United States District Court, M.D. Florida, Tampa Division
VIRGINIA M. HERNANDEZ COVINGTON UNITED STATES DISTRICT JUDGE.
matter comes before the Court pursuant to Defendant Luna
Diversified Enterprises, Inc.'s Motion for Summary
Judgment (Doc. # 46), filed on October 31, 2017. Plaintiff
Premier Gaming Trailers, LLC, responded on November 30, 2017.
(Doc. # 52). Luna filed its reply on December 14, 2017. For
the reasons that follow, the Motion is granted in part and
denied in part as set forth herein.
lawsuit revolves around the submission of a bid for a
contract with the federal government - specifically, a bid to
build mobile gaming kiosks for the Army.
Gaming Trailers is a custom fabricator company that builds
mobile gaming trailers in Tampa, Florida. (Doc. # 1 at ¶
8). Although not registered with the Small Business
Administration (SBA), Premier Gaming is a small company with
fewer than five employees and less than $750, 000 in gross
revenue. (Bekhor Aff. Doc. # 52-5 at ¶ 10; Bekhor Dep.
Doc. # 46-2 at 9:10-20). Lidan Bekhor is the sole owner and
manager of Premier Gaming. (Bekhor Dep. Doc. # 46-2 at
had no experience with government contracts or the federal
bidding process. (Id. at 7:6-11). Thus, he was
unaware of when a federal bid becomes a binding contract and
did not understand small business set-aside contracts or the
Federal Acquisition Regulations (FARS), which govern the
eligibility and requirements for contracting with the federal
government. (Id. at 11:4-16). Premier Gaming never
registered with the federal government's system for award
management, SAM, and had never directly submitted a bid for a
federal contract before. (Id. at 15:7-25). Instead,
on the few occasions Premier Gaming sought to bid on a
federal contract, Premier Gaming “looked to partner
with somebody who is experienced to guide” it through
the process. (Id. at 62:3-12, 58:6-19, 102:4-9).
such entity Premier Gaming trusted to understand federal
contracts was Luna. Luna is a company that provides all types
of merchandise and services to federal and state agencies
exclusively, by submitting bids in response to various
federal and state bid solicitations. (Gina Dep. Doc. # 46-3
at 6:6-7:13). Luna is a small business, registered with and
certified by the SBA, and has between three and five
employees at any given time. (Curry Dec. Doc. # 46-6 at
¶ 1; Curry Dep. Doc. # 46-4 at 6:7-9). Alma Gina, nee
Hoffman, is the sole owner of Luna and maintains the sole
authority to enter binding contracts. (Gina Dep. Doc. # 46-3
at 6:15, 9:15-19, 27:1-10; Curry Dep. Doc. # 46-4 at
10:11-17). Luna's “operations manager, ”
Jason Curry, “manage[d] the day-to-day operations of
the company in terms of [its] contract fulfillments, as well
as internal staff issues, as well as [its] in-house
IT.” (Curry Dep. Doc. # 46-4 at 5:24-6:4).
other Luna employee who figures prominently in this case is
Marcos Morales. Morales works in “solutions
development” for Luna, and his job entails
“getting pricing [from suppliers] and building and
submitting quotes to the customer, which included signing
nonbinding solicitation paperwork.” (Morales Dep. Doc.
# 46-5 at 5:19-23, 41:13-19; Curry Dep. Doc. # 46-4 at
10:18-11:4). According to Curry, Morales' job is
“to find sources of product and get prices, ” and
he can submit bids to contracts “for simplified
acquisitions.” (Curry Dep. Doc. # 46-4 at 10:20-25).
But Morales did not have the authority to make binding
decisions on behalf of Luna, such as entering contracts with
suppliers or customers. (Gina Dep. Doc. # 46-3 at 27:1-10;
Morales Dep. Doc. # 46-5 at 42:19-20, 48:11-19; Curry Dep.
Doc. # 46-4 at 14:23-25, 23:22-23).
although he helped put bids together for government
contracts, Morales had never been trained in the FARS and
stated that he did not understand them. (Morales Dep. Doc. #
46-5 at 50:7-22; Curry Dep. Doc. # 46-4 at 13:24-14:6).
Instead, Morales assumed that the suppliers he contacted
about pricing on potential bids would be aware of their own
eligibility under federal regulations for the bid
opportunities Morales spoke about with them. (Morales Dep.
Doc. # 46-5 at 50:12-22). Still, Morales' lack of
familiarity with these regulations was not an issue because
other Luna employees research the applicability of the FARS
for each contract only after a tentative bid award is issued
to Luna. (Gina Dep. Doc. # 46-3 at 19:11-19; Curry Dep. Doc.
# 46-4 at 8:9-17). This is because a bid is not binding, and
a bidder can decline to enter a contract even if it receives
notice of its bid being selected. (Curry Dec. Doc. # 46-6 at
in August of 2016, Morales contacted Premier Gaming about
other gaming trailer bids, and Luna submitted three bids for
those gaming trailer contracts with Premier Gaming in mind as
a vendor. (Doc. 1-1 at 2; Morales Dep. Doc. # 46-5 at
13:12-14:3; Bekhor Aff. Doc. # 52-5 at ¶ 7). Those three
bids had been for contracts Curry described as
“simplified acquisition” contracts, for which
Morales had authority to submit non-binding bids. (Curry Dep.
Doc. # 46-4 at 10:23-25, 12:15-13:8). Gina was not aware that
Morales had worked with Premier Gaming on the quotes before
submitting these bid proposals, (Gina Dep. Doc. # 46-3 at
27:11-15), perhaps because none of those previous bids had
been awarded to Luna. (Bekhor Dep. Doc. # 46-2 at 25:25-26:5;
Curry Dep. Doc. # 46-4 at 12:15-18).
September of 2016, Bekhor of Premier Gaming contacted Morales
to notify him of the Army's bid solicitation for mobile
gaming kiosks and to begin working on a bid together. (Bekhor
Dep. Doc. # 46-2 at 18:2-12). The gaming kiosks would be used
for marketing and recruitment purposes and were to include,
among other things, a 42-inch television screen, X-Box gaming
systems, and numerous speakers. (Doc. # 49-2 at 15-25).
Although he had no records of any pricing or design research,
Bekhor testified that he called various vendors and suppliers
of metal and electrical parts for pricing around this time,
so that he could come up with a price quote for the bid.
(Bekhor Dep. Doc. # 46-2 at 33:7-35:15). As Bekhor understood
his conversations with Morales, Premier Gaming would produce
one hundred percent of the kiosks and handle delivery, with
Premier Gaming to receive ninety-seven percent of the
contract price and Luna to receive the remaining three
percent. (Id. at 46:3-21, 98:8-11, 99:1-6).
September 26, 2016, Morales signed an “Amendment of
Solicitation/Modification of Contract, ” which included
modifications by the Army to its solicitation for bids for
the gaming kiosks. (Doc. # 50-3 at 14). Gina stated in her
deposition that Morales “would not have
authority” to sign the document, but she was “not
surprised” to see that he had signed because it was
“just a solicitation” that did not “bind
[Luna] to anything” and Gina had been “going
through a lot in that period” of time. (Gina Dep. Doc.
# 46-3 at 48:23-50:13).
Morales emailed a copy of the Army's specifications for
the desired gaming kiosks to Bekhor on September 27, 2016, at
12:05 PM, including the Army's drawings of the proposed
kiosks. (Doc. # 49-2 at 9; Bekhor Dep. Doc. # 46-2 at
30:2-21). About four and a half hours later, an employee of
Premier Gaming sent its bid information to Morales, including
the price Bekhor suggested for the kiosks and specifications
for the kiosks. (Doc. # 50-1 at 1-5; Bekhor Dep. Doc. # 46-2
at 32:5-8, 39:1-7). Bekhor acknowledges that he expended no
money in putting together the bid information. (Bekhor Dep.
Doc. # 46-2 at 41:4-16). The specifications Premier Gaming
sent included numerous deviations from the specifications in
the Army's solicitation, such as including fewer X-Box
consoles than requested, changing the USB connector, phone
charger, and power cord specifications, and increasing the
thickness of the kiosk. (Id. at 51:18-52:21,
72:17-22, 75:24-77:25; Doc. # 50-1 at 4-7).
proposal attached to the email sent from Premier Gaming to
Morales states: “Thank you for taking the time to
consider Premier Gaming  as a potential partner in
producing and manufacturing your proposed customized gaming
units.” (Doc. # 50-1 at 3; Bekhor Dep. Doc. # 46-2 at
39:8-18). Bekhor testified that the “potential
partner” language was standard and used in all such
communications, but that he considered Luna as an actual
partner at that time. (Bekhor Dep. Doc. # 46-2 at
39:11-40:18, 43:15-44:9). Bekhor also acknowledged there was
never a signed contract between Premier Gaming and Luna.
(Id. at 96:12-22). Rather, Bekhor stated that the
alleged joint venture agreement between Premier Gaming and
Luna was an oral contract, as evidenced by Bekhor's
conversations and emails with Morales. (Id. at
each bid for which Bekhor worked with Morales, Bekhor
“underst[ood] that each company was working
together” so that Premier Gaming “would supply
its experience and know how on mobile kiosks and mobile
computer units, and Luna would supply its expertise in
government contract bidding and experience.” (Bekhor
Aff. Doc. # 52-5 at ¶ 7). At no time did Morales
“disclose to [Bekhor] any limitation on the scope of
his authority to enter into binding agreements on Luna's
behalf.” (Id. at ¶ 6). Morales was
Bekhor's only point of contact and Bekhor believed
Morales “also had the authority to engage with and
enter into agreements with both [Premier Gaming] and the
Army” on behalf of Luna. (Id.). Nevertheless,
Bekhor admitted that he was unaware of what position Morales
held with Luna and never asked Morales because “it
didn't make a difference” to him. (Bekhor Dep. Doc.
# 46-2 at 19:20-20:21, 95:18-21).
September 27, 2016, at 5:49 PM, Morales emailed Karyn
Williams with the Army to ask whether the Army allowed
partial invoicing - a question Premier Gaming had. (Doc. #
50-3 at 24). After learning that the Army would allow for
partial invoicing, Morales then emailed Premier Gaming at
7:11 PM, writing “this email is to confirm both Luna
and [Premier Gaming's] acceptance to DUAL CHECK terms for
the project in case of Award.” (Doc. # 1-2 at 2; Doc. #
50-4 at 3). Morales testified that he had no authority to
decide payment terms with a supplier, as payment terms have
to be approved by Gina. (Morales Dep. Doc. # 46-5 at
16:15-17:15). Rather, he acknowledged that he was very busy
with various bids in September, which is the end of the
fiscal year, and “spoke out of place” regarding
the dual check terms. (Id. at 16:18-17:5). And,
indeed, payment via dual checks was unavailable under the
contract because the federal government “doesn't
allow for dual checks, ” and the solicitation instead
provided for payment “by electronic fund
transfer.” (Curry Dep. Doc. # 46-4 at 32:5-10, 33:1-3;
Bekhor Dep. Doc. # 46-2 at 68:6-15).
Bekhor testified in his deposition, no other conversations
between Bekhor and Morales took place about “profit,
expenses, [or] loss.” (Bekhor Dep. Doc. # 46-2 at
21:12-24). Yet, in his affidavit, Bekhor asserts Premier
Gaming and Luna “agreed that the parties would each
share in the profit or loss from their collaborative effort
to obtain and perform the contract.” (Bekhor Aff. Doc.
# 52-5 at ¶ 7).
that night, September 27, 2016, Morales went ahead and
submitted the bid using the information provided by Premier
Gaming. (Morales Dep. Doc. # 46-5 at 28:3-29:2; Doc. # 50-3
at 25; Doc. # 50-1 at 6-25). Morales' name and title are
listed in the “Name and Title of Signer” box on
the bid solicitation form, Standard Form 1449. (Doc. # 50-1
at 12). Gina stated that, at some unspecified time, she had
given Morales permission to submit a bid for the Army's
solicitation but was unaware that Premier Gaming was the
vendor from which Morales had received the price quote. (Gina
Dep. Doc. # 46-3 at 16:6-17:25).
his deposition, Bekhor could not clearly articulate any false
statements made by Morales, or anyone else at Luna, before
the bid was submitted to the Army. (Bekhor Dep. Doc. # 46-2
at 82:20-83:20). Nevertheless, Bekhor stated that he and
Morales agreed the bid using Premier Gaming's bid
information was “the only bid” and
“[s]hould it be awarded, [Premier Gaming] was going to
be the supplier.” (Id. at 89:4-6). And, in his
affidavit, Bekhor states “[Premier Gaming] would not
have expended the time and effort in creating the Bid
Information and would not have provided the same to Luna had
Luna not misrepresented to [Premier Gaming] that [Premier
Gaming] would supply the Units in the event Luna was the
successful bidder on the Solicitation.” (Bekhor Aff.
Doc. # 52-5 at ¶ 12).
next day, September 28, 2016, Morales was contacted by
Williams, who requested that Luna provide a “drawn
concept with measurements and descriptions that represent the
final product” with its bid. (Doc. # 50-4 at 6).
Morales wrote back to Williams, stating “According to
our supplier, he will have [the drawings] to me in the next
30 min[utes].” (Id.). During his deposition,
Morales testified that “our supplier” was
“a poor choice of words on [his] part.” (Morales
Dep. Doc. # 46-5 at 35:13-19).
Morales emailed Bekhor asking Premier Gaming to provide a
drawing very quickly. (Doc. # 50-4 at 1-2). An employee of
Premier Gaming emailed Morales back with a drawing of the
proposed gaming kiosks about twenty minutes later. (Bekhor
Dep. Doc. # 46-2 at 85:25-86:11; Doc. # 50-4 at 1-5). The
drawing provided by Bekhor is “very similar” to
the drawing provided by the Army in its solicitation, except
that the kiosk is marked with Premier Gaming's logo in
the corner of the image. (Morales Dep. Doc. # 46-5 at
54:16-56:6; Bekhor Dep. Doc. # 46-2 at 85:21-86:3; Doc. #
50-4 at 4-5). Morales then emailed the drawing provided by
Premier Gaming to Williams. (Doc. # 50-4 at 8).
Morales was in contact with Premier Gaming and putting
together the bid, he was unaware that Curry was already
speaking to potential suppliers about the gaming kiosks in
order to put together a different bid for the Army contract.
(Morales Dep. Doc. # 46-5 at 37:3-12; Curry Dep. Doc. # 46-4
at 18:8-20:2). Although the previous gaming trailer bids had
been “simplified acquisitions, ” Curry stated the
Army solicitation was not a simplified acquisition because
“it [was] a design-build service.” (Curry Dep.
Doc. # 46-4 at 11:9-14). Morales' job did not entail
submitting bids for more complex contracts, only simplified
acquisitions. (Id. at 11:1-4).
speaking to various suppliers, Curry had done a cost
calculation for what the Army kiosks would cost Luna to build
and had drawn rough “sketch-ups” for the gaming
kiosks according to the Army's specifications. (Curry
Dep. Doc. # 46-4 at 18:8-20:2, 20:22-21:2). Curry passed that
number along to Luna's sometimes-sales representative,
Carlos Colon, who was supposed to factor in a mark-up to
ensure Luna would profit if it was ultimately awarded the
contract. (Id. at 6:14-21, 19:23-20:3, 29:23-30:4,
59:9-16). Curry was under the impression that Colon would add
in the mark-up and then Morales would submit Curry's bid
proposal to the Army. (Id. at 60:4-23). Indeed, at
that time, Curry was under the impression that the bid
proposal he drafted was submitted and was the one selected by
the Army. (Id. at 25:9-12, 26:20-25, 33:11-13).
Curry was unaware that Morales had been preparing a separate
bid with Premier Gaming in mind as the supplier.
(Id. at 50:12-17).
September 30, 2016, the Army notified Luna that its bid had
been selected, thereby triggering the 72-hour period in which
Luna could review the FARS and other related documents before
signing a binding contract with the Army. (Doc. # 50-4 at 13;
Curry Dec. Doc. # 46-6 at ¶ 2). Again, this 72-hour
period exists because a bid is not binding - a bidder can
decline to enter a contract even if it receives notice of its
bid proposal being selected. (Curry Dec. Doc. # 46-6 at
September 30, 2016, Gina, on behalf of Luna, signed a federal
Standard Form 1449, accepting the Army's specifications,
as a binding contract with a total award of $1, 233, 178.48.
(Doc. # 51-1 at 2-3). “None of the contract deviations
from [the Army's specifications] that were in [Premier
Gaming's] proposal were in this contract.” (Curry
Dec. Doc. # 46-6 at ¶ 2; Curry Dep. Doc. # 46-4 at
29:16-22). “The schematic diagrams [Luna] used to
produce these kiosks were costly CAD drawings, not anything
[Premier Gaming]” created for the bid proposal. (Curry
Dec. Doc. # 46-6 at ¶ 4). But the price from the bid
submitted to the Army did remain the same for the final
contract. (Doc. # 51-1 at 2-3; Doc. # 50-1 at 7).
after the Army selected Luna's bid, Morales informed
Curry that he had spoken with Premier Gaming about being the
supplier of all work on the gaming kiosks, which was the
typical division of labor for simplified acquisition
contracts. (Curry Dep. Doc. # 46-4 at 23:2-24:3, 50:18-51:2,
53:16-19, 58:1-7). But the Army's bid solicitation had a
small business set-aside, which required that the contract be
awarded to and at least fifty percent of the work be provided
by a certified small business, like Luna. (Gina Dep. Doc. #
46-3 at 56:12-57:1; Curry Dep. Doc. # 46-4 at 44:6-12).
Bekhor was waiting to hear back from Luna about the Army bid.
He grew impatient after numerous calls to Morales went
unanswered over the weeks, so Bekhor called the Army sometime
in October of 2016 and learned the contract had been awarded
to Luna. (Bekhor Dep. Doc. # 46-2 at 23:8-24:9). Bekhor then
called Luna and Curry answered the phone. During the tense
conversation that ensued, Curry informed Bekhor that Luna had
been awarded the Army contract but that Premier Gaming would
not be the supplier of the gaming kiosks. (Id. at
23:8-24:25; Curry Dep. Doc. # 46-4 at 45:11-46:2).
October 28, 2016, counsel for Premier Gaming sent Gina a
demand letter, demanding “a single payment of $300, 000
in full satisfaction of all claims against” Luna. (Doc.
# 52-7 at 15-16). Curry testified that Gina approved him
reaching out to an attorney to respond to Premier
Gaming's demand letter. (Curry Dep. Doc. # 46-4 at
55:22-56:8). But Gina stated that she alone had authority to
hire an attorney for Luna and did not remember authorizing
Curry to do so. (Gina Dep. Doc. # 46-3 at 35:15-37:6).
Gaming initiated this action on December 9, 2016, asserting
claims for breach of joint venture agreement (Count I),
unjust enrichment (Count II), fraud in the inducement (Count
III), and conversion (Count IV). (Doc. # 1). Luna filed its
Answer on March 27, 2017. (Doc. # 20). At the Court's
direction, the parties mediated on September 7, 2017, but met
an impasse. (Doc. ## 39, 41).
Luna moves for summary judgment on all claims. (Doc. # 46).
Premier Gaming filed a response, (Doc. # 52), and Luna