible for use of an personalIZed cardswnW two (2) PusJne$$ days after J'ece.ipt by CLC 01 'I!rltten notice 'by r e g i 8 t e ~ d or cerUnCtd man or fitcsimiJa ofsaid loss or theft. For temporary (non-personaJIzed) cards COMPANY shan ramain re5pcniible for the USB ofthese cards fo r the dori;3tion of THIS A G R E E ~ E N T . .

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. ~ e n t ,by: BUSINESS JET SOlUTl 972 720 25f56;

3. Term, RevfsJon or Terminatlon ' . ' : . ', ,THJS AGREEM5NT shalt commence on June 11 th t 200.1 and shalJ continue in effect for a minimuperiod of no t J e ~ s ,than thirty-she (38) months. At any tfme, the terms and condltlons her'9of may be revIs,upon the m u ~ a ' wrytten agreement of both partJes.E j t h ~ r party may cancej THIS AGREEMENT u'pon thirty (30) daYs written ' J l O t ~ for cause. cause shdefined &5 occurrences where: . . . . . .

, 1) , ClC abandons t ~ e w ~ k or d e ' ~ y s In performance or ' ~ h e ' l o d 9 i n g servJces for an unreafSonabJa lent i m e ~ and/or: .. . . ..2) Either ,party b r e a C h e ~ or faits to comply wIth any of the provtslons hereof.. ,If durinQ tha fourth f u l l ' m o ~ t h i.his agr,ernent c ~ c i : has not saved COMPANY at least 10% (het'fee) during prlprmonth, Company m ~ y cancel this agreement upon a thirty ( 3 0 ) : d a ~ ~ n ~ , n o t i c a . It, at any time during the term o f t h j ~ agt ~ B n t . THE'COMPANY, acting' .rone or in ,;onJunctJowIth an 'atnllate, increases the transaction volume of thla contract'to a fevel excaeding, 5 1 ' ~,tran$actJons per month; COMPANY and CLC agru ~ r . n e g o t l 8 t a th8,.$4.41 TransJlCtfcn , ~ t ' J e ' ~ section ~ ( f ) above.. If, ~ f t . r ' good faIth' negotJatJon, the parties are unable to r e a ~ h an 3g1lloment Iwriting as 't o the naw' negotiated TransactIon' Fee. ,COMPANY' reserves the rIght to tennlnate THJ

AGREEMENT upon 30 days prior wrJtten notice, but only attar th e J n i t l ~ 1 twelve (12) months Of 'THIAGREEME,NT. '4. LlabJlity " ,company and CLC agree to hold eaCh other harmless from any and' alf I ~ e s . Incldenta. oconsequential damaSes. w n l ~ h are alleged to aJise' directly'or tndtrealy out of the perlormanqe or fsHure t, perform 'any $ e r v J ~ or obllga-oons under THIS AGReeMENT, ~ g W T . f I e 8 8 of the nature of the' daim or ththeory 'Of ,recovery a.&eerted against qLC or Company. induding claims t ~ a t CLC or Company was at faulnegllgent, 'or stria,lIy liable. . . 's. .Enti.... A g r t H l m , e ~ t . '. 'THIS AGREEMENT s u p e r s ~ d a s aU prior negotiations or agreemehts between the ~ r t l e s . ( w h e t h e written or qraJ) , r & J a ~ g to the subject matt$r hereof and is Intended as the .entire and complete statement othe terms ot:agreement between the Parties.

iN WITNI;SS. WHEREO'F" the parties have executed THIS AGREEMENT as of the date ffrst abovewritten. . '.,. . ' ,. ' . .

KEVIN, BAUERVice President. Salefi & MarketIng

. BomwdlarAerospace Corporation d/b/aBombardi.,. B U f l i n ~ Jet Solutions; J&:1c.

SY__ ~ ~ ~ ; - ~ ~ ~ ____________NAME TIM c., It6fZJL

. ' TJTLe VP t-UGIf) ( j P B l ~

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CORPORATE LODGING CONSULTANTS INC v. BOMBARDIER AEROSPACE CORPORATION Complaint