Innovation Ventures, LLC v. Liquid Manufacturing, LLC (Opinion - Leave Granted)Annotate this Case
In 2007, plaintiff Innovation Ventures, LLC engaged defendants Andrew Krause and K & L Development of Michigan (K & L Development) to design, manufacture, and install manufacturing and packaging equipment for the production of "5-Hour ENERGY" at Liquid Manufacturing’s bottling plant. The issue this case presented for the Michigan Supreme Court's review centered on whether agreements between sophisticated businesses were void for failure of consideration and whether the noncompete provisions in these agreements were reasonable. Innovation Ventures alleged a variety of tort and breach of contract claims against Liquid Manufacturing, LLC, K & L Development of Michigan, LLC, Eternal Energy, LLC, LXR Biotech, LLC, Peter Paisley, and Andrew Krause based on the defendants’ production of Eternal Energy and other energy drinks. Contrary to the determination of the Court of Appeals, the Supreme Court concluded that the parties’ Equipment Manufacturing and Installation Agreement (EMI) and Nondisclosure Agreement were not void for failure of consideration. The Court nevertheless affirmed the trial court’s grant of summary judgment to defendants for the claims against Krause, because there was no genuine issue of material fact on the question whether Krause breached the EMI or the Nondisclosure Agreement. Likewise, there was no issue on the question whether K & L Development breached the EMI. The Court concluded the Court of Appeals erred in failing to evaluate the noncompete provision in the parties’ Termination Agreement for reasonableness. The Court therefore reversed in part, affirmed in part, and remanded for consideration of those questions of fact remaining regarding whether K & L Development breached the Nondisclosure Agreement and whether Liquid Manufacturing breached the Termination Agreement with respect to its production of products other than Eternal Energy.