Romeo Computer Company Inc v. Charles J Moran
369695
Mich. Ct. App.Mar 11, 2025Background
- Moran and Centala, former RCC employees, attempted to buy RCC's e-marketing division but RCC sold it to MIDS instead.
- After losing the purchase opportunity, Moran and Centala left RCC and, with Wallace, founded Digimark, a competing business.
- Plaintiffs (RCC and MIDS) alleged that Moran and Centala solicited RCC clients and disclosed confidential information, violating non-compete and confidentiality agreements.
- Plaintiffs initially failed to attach the full assignment documents transferring contract rights from RCC to MIDS to their complaint, leading to questions about standing.
- The trial court granted defendants' motion for summary disposition (dismissing claims), but denied plaintiffs leave to amend to include the required assignments.
- Plaintiffs appealed, asserting standing and the right to amend the complaint to cure deficiencies.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing of RCC | RCC has an interest since breaches occurred while operating | RCC assigned all related rights to MIDS, so has no ongoing interest | Plaintiff failed to show RCC retained any actionable interest post-assignment |
| Standing of MIDS | MIDS assigned the contracts, so has standing | Plaintiffs didn’t provide full assignment docs, so no standing | MIDS failed to attach necessary instruments; summary disposition proper |
| Leave to Amend Complaint | Amendments should be freely granted; asked to add missing docs | Plaintiffs waited too long/didn't act on leave to amend | Trial court abused discretion denying leave to amend; amendment must be allowed |
| Enforcement of Non-Compete | Agreements valid and incorporated | Agreements unenforceable, too broad, and/or wrong contract cited | Not reached on merits due to standing defects |
Key Cases Cited
- Coates v. Bastian Bros., Inc., 276 Mich. App. 498 (Mich. Ct. App. 2007) (non-compete enforceability and reasonableness under Michigan law)
- Barnard Mfg Co, Inc. v. Gates Performance Engineering, Inc., 285 Mich. App. 362 (Mich. Ct. App. 2009) (burden shifts to plaintiff to establish genuine factual issue)
- St. Clair Med, PC v. Borgiel, 270 Mich. App. 260 (Mich. Ct. App. 2006) (requirements for enforcing non-compete agreements and employer business interest)
- Lockport Twp v. City of Three Rivers, 319 Mich. App. 516 (Mich. Ct. App. 2017) (standards for summary disposition)
- Vushaj v. Farm Bureau Gen Ins Co of Mich, 284 Mich. App. 513 (Mich. Ct. App. 2009) (issue preservation for appeal)