Associated Press v. Cook

• Decision Date: 14 April 1975
• Docket Number: No. 74-1429,74-1429
• Citation: 513 F.2d 1300
• Parties: The ASSOCIATED PRESS, a corporation, Plaintiff-Appellee, v. William S. COOK, d/b/a Radio Station KRYT, and Individually, Defendants-Appellants.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1300

513 F.2d 1300

The ASSOCIATED PRESS, a corporation, Plaintiff-Appellee, v. William S. COOK, d/b/a Radio Station KRYT, and Individually Defendants-Appellants.

No. 74-1429.

United States Court of Appeals Tenth Circuit.

April 14, 1975.

Orville A. Kenelly, Colorado Springs, Colo., for defendants-appellants.

Cuba Y. Holloway, Colorado Springs, Colo., for plaintiff-appellee.

Before HILL, SETH and BARRETT, Circuit Judges.

HILL, Circuit Judge.

This is an appeal from an order granting summary judgment in a breach of contract action.

The Associated Press (AP) is a New York corporation engaged in the business of providing a news service to its member organizations. William Cook is the owner-operator of radio station KRYT in Colorado Springs, Colorado. He applied for and received associate member status in the AP and began using its news service on August 1, 1965.

Cook and AP entered into a ten year news service contract on October 14, 1965. It set forth payments, subject to yearly increases, to be made by Cook and also provided, inter alia:

2. In the event that the assessment payable hereunder shall, at any time . . . be increased by the Board of Directors by more than twenty-five per cent . . . during any two-year period, the Member shall have the right, at any time within sixty (60) days after . . . written notice of such increased assessment . . . to terminate this agreement upon seven (7) days written notice . . . to The Associated Press. . . .

8. In the event that any of the terms . . . of this agreement shall be or become contrary to or inconsistent with the By-Laws of The Associated Press, the By-Laws shall control. The Associated Press agrees to give the Member not less than thirty (30) days' prior notice . . . of any amendment to its By-Laws, the effect of which will be to diminish the rights or increase the obligations of the Member under this agreement. The Member shall have the right to terminate this agreement upon the effective date of any such amendment . . . provided that notice in writing of the Member's intention to terminate is given to The Associated Press . . . not less than ten (10) days prior thereto.

13. If the member shall fail to pay the assessment provided for . . . when due . . . the news service . . . may be suspended and the Member shall be liable . . . for the total amount of assessments . . . for the balance of the term. . . .

Cook's payments under the contract were increased every year by scaled increases. Additionally, AP's Board of Directors increased the amounts of the payments on January 1, 1967, on February 2, 1969, and on March 1, 1970.

AP notified its members on March 12, 1971, that a proposed amendment to its by-laws would be considered at its annual meeting on April 19, 1971. The amendment, relating to qualifications of directors, was adopted and became effective on April 19, 1971.

Beginning on March 28, 1971, Cook stopped paying AP for the news service it was providing. He subsequently informed AP that he was terminating the contract on October 1, 1971. AP suspended news service to Cook on October 12, 1971, and thereafter filed this breach of contract action against him in the United States District Court for the District of Colorado. The complaint sought $13,435.07 for past due assessments and for loss of future revenue under the contract.

Cook answered and admitted owing some money to AP but denied owing the amount alleged in the complaint. As affirmative defenses he alleged that he had validly terminated the contract (1) pursuant to paragraph 2 thereof because AP increased his assessments payable during a two year period by more than twenty-five percent, and (2) pursuant to paragraph 8 thereof because he was not given notice of a by-laws amendment which diminished his rights or increased his obligations under the contract.

Thereafter, AP filed a motion for summary judgment accompanied by supporting affidavits. Cook did not file any opposing affidavits. The trial court denied the motion on the grounds an issue of fact existed as to whether AP amended its by-laws in such a way as to affect Cook and, if so, whether he received notice thereof. AP then filed a supplemental motion for summary judgment, supported by affidavits showing the amendment did not affect Cook and that he received notice of it. Again, Cook did not file any opposing affidavits.

Trial was set for April 15, 1974. On April 11, 1974, AP successfully moved to vacate the trial date. Subsequently, its supplemental motion for summary judgment was heard and granted.

On appeal, numerous grounds for reversal are proffered. Initially, Cook contends summary judgment was improperly granted because genuine issues of material fact existed regarding his right to terminate the contract. He also asserts that the contractual provisions regarding these rights were ambiguous and could only be resolved by resort to writings that were not before the trial court.

We believe Cook's reliance on these issues is misplaced. They are material only insofar as they concern his right to terminate the contract in question. That contract, however, could be terminated only if he exercised the option to do so within a specified time after the happening of certain events. Thus, it is unnecessary to determine if events occurred which gave him the option to terminate if he did not validly exercise that option.

For this reason we believe the trial court properly granted summary judgment. The pleadings, affidavits and other documents before it show that, although Cook did attempt to terminate the contract on October 1, 1971, such termination was not within the contract's prescribed time limits and was ineffective. AP gave its members more than 30 days' notice of a proposed by-laws amendment that became effective on April 19, 1971. If this amendment affected Cook's contract rights he had the option of terminating the contract by April 9, 1971. He failed to do this.

Similarly, he did not give timely notice to terminate the contract because of increased assessments by AP's Board of Directors. The record...