Appeals Court Upholds Dismissal Of Beach Group’s Suit Against City

WILDWOOD – A state Appeals Court has upheld a decision to dismiss a lawsuit from a group formed to run Wildwood’s beach concession. 
At one time, Michael L. McDonald and his organization Point Break Group were set to reinvigorate Wildwood, with concerts, an RV park, bars and more on the city’s expansive beaches.
Before long, the city and the contractor were trading lawsuits alleging breach of contract and more.
In June 2012, Point Break Group management alleged in a lawsuit that the city prevented the group from abiding by its contract to offer beach concerts, surf lessons, and other concessions.
That summer, according to court records, the group made about $5,000 from a surfing school, while members argued that the businesses could have brought in more than $27.6 million in total, which would have meant more than $12 million in profits for Point Break.
In August 2017, a court dismissed the suit at Wildwood’s request. In a September ruling, the appellate division of Superior Court Judges Amy O’Connor and Patrick DeAlmeida upheld that dismissal, in part stating that the plaintiff could not hope to prove how much, if any, revenue was lost.
“Here, plaintiff cannot show lost profits with any reasonable certainty,” the judges wrote in the ruling.
“Plaintiff was not an established business or an extension of a previous one. Plaintiff was formed to engage in a new venture in Wildwood.
“Although plaintiff’s members may have had some experience in providing the events and activities plaintiff hoped to bring to Wildwood, they had not done so before in this location – a new market,” the ruling continues. “Plaintiff had no longstanding customers or promoters to whom it could turn to guarantee business.”
Part of the lost revenues related to license fees from vendors, according to the opinion, which stated that the members of Point Break relied on opinions to make their revenue projections, without direct or specific knowledge about how much could be earned.
One element of the plan included a surfing school to be run by Ian Cairns, which would also rent stand up paddleboards and provide other beach amenities.
According to the appellate division opinion, that was expected to bring in more than $12 million over the summers between 2013 and 2017.
“However, significantly, during his deposition, Cairns admitted the origin of such projections were the result of a meeting in which the principals gathered to ‘think about those (matters) deeply,’” reads the opinion, conceding that the projections were only estimates.
Point Break had also filed a federal suit under the Racketeer Influenced and Corrupt Organizations Act, a piece of 1970s legislation aimed at organized crime. That suit was withdrawn in 2015.
The Point Break contract was one of several efforts to use Wildwood’s wide beaches to help boost the city’s economy. Some have been hailed as successes, including a four-day festival in 2016 headlined by Tim McGraw over the Fourth of July weekend.
To contact Bill Barlow, email bbarlow@cmcherald.com.