NO.

JD~ lltl\-65
MULTI RESTAURANTS §
CONCEPTS, LTD., CHAMPPS DFW §
JOINT VENTURE, ASC STAR I, §
LTD., and TEAM JOINT VENTURE, §
§
Plaintiffs, §
§
14th @
JUDICIAL DISTRICT
v. §
§
DFW INTERNATIONAL AIRPORT §
BOARD, §
§
Defendant § DALLAS COUNTY, TEXAS

VERIFIED APPLICATION FOR A TEMPORARY RESTRAINING ORDER

TO THE HONORABLE JUDGE OF SAID COURT:

Pursuant to Texas Rule of Civil Procedure 680, MultiRestaurants Concepts, Ltd.,

Champps DFW Joint Venture, ASC Star I, Ltd., and Team Joint Venture ("Plaintiffs" or

"MultiRestaurants"), file their Verified Application for a Temporary Restraining Order,

against Defendant the DFW International Airport Board, as follows:

I.
STATEMENT OF FACTS AND PROCEDURAL BACKGROUND

1. In 1996, MultiRestaurants and Team Joint Venture contracted with the

Dallas/Fort Worth International Airport Board for the operation of food and beverage

concessions at DFW Airport (the "Airport") by various concession agreements. Article

2, of the original concession defines gross receipts as follows:

3. "GROSS RECEIPTS" shall include all monies paid or payable to the

Concessionaire fat sales made and for services rendered at or from the Premised,
regardless of when or where the order therefore is received, and at the option of
the Board, outside the Premised, if the order therefore is received at the Premises,
and any other revenues of any tyPe arising out of or in connection with the
Concessionaire's operations at the Premises, including, but not limited to , those

APPLICATION FOR TEMPORARY RESTRAINING RELIEF 1

ORIGINAL
 operations of the Concessionaries' agents or sub lessees, arising from any sales
made or services rendered at or from the Premises, provided, however, that Gross
Receipts shall not include:
A. Any taxes imposed by law which are separately stated to and paid by a
customer and directly payable to the taxing authority by the
Concessionaire, and alcoholic beverage taxes collected for remittance to
the taxing authority from the retail sale ofalcoholic beverages.

(emphasis added). A true and correct copy of the excerpted concession agreement is

attached to the Appendix in Support of this Application ("App.") at pages 7-35.

2. In and around August 2005, extensions of the concessions were executed.

between the Board and MultiRestaurants, Team Joint Venture. Article 4, Section 4.01 of

the concession agreements define gross receipts as follows:

"GROSS RECEIPTS", sometimes called Gross Revenues and/or Gross Sales,

shall include all monies paid or payable to Concessionaire for sales made and for services
rendered at or from the Premises, regardless of when or where the order therefore is
received, and at the option of the Board, outside the Premises, if the order therefore is
received at the Premises and any other revenues of any type arising out of or in
connection with Concessionaire's operations at the Premises including, but not limit to,
those operations of Concessionaire's agents or sublessees, arising from any sales made or
.services rendered at or from the Premises, provided, however, that Gross Receipts shall
not include:
1. Any taxes imposed by law which are separately stated to and paid by a
customer and directly payable to the taxing authority by Concessionaire.

Champps and Star also executed a 2005 Concession with the Board. A true and correct

copy of the excerpts from the concession agreement is attached to the Appendix in

Support of this Application at App. 47-96.

3. Plaintiffs did not intend Gross Receipts in the 2005 Concessions to include

alcoholic beverage taxes remitted to the taxing authority by the Concessionaire; as such, a

scrivener's error occurred in the drafting of the concessions. See Affidavit of Gilbert

Aranza, App. at 130-137. Indeed, from 1996 through March, 2010, the Board never

asserted that Gross Receipts included alcoholic beverage taxes remitted to the taxing

APPLICATION FOR TEMPORARY RESTRAINING RELIEF 2

authority by concessionaires. See Aranza Affidavit - App. 138. The Airport knew as .

early as January 2010, that other Texas airports did not collect such taxes as rent but that

they were excluded from the definition of gross sales. App. at 97-111 (Defendant staff

emails dated January 2010).

4. By letter dated April 29, 2010, Zenola Campbell, Vice President of Airport

Concessions, sent Plaintiffs (and other concessionaires) a letter demanding paYment of

past due'rents, inclusive of Texas Alcohol and Beverage taxes ('.'TABC taxes"), based on

the "Board's position that rent calculations be based on the gross receipts inclusive of

TABC taxes as stipulated in the terms of the concession." App. 5-6 (letter from Z.

Campbell). Plaintiffs were informed further that "it is the position of the Board that any

past rents paid based on the net sales calculation be recalculated and the difference be

submitted to our Finance Department no later than June 11, 2010." Id. This was the first

such notification to Plaintiffs of the Board's intent to collect such amounts. Aranza Aff.,

App. 131. It basically amounts to collecting "rent" on an excise tax.

5. On May 12, 2010, Ken Buchanan, Executive Vice President, Revenue

Management for the Airport, met with Gilbert Aranza, representative of

MultiRestaurants, to discuss the TABC tax issue. Aranza Aff. App. 132. At that

meeting, Mr. Buchanan told Mr. Aranza that he had personally researched the issue with

TABC officials, the Texas Comptroller's office, other Texas airports, and other Texas

State officials and concluded that both the Airport's auditor and counsel were incorrect in

their position that the additional "rent" was owed. Id. Mr. Buchanan had been provided

with the Affidavit of Pat Gleason - the former Vice President of Airport Concessions

who had supervisory control over the administration of the concessions contracts - and

APPLICATION FOR TEMPORARY RESTRAINING RELIEF 3

asked for letters on the issue fron1 Brinker Intemational,franchisor and owner/operator of

over 1,000 Chili's,. Magianos and On the Border restaurants, with hundreds of locations

in Texas, CRO franchise owner/operator of over 100 Cool River and Cantina Laredo

restaurants among other brands, and Herb Weitzman, commercial real estate agent. See

Aranza Aff.- App. 133 and App. at 44-46 (Gleason Affidavit) and App. at 36-43 (various

letters). He asked that Mr. Aranza refrain from "sending in the nukes" while he

persuaded Jeff Fegan, Airport CEO, and the Board to drop the issue. App. 133.

6. On May 17, 2010, Mr. Buchanan shared the same views with Steve Johnson

and Anthony Alessi of HMS Host who had made it clear that they agreed with Aranza's

position that the amounts were not owed. App. at 112 -121 (emails between HMS Host

and Airport); Aranza Aff. - App. at 134. Mr. Aranza, Plaintiffs, and HMS Host refrained

from immediate action consistent with Mr. Buchanan's request. Id. It was clear that

most of the concessionaires disagreed with the Airport's position as acknowledged in the

Airport's own email correspondence. See App. at 122-125 (email from Robert Darby

acknowledging that the alleged amounts owed "go back a number of years [and that]

concessionaires want the Board to forgive the past amounts owed and not collect in the

future.").

7. Sometime between May 17, 2010 and June 1, 2010, however, when the

concessions committee of the Board met, the Board, Mr. Paul Tomme (Airport counsel)

and Mr. Fegan apparently rejected Ken Buchanan's position and convinced the

committee to continue to pursue collection of the TABC taxes as "rent." Upon

information and belief, the Board was informed erroneously that other airports in Texas

did collect TABC taxes as rent from concessionaires, something the Airport knew in

APPLICATION FOR TEMPORARY RESTRAINING RELIEF 4

January 2010 was not true. App. at. This was confirmed once more in Airport emails in

and around June 2010. App. at 97-111 (Airport emails containing excerpts from Texas

airports excluding TABC taxes from the definition of gross receipts).

8. By letter dated June 15, 2010, Plaintiffs informed the Board that failure to

exclude TABC taxes was a mutual mistake between Plaintiffs and the Board. See App. at

1-46 (letter dated June 15 to Board). If not a mutual mistake, at a minimum, there is a

unilateral mistake by Plaintiffs, accompanied by other inequitable .conduct on the part of

the Board, requiring reformation of the concession contracts in equity to conform to the

parties' true agreement that excluded TABC taxes from payment as "rent." Id. The

Board was given the Pat Gleason Affidavit. Id.. Mr. Gleason was Vice President of

Airport Concessions in 2004 when the new concession contract was drafted. Id. He

agreed with Plaintiffs' position. Id. Despite the Affidavit, the Board continues to press

for payment. Plaintiffs have made many efforts to resolve this matter with the Airport.

Aranza Aff. at App. 137.

9. Curiously, at the same time the TABC tax collection issue was heating up

between the Board and concessionaires, issues were coming to a head on Gilbert

Aranza's concessions at Dallas Love Field Airport. App. at 136. Emails produced by the

Airport to Plaintiffs pursuant to an open records act request reveal Mayor Leppert's

preoccupation with any possible related issues regarding Mr. Aranza's concession

contracts at both airports. It appears from the emails that Mayor Leppert and his City

Hall staff made frequent inquiries in June and July 2010 regarding Mr. Aranza's

concessions contracts at DFW. App. at 122-125. At one point, Mr. Buchanan

APPLICATION FOR TEMPORARY RESTRAINING RELIEF 5

admonished Airport staff that it needed to avoid getting side tracked by the issues at Love

Field. App. at Id.

9. By letter dated July 19, 2010, Plaintiffs infonned the Board that they would

invoke section 4.03 of the Concession which provides that

"in the event of a dispute as to the amount to be paid [as rent], the Board shall
accept the sum tendered without prejudice and, if a deficiency is detennined to
exist, the Late Payment Charge shall apply only to the deficiency."

App. at 50 (Concession at Section 4.0.3 Schedule of Charges); App. at 126-129 (letter

dated July 19 to the Board). Plaintiffs take the position that there is no deficiency,

dispute the amount owed as purported "rent" and that the Board, while accepting the

amount that Plaintiffs have tendered, has not done so without prejudice to Plaintiffs'

rights while the dispute is resolved. Id. and Aranza Aff. at App. 136. Specifically,

Plaintiffs are poised to receive earned bonus points which are critical to future requests

for proposals at the Airport. Aranza Aff. - App. 136. Counsel for the Board has stated

that the Board will not award the earned bonus points to Plaintiffs due to the dispute over

the concession contract tenns. App. (letter dated Oct. 7, 2010 from P. Tomme to

Plaintiffs).

10. The Airport issued Requests for Proposal for Tenninal A on September 22,

2010. App. at 137. The Board has stated that any proposer with any unresolved claims

with the Airport will be disqualified.

11. Curiously, the draft concession for Tenninal A included in the September 22,

2010 request for proposals' provides that a concessionaire may deduct Mixed Beverage

Taxes from Gross Sales in detennining rent due to the Board. Aranza Aff.

APPLICATION FOR TEMPORARY RESTRAINING RELIEF 6

 12. On November 2, 2010, the Concessions Committee of the Board voted to

move forward with termination of Plaintiffs' concessions contracts. App. at 137 and 138

Aranza Aff. The Board meets on November 4, 2010, at which time the Plaintiffs'

concessions are likely to be terminated despite disputed fact issues. Id.

II.
ARGUMENTS & AUTHORITIES

A. The Standard for a Temporary Restraining Order/ Temporary

. Injunction.

An applicant is entitled to an injunction pursuant to the provisions of §65.011

Tex.Civ.Prac.& Rem. Code which provides that a writ of injunction may be granted if:

(1) the applicant is entitled to the relief demanded and all or part of the
relief requires the restraint of some act prejudicial to the applicant; (2) a
party performs or is about to perform or is procuring or allowing the
performance of an act relating to the subject of pending litigation, in
violation of the rights of the applicant, and the act would tend to render the
judgment in that litigation ineffectual; (3) the applicant is entitled to a writ
of injunction under the principles of equity and the statutes of this state
relating to injunctions; (4) a cloud would be placed on the title of real
property being sold under an execution against a party having no interest
in the real property subject to execution at the time of sale, irrespective of
any remedy at law; or (5) irreparable injury to real or personal property is
threatened, irrespective of any remedy at law.

A Temporary Restraining Order is warranted where the applicant has

shown that it has a probable injury, that harm is imminent and that if the

injunction is not issued, the harm will be irreparable. Town of Palm Valley v.

Johnson, 87 S.W.3d 110, 111 (Tex. 2001). The applicant must also show that

there is no adequate remedy at law. Id.

B. Plaintiffs are entitled to a Temporary Restraining Order and

Temporary Injunctive Relief.

1. The Last, Peaceable Status

APPLICATION FOR TEMPORARY RESTRAINING RELIEF 7

 An injunction is necessary in this case to assure the orderly administration of

justice, protect the Plaintiffs' contract rights and to preserve the subject matter of this suit

until it is resolved. The status quo is the last actual, peaceable, uncontested status that

preceded the controversy. In Re Newton, 146 S.W.3d 648, 651 (Tex. 2004). Here, the

last peaceable non contested status was that the TABC taxes were not being collected as

rent and Plaintiffs' concessions at the Airport were not under threat of tennination for

non payment of the taxes. This status should be preserved during the pendency of this.

case on the merits.

2. Plaintiffs will suffer probable imminent, irreparable injury for which

there is no adequate remedy at law.

Absent an injunction, the concessions between Plaintiffs and the Board may be

terminated by the Board on November 4, 2010. The Board is likely to vote to terminate

the concessions and Plaintiffs will be removed from DFW Airport. If Plaintiffs' are

wrongfully terminated and the Board proceeds with wrongfully removing Plaintiffs from

the concession spaces, they will suffer irreparable harm to their reputation as

concessionaires at the Airport and in the industry. An injunction is necessary to prevent

such irreparable harm. Plaintiffs can not be adequately compensated by money damages

because once they are removed from the concession space and new entities move in with

concession contracts, Plaintiffs will be prohibited from moving back in.

III.
CONCLUSION AND REQUEST FOR RELIEF

For all of the foregoing reasons, Plaintiffs request that the Court enter a

Temporary Restraining Order and upon full evidentiary hearing, Temporary Injunction,

that the DFW International Airport Board, be enjoined, restrained and prohibited from

APPLICATION FOR TEMPORARY RESTRAINING RELIEF 8

terminating the Plaintiffs' concessions with the Board pending resolution of the merits of

Plaintiffs' cause of action against the Board.

RESPECTFULLY S

By: sf Eliz . a schuch

Elizabeth A. Han(~_p---"~
State Bar No. 08903950
Linda M. Dedman
State Bar No. 24007098
Floyd Clardy, of counsel
State Bar No. 04268010
202 High Point Centre
12225 Greenville Avenue
Dallas, Texas 75243
(214) 361-8885 (telephone)
(214) 363-4902 (facsimile)
ATTORNEYS FOR PLAINTIFF

CERTIFICATE OF CONFERENCE

I hereby certify that I spoke with Paul Tomme, counsel for the Board on

November 2 and 3, 2010 regarding the relief requested herein and was informed that he

opposed the requested relief on behalf of the Airport.

sf Elizabeth A. Handschuc
Elizabeth A. Handschuch

CERTIFICATE OF SERVICE

I hereby certify that I served a copy of the above and foregoing Application upon

sf Elizabeth A. Handschuch
Elizabeth A. Handschuch

APPLICATION FOR TEMPORARY RESTRAINING RELIEF 9

 FIAT

Plaintiffs' Emergency Request for Temporary Restraining Order is set for hearing

on , 2010 at _ am/pm. Signed this _ day of , 2010.

Presiding Judge

APPLICATION FOR TEMPORARY RESTRAINING RELIEF 10