Kalamazoo Business Vindicated by Unanimous Jury Verdict in Covid-19 Refund Case


Kalamazoo Business and Principal Ryan Reedy Prevails with Unanimous Jury Verdict.

Wedding venue operator, Entertainment Managers LLC, and its Business Manager, Ryan Reedy, were fully vindicated at trial by a unanimous jury verdict on ALL counts from allegations by Kristyn & Bryant Powers. The jury trial was held on March 14, 2023, in Kalamazoo County 9th Judicial Circuit Court.

Unanimous Jury Verdict Vindicates Kalamazoo Business and Wedding Venue Loft 310 and Manager Ryan Reedy Kalamazoo.

This was despite American Arbitration Association (“AAA”), Kalamazoo County Courts, and the Michigan Court of Appeals disregarding the same facts in other cases, along with WWMT news channel 3 reporter Mike Krafcik strategically working with the couple’s attorney, Philip Hamilton, to help the couple win at their upcoming trial by misleading the public and distorting the facts with a one-sided report of the opposing party’s “allegations”.

WWMT Reporter Mike Krafcik, went as far as to try and manufacture a criminal investigation with the Michigan Attorney General by sending multiple false facts to the AG regarding the company. When Mr. Krafcik’s efforts were unsuccessful, he falsely claimed in his report that the company was under investigation anyways.

Prior to Covid-19, Entertainment Managers had executed over three thousand private events in the previous twelve years without a legal complaint ever filed. Its flagship venue Loft 310 had a 4.7-star review on Wedding Wire and 4.6-star review on The Knot. The company employed over one hundred full- and part-time staff and brought over thirty thousand new visitors annually to Kalamazoo from all over the country.

Collateral Damage

Entertainment Managers was one of many wedding venue operators throughout the state pummeled during the pandemic by distraught couples, their families, and opportunistic lawyers who were fully supported by American Arbitration Association (“AAA”) arbitrators and Michigan state judges that did not agree with the governor’s executive orders.

Out of one hundred and twenty five clients scheduled during the pandemic in 2020-21, The Powers, and roughly fourteen other couples were unwilling to adhere to state restrictions, and chose to host their event at another venue on their original date. After their weddings, these couples then filed lawsuits claiming that Entertainment Managers were unable to host their event and had canceled on them. Both of which were untrue.

Notably, Entertainment Managers’ unanimous jury verdict was the ONLY case heard by a jury, and was based on the same facts, circumstances, and contracts that were ignored in ALL other cases heard by the American Arbitration AssociationKalamazoo County Courts, and Michigan Court of Appeals.

In one of the cases, Judge Christopher T. Haenicke, chief judge of Kalamazoo County 8th District Court denied Entertainment Managers a jury trial, and accepted the opposing party’s allegations in violation of Michigan law. The Judge based his ruling on the “smell test”

All right. We’ll I’ll be quick about this. Just from an outset, it doesn’t pass the smell test. I get it that, you know, we — the person who is not here is the governor, who basically is responsible for that they couldn’t have their wedding. And I’m not making a comment — don’t read anything more into that. But she made the order, or whoever made the order that they couldn’t have the reception that this couple wanted to have. Judge Christopher T. Haenicke

On October 3, 2023, the Michigan Supreme Court ordered the Michigan Court of Appeals to review Judge Haenicke’s ruling, which the Court of Appeals previously denied as “Meritless”. The hearing is now on the docket and set to be heard in 2024.

Company Background

Entertainment Managers, LLC (“EM”) is a hospitality management company located in Kalamazoo, which offered private events under the brand names Entertainment District, Loft 310, The Gatsby, Wild Bull, SkyDeck, Monaco Bay, The Chapel.

The company hosted large-scale, multi-venue private events for weddings, corporate, social, and political clients which include full service event planning, catering, beverage, a/v, decor and vendor management in multiple venues, with multiple events. In most cases, the company would plan and host Wedding clients ceremony, cocktail party and reception in three separate venues with guests counts of 250+ persons on average.

The company’s revenue and operating budget was almost entirely dependent on non refundable pre-sold contracts for (28) peak dates per season, which are sold 12+ months in advance during the months of April through October.

Based on those contracts, the company makes financial commitments a year in advance for full and part time staff, property leases in multiple venues, equipment, vendor services, and provides each client with full scale event planning services and vendor procurement which cannot be resold if clients cancel. On average, 70% of the event cost is incurred by the company starting more than twelve months before the day of the event.

The average cost to hire a full-service planning and coordination package starts at $7,200 with an average of 300 hours into planning, designing, and producing a wedding for 100 people. Brides.com

Based upon direct expenses incurred on client’s behalf that cannot be recouped, and lost revenue on canceled dates that cannot be resold less than 6-9 months out, all clients agree to non-refundable contracts, and all clients agree to make non-refundable progress payments “not deposits” toward the actual cost of the event that is incurred more than twelve months before their event date.

In the event of postponement, all clients agree they would only receive a credit toward the rescheduled event date of 25% for peak date or 50% for non peak dates. This is based on the fact the company will lose the revenue from the original date it is dependant upon to meet its budget, as well as significant administrative expenses to plan and coordinate the new date and time.

Covid-19 Pandemic

In March 2020, the Covid-19 pandemic hit and Governor Whitmer issued a series of Executive Orders that imposed restrictions on Michigan residents and businesses, and prohibited the public from gathering in groups of more than 10 from March 2020 – June 13, 2020, and then further imposed distancing and mask requirements until August 2021. The EO’s primarily limited the “public” from gathering, which impacted clients and their guests to varying degrees and forced clients to either host their events under restrictions, postpone or cancel.

Due to the pandemics adverse financial impact on the company which lost 95% of its income for sixteen months, it was forced to uphold the cancellation policies without exception for all clients, and to ensure the ongoing operations for the 85% of clients that rescheduled and chose to follow restrictions and the parties agreement.

However, EM was committed to ensuring all clients who were affected were able to reschedule their event at 100% credit, while at the same time being able to remain operable for the 85% of clients who chose to reschedule.

Instead of only providing the contractual 25% during peak dates or 50% credit during non-peak, EM offered its clients 100% credit toward a new date if their event was affected in whole or in part by the Covid Restrictions, with the company incurring 100% of the added expense.

This enabled clients to reschedule for any day of the week, including Saturday, during the months of November through March, as well as any day of the week, including Saturday, all year with short-term dates available less than ninety days out.

Opportunistic Lawyers

Unfortunately, this was not acceptable to some clients who decided to host their event elsewhere that did not follow restrictions, and some of those clients then filed arbitration demands or lawsuits effectively seeking to make the company pay for their event elsewhere, regardless of the 12+ months of costs incurred on their behalf and multiple contracts where they had agreed their contract was non-refundable due to the upfront cost that could not be recouped.

In 90% of the cases filed against EM, the most common cause of action was for rescission, whereby clients sought to cancel their contract claiming EM could not host their event, even though 90% of the clients claiming rescission actually hosted their event at a different location on their original date.

In our opinion, the Powers were victims of the same opportunistic attorneys who tried to profit from the pandemic. If not for their counsel’s advice, we believe the Powers and the other fourteen couples who took legal action would have just held their events as planned, like 85% of the company’s affected clients, or rescheduled for 100% credit at the company’s sole expense without losing anything.

The truth is …

  1. No Client events were cancelled.
  2. Most Clients that filed complaints were fully able to host their event on their original date, which most of them did at another location.
  3. Clients execute multiple non-refundable contracts based on the company’s upfront costs that cannot be recouped, or resold. In the event of cancellation or postponement, clients could reschedule for 25% credit during peak dates, or 50% credit during non peak dates. This is based on the company’s limited dates during the six month season which if taken would result in a total loss for the company.
  4. Clients do not make “deposits”. they make “payments” towards services rendered more than twelve months from their event date that included multiple staff who provided event planning, event design, vendor procurement along with fixed facilities costs for multiple spaces.
  5. The company responded promptly to all arbitration demands, however, most clients attempted to use arbitration rules outside of the parties agreement which increased companies costs by 20x, and significantly reduced its ability to plead its case.

Ongoing Concerns

As a small business, we remain deeply concerned with the ease at which attorney’s can file egregiously false claims and fabricate evidence — judges can ignore established law and the parties agreements — and the media can be bought for a sensational story who knowingly deceive the public to help the favored party win their active court cases.

Small businesses are people too, who work seven days a week and risk it all to fulfill their promises. They deserve the equal protection of the law, and to be fairly reimbursed for their costs incurred on another’s behalf.

Regardless, we apologize to all of our clients for having to draw a hard line during the pandemic. We did so to ensure the fulfillment of nearly 400 client events during an incredibly uncertain time, all of which were fulfilled as agreed.

Respectfully,

Ryan Reedy, Business Manager

Loft 310 is located in the Entertainment District in Downtown Kalamazoo. The property is anchored by the Rosenbaum Building, and includes the former Piano Bar, Monaco Bay, an Irish pub under construction to be named O’Brody’s, Wild Bull, District Square, The Chapel, and Sky Deck.

This article was originally posted on this site.| Also Featured on Axo News

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