Kittery Foreside, LLC v. Livingston

STATE OF MAINE BUSINESS & CONSUMER DOCKET
CUMBERLAND, ss. LOCATION: PORTLAND
DOCKET NO. BCD-CV-19-22

KITTERY FORESIDE, LLC, )
)
Plaintiff )
)
v. ) ORDER GRANTING IN PART AND
) DENYING IN PART MOTION FOR
DONALD A. LIVINGSTON, ) PRELIMINARY INJUNCTION
ET AL., )
)
Defendants )

Plaintiff Kittery Foreside, LLC (“Kittery Foreside”) filed a Complaint for breach

of contract, and now moves for a preliminary order enjoining Defendants Donald A.

Livingston (“Livingston”), Donna Ryan (“Ryan”), 1828 Pepperrell Cove LLC

(“Pepperrell Cove”), and 1828 Bistro at Pepperrell Cove, LLC (“1828 Bistro”) from

violating a non-compete clause and operating Bistro 1828 restaurant. For the reasons

discussed below, the Court grants the motion with regard to Livingston, but

otherwise denies the motion with regard to the remaining Defendants.

FACTS

Kittery Foreside owns and operates a restaurant named Anneke Jans in

Kittery, Maine. The restaurant was previously owned by Anneke Jans, LLC. Livingston

was a member of Anneke Jans, LLC. Livingston and Ryan are married, and operated

the Anneke Jans restaurant together.

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In October 2010, Kittery Foreside was formed to purchase the assets of

Anneke Jans. Jason Canty is the sole member of Kittery Foreside. On October 8, 2010,

Anneke Jans, LLC and Livingston, as sellers, and Kittery Foreside and Canty, as buyers,

entered into a Purchase and Sale Agreement for all of the material assets of the

Anneke Jans restaurant. There were no other signatories or parties to the Purchase

and Sale Agreement.

The Purchase and Sale Agreement contains a non-compete clause. The clause

provides in relevant part as follows:

9. NON-COMPETE; NON-SOLICITATION.
(a) Subject only to the Excluded Business as
defined in Section 9(b) below, the Sellers, the Seller’s
wife, and their respective Affiliates shall not, for a period
of ten years from the Closing Date (the “Non-Compete
Period”), directly or indirectly, whether independent or
in association with a another entity: own, manage,
operate, join, control, be employed when an executive,
managerial or supervisory capacity by, or participate in
or be connected with, loan money to, sell or lease
equipment to more allow their skill, knowledge,
experience or reputation to be used in connection with
any business that competes directly or indirectly with
any of the activities of Seller in existence as of the date
this Agreement or the Closing Date, within Kittery, Maine
and fifteen miles of Kittery, Maine. For purposes of this
Section 9(a), “participate” includes any direct or indirect
interest in any enterprise, whether as a stockholder,
partner, joint venture or otherwise or rendering any
direct or indirect service or assistance (including as a
creditor for money borrowed) to any entity or person.
Sellers and each of their Affiliates agree that this
covenant is reasonably designed to protect Buyers
substantial investment in the business it is reasonable
with regard to its duration, geographic area and scope.
***
(e) Sellers acknowledge that the restrictions
under this Section constitute a material inducement to
Buyers’ entering into and performing this Agreement,
further acknowledge, stipulate and agree that a breach of

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any of the respective several obligations and agreements
set forth in this Section will result in irreparable harm
and continuing damage to Buyer for which there will be
no adequate remedy at law and further agree that in the
event of any breach of said obligations and agreements,
Buyer and its successors and assigns will be entitled to
injunctive relief into such other relief as is proper under
the circumstances.

In 2018, Livingston participated in the Pepperrell Cove Group (the “Group”),

an unincorporated group of entrepreneurs1 who (through various companies) own

and operate restaurants in Kittery, Maine, including Frisbee’s Wharf and Bistro 1828.

Livingston was introduced to employees as an owner of the Group. On a daily basis,

Livingston was integrally involved in the operation of restaurants affiliated with the

Group. Employees of the restaurants provided Livingston with meals at no charge as

an owner comp. Livingston met with employees of the restaurants to request that

they sign nondisclosure agreements. The restaurants affiliated with the Group

compete with Anneke Jans.

ANALYSIS

In order to prevail on a motion for preliminary injunction, the moving party

must show (1) that the plaintiff will suffer the irreparable injury in the absence of

injunctive relief; (2) that the injury to plaintiff outweighs any harm which granting

injunctive relief would inflict on the defendant, (3) that the plaintiff have

demonstrated a likelihood of success on the merits (at most, probability; at least, a

substantial possibility); and (4) that the public interest would not be adversely

1 The parties spar over the legal status of the Group, but it is undisputed that the Group was not a

party to the Purchase and Sale Agreement, and so the Court does not need to weigh in on the dispute
at this juncture.

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affected by granting the injunction. Bangor Historic Track Inc. v. Department of

Agriculture, 2003 ME 140, ¶ 9, 837 A.2d 129; Ingraham v. University of Maine, 441

A.2d 691, 693 (Me. 1982). In this case, Kittery Foreside has made the necessary

showing with regard to Livingston, but not with regard to the other Defendants.

The Court starts its analysis with the question of success on the merits. Livingston was a party to and

signed the Purchase and Sale Agreement in October 2010. In the context of the

Purchase and Sale agreement, a ten year noncompete, geographically applicable to

the town of Kittery, Maine, and designed to protect the business of the buyer from

competition from the sellers, is reasonable in scope, duration, and interest to be

protected. Within the ten year noncompete period, Livingston became integrally

involved with the Group and the restaurants affiliated with the Group. The

restaurants affiliated with the Group compete with Anneke Jans. Livingston therefore

the violated the prohibition against participating directly or indirectly with any

competing business or enterprise. Accordingly, Kittery Foreside has demonstrated a

probability of success on the merits against Livingston.

Kittery Foreside also seeks to enjoin Ryan, Pepperrell Cove, and 1828 Bistro.

However, Ryan, Pepperrell Cove, and 1828 Bistro are not parties to the Purchase and

Sale Agreement, and are therefore not bound by the noncompete clause contained in

Agreement. Kittery Foreside argues that Ryan is nevertheless bound by the

Agreement, because Ryan is married to Livingston, and the text of the noncompete

clause explicitly applies to “Seller’s wife.” However, Ryan did not sign the Purchase

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and Sale Agreement, and was not made a party to the Agreement. 2 Kittery Foreside

further argues that because Ryan was a member of Anneke Jans, LLC,3 and Anneke

Jans, LLC was a party to the Agreement, that Ryan is bound by the Agreement.

However, under Maine law “[a] limited liability company is an entity distinct from its

members.” 31 M.R.S. § 1504(1). Hence, Ryan did not become an individual party to

the Purchase and Sale Agreement simply because the limited liability company in

which she may have been a member executed the Agreement. As a result, Kittery

Foreside has not shown a likelihood of success on its breach of contract claims against

Ryan, Pepperrell Cove and 1828 Bistro. 4

Next, Kittery Foreside has satisfied its burden to show irreparable injury in the

absence of injunctive relief against Livingston. In the Purchase and Sale Agreement

itself, Livingston explicitly acknowledged his violation of the Agreement would

“result in irreparable harm and continuing damage to Buyer for which there will be

no adequate remedy at law and [he] further agree[s] that in the event of any breach

of said obligations and agreements, Buyer and its successors and assigns will be

entitled to injunctive relief.” In the context of a Purchase and Sale Agreement, the

Court will not now entertain Livingston’s remonstrations to the contrary. Moreover,

2 Kittery Foreside’s motion is primarily aimed at Ryan, and Kittery Foreside offers substantial

evidence of Ryan’s involvement in a competing restaurant. Because the Court finds that Ryan is not
contractually bound by the Purchase and Sale Agreement, the Court declines to make any fact
findings with regard to Ryan. And because the Court has found the merits-of-success criteria is
otherwise satisfied with regard to Livingston, the Court does not address whether, as a party and
signatory to the Purchase and Sale Agreement, Livingston has any contractual responsibility to
ensure “Seller’s wife” complies with the noncompete clause.
3 The Court notes that Kittery Foreside has not established that Ryan was a member of Anneke Jan,

LLC.
4 Because Kittery Foreside has failed to satisfy this criterium with regard to Ryan, Pepperrell Cove,

and 1828 Bistro, there is no need for the Court to review the other preliminary injunction criteria
with regard to these three Defendants.

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under the facts presented, the Court finds that by providing his skill, knowledge,

experience, and reputation to the Group and the restaurants affiliated with the Group,

in contravention of his Agreement not to, Livingston has irreparably damaged Kittery

Foreside and there is no adequate remedy at law.

Finally, Kittery Foreside easily carries its burden with regard to the final two

preliminary injunction criteria. Livingston bargained for a ten year noncompete

prohibiting him from participating in competing businesses. Whatever harm befalls

Livingston from an injunction, the harm was brought on by Livingston himself, and is

outweighed by the harm to Kittery Foreside. And because Livingston entered into a

reasonable noncompete in connection with the purchase and sale of assets, the public

interest will not be adversely affected by granting the injunction.

CONCLUSION

For all of these reasons, the Court GRANTS Kittery Foreside’s motion for

preliminary injunction with regard to Livingston. Livingston is enjoined from

participation in or involvement with the Group and any restaurants affiliated with the

Group, along with any other business that compete with Anneke Jans. The Court

DENIES Kittery Foreside’s motion for preliminary injunction with regard to Ryan,

Pepperrell Cove, and 1828 Bistro.

SO ORDERED. Pursuant to M.R. Civ. P. 79(a), the Clerk is instructed to

incorporate this Order by reference on the docket for this case.

May 20, 2019.

______/s_______________________
Michael A. Duddy
Judge, Business and Consumer Docket

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