Alliant Energy Corp. v. Alltel Corp.

• Decision Date: 15 November 2004
• Docket Number: No. 4:02 CV 90511.,4:02 CV 90511.
• Citation: 344 F.Supp.2d 1176
• Parties: ALLIANT ENERGY CORPORATION, a Wisconsin Corporation, Plaintiff, v. ALLTEL CORPORATION, a Delaware Corporation, Defendant.
• Court: U.S. District Court — Southern District of Iowa

344 F.Supp.2d 1176

ALLIANT ENERGY CORPORATION, a Wisconsin Corporation, Plaintiff, v. ALLTEL CORPORATION, a Delaware Corporation, Defendant.

No. 4:02 CV 90511.

United States District Court, S.D. Iowa, Central Division.

November 15, 2004.

COPYRIGHT MATERIAL OMITTED

Cynthia L Buchko, Whyte Hirschboeck Dudek SC, Madison, WI, for Alliant Energy Corporation, Plaintiff.

Joseph S Goode, Whyte Hirschboeck Dudek SC, Madison, WI, for Alliant Energy Corporation, Plaintiff.

Thomas D Hanson, Hanson Bjork & Russell, Des Moines, for Alltel Corporation, Defendant.

Mark McCormick, Belin Lamson McCormick Zumbach Flynn, Des Moines, for Alliant Energy Corporation, Plaintiff.

Clark G McDermott, Hanson, Bjork, & Russell LLP, Des Moines, for Alltel Corporation, Defendant.

Thomas M Pyper, Whyte Hirschboeck Dudek SC, Madison, WI, for Alliant Energy Corporation, Plaintiff.

MEMORANDUM OPINION AND ORDER

PRATT, District Judge.

Before the Court are three motions for summary judgment. The first is Defendant's Motion for Partial Summary Judgment on its Counter-claim against the Plaintiff. (Clerk's No. 18). The second is Defendant's Motion for Partial Summary Judgment on Plaintiff's Declaratory Judgment Request. (Clerk's No. 86). The third is Plaintiff's Motion for Partial Summary Judgment on its breach of contract claims and request for declaratory relief. (Clerk's No. 90). The motions have been fully submitted and oral argument on all motions was held on October 7, 2004. Jurisdiction is proper under 28 U.S.C. § 1332, as there is complete diversity between the parties and the amount in controversy exceeds $75,000.

I. BACKGROUND

Plaintiff, Alliant Energy Corporation ("AEC"), is a Wisconsin utility holding company that has controlling investments in companies engaged in the business of supplying public utility services to customers in Wisconsin, Iowa, Minnesota, and Illinois. Defendant, Alltel Corporation ("Alltel"), is a Delaware corporation engaged in, among other things, the business of supplying telecommunications utility services in various states across the United States, including Iowa. The relationship between the parties that eventually led to the present lawsuit began on April 29, 1998, when the Defendant filed a now settled trademark infringement suit against the Plaintiff in the United States District Court for the Southern District of Iowa. See Aliant Communications, Inc. v. Interstate Energy Corp., Case No. 1-98-CV-80027.

Regarding the previous litigation, Aliant Communications, now Defendant, had a registered trademark, since 1996, in various "Aliant" marks. Interstate Energy Corp., now Plaintiff, had completed a merger and announced its new name, Alliant Energy Corporation. Due to the similarity between Plaintiff's announced name and Defendant's registered trademark, the trademark infringement suit was filed. The suit was dismissed on October 1, 1998, when the parties entered into a Settlement Agreement ("Agreement"). The meaning and interpretation of this Agreement is the subject of the motions now before this Court. In addition to territorial restrictions, the Agreement generally provided that Defendant could use the "Aliant" mark freestanding, while Plaintiff could only use Alliant in combination with the word Energy. After the Agreement was signed, Plaintiff completed registration of its currently held trademarks, "Alliant Energy" and "Alliant Energy Resources," and Defendant continued business under its name, Aliant. Under the Agreement, Plaintiff was to pay Defendant $4,000,000¹. The specifics of the Agreement will be discussed more thoroughly infra.

On May 13, 1999, Defendant sold only its Canadian rights, as opposed to its United States rights, in the "Aliant" marks to a Canadian company ("Aliant Canada"). The Agreement between AEC and Alltel was mentioned, but not affected, as Canadian territory is not covered in the Agreement. On July 2, 1999, Defendant was involved in a reverse triangular merger, whereby Aliant became a wholly owned subsidiary of Alltel.² It is at this time that questions of abandonment of the "Aliant" marks become relevant. After Alltel acquired Aliant, a rebranding plan developed and was implemented to announce the acquisition to the public and to effectuate the name change. Alltel issued a press release on September 15, 1999, which stated the following:

ALLTEL Name Goes up in Nebraska. ALLTEL officially comes to Nebraska on September 20 ... following Aliant shareholder approval in April and regulatory approval by the Federal Communications Commission in July, the company began the process of changing its name to ALLTEL. The process will be completed September 20, when retail locations vehicles and buildings will display the new ALLTEL identity.

At approximately the same time, Plaintiff and Defendant entered into correspondence discussing abandonment and the acquisition by Plaintiff of Defendant's rights in the "Aliant" marks. A December 22, 2000, letter from AEC referenced telephone conversations between the Plaintiff and Defendant concerning the purchase of the "Aliant" marks by AEC. Plaintiff never purchased Defendant's rights in the "Aliant" marks, nor did Defendant ever concede abandonment to the Plaintiff during this time.

On February 8, 2001, Defendant entered into an assignment trademark agreement ("Canadian Agreement") with Aliant Canada, transferring any and all rights and goodwill that Defendant had in the "Aliant" marks to Aliant Canada. The assignment was recorded by the United States Patent and Trademark Office ("PTO") on April 20, 2001. Plaintiff learned of the Canadian Agreement February 13, 2001, and made the installment payment on the Settlement Agreement on October 1, 2001. Plaintiff also engaged Aliant Canada in discussions of whether the terms of the Settlement Agreement would be upheld. On January 10, 2002, Aliant Canada agreed to abide by the terms of the Settlement Agreement, "on the understanding that [AEC] will continue to comply with the Agreement." See Clerk's No. 98 at 5.

Plaintiff filed the present Complaint on October 1, 2002, the same day that the final installment on the Settlement Agreement was due to Defendant. The Complaint alleges two breaches of contract: 1) Alltel's refusal to admit abandonment; and 2) Alltel's assignment of trademark rights in the "Aliant" marks to Aliant Canada without disclosing the terms of the Agreement. Plaintiff further requested that this Court issue a declaratory judgment that Defendant abandoned the "Aliant" family of marks prior to February 8, 2001. Defendant denied the allegations in the Complaint and counter-claimed for payment of $625,000, the final installment due on the Settlement Agreement. Since the filing of the Complaint, Aliant Canada has filed two trademark applications and formal statements on its intent to use.³ Defendant has moved for summary judgment on its counter-claim and for summary judgment to deny Plaintiff's request for declaratory relief. Plaintiff has moved for summary judgment on its two counts of contract breach, declaratory request, and dismissal of Defendant's counter-claim.

The parties have very different ideas about their respective duties under the Agreement and the relevance of abandonment to these proceedings. Plaintiff claims that a finding of abandonment is crucial to every issue before the Court, while the Defendant claims that, as a matter of law, abandonment has no bearing on this case. It is with these facts in mind that the Court examines these motions for summary judgment and sets out to interpret the Agreement between the parties.

II. LEGAL STANDARDS

Federal Rule of Civil Procedure 56(c) provides for summary judgment, "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Summary judgment "is an extreme remedy, and one which is not to be granted unless the movant has established his right to a judgment with such clarity as to leave no room for controversy and that the other party is not entitled to recover under any discernible circumstances." Robert Johnson Grain Co. v. Chemical Interchange Co., 541 F.2d 207, 209 (8th Cir.1976) (citing Windsor v. Bethesda Gen. Hosp., 523 F.2d 891, 893 n. 5 (8th Cir.1975)). Summary judgment is properly granted when the record, viewed in the light most favorable to the nonmoving party and giving that party the benefit of all reasonable inferences, shows that there is no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Hunt v. Cromartie, 526 U.S. 541, 549, 119 S.Ct. 1545, 143 L.Ed.2d 731 (1999); Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Walsh v. United States, 31 F.3d 696, 698 (8th Cir.1994); United States v. City of Columbia, 914 F.2d 151, 153 (8th Cir.1990). In motions for summary judgment, the court must make a distinction between what are the issues of law in the case and what are the issues of material fact.

It is well settled that federal courts, in diversity cases, must apply the substantive law of the forum state, in the absence of controlling federal law. See Erie R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). Matters of contract construction and interpretation and choice of law rules are matters of substance, rather than procedure, so this Court must look to the laws of the forum state, Iowa. See Klaxon Co. v. Stentor Elec. Mfg., 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941) (holding that a federal court must employ the choice of law rules of the forum state). Under Iowa choice of law rules concerning contracts, the laws of the forum state are used unless application of foreign law is asserted and proven...