City Solutions v. Clear Channel Communications

• Decision Date: 21 November 2001
• Docket Number: No. C 99-00060 WHA.,C 99-00060 WHA.
• Citation: 201 F.Supp.2d 1035
• Parties: CITY SOLUTIONS, INC., Plaintiff, v. CLEAR CHANNEL COMMUNICATIONS, INC., Eller Media Company and Adshel, Inc., Defendants.
• Court: U.S. District Court — Northern District of California

Page 1035

201 F.Supp.2d 1035

CITY SOLUTIONS, INC., Plaintiff, v. CLEAR CHANNEL COMMUNICATIONS, INC., Eller Media Company and Adshel, Inc., Defendants.

No. C 99-00060 WHA.

United States District Court, N.D. California.

November 21, 2001.

Order denying reconsideration, January 11, 2002.

Nelson E. Brestoff, Joel S. Moskowitz, Moskowitz Brestoff Winston & Blinderman, Los Angeles, CA, for plaintiff.

Michael B. Green, Brobeck Phleger & Harrison LLP, San Francisco, CA, Richard S. Odom, Brobeck Phleger & Harrison, Los Angeles, CA, for defendants.

ORDER GRANTING DEFENDANTS' MOTION FOR PARTIAL SUMMARY JUDGMENT AND DENYING PLAINTIFF'S REQUEST FOR SANCTIONS

ALSUP, District Judge.

INTRODUCTION

Now before the Court in this contract dispute is defendants' motion for summary judgment on plaintiff's third and fifth causes of action. Plaintiff, along with its opposition, has requested that the defendants be sanctioned for filing a repetitive motion. This order GRANTS defendant's motion and DENIES plaintiff's motion.

STATEMENT

This case involves an alleged agreement or agreements concerning a bid on modular newsracks in San Francisco. Both plaintiff and defendants have already moved once for summary judgment; both motions were denied. Defendants have filed another motion, claiming it is justified by new evidence and new legal arguments. In their second motion, defendants ask for summary judgment on plaintiff's third cause of action, in which plaintiff CSI now alleges that defendant Eller Media breached two distinct oral joint venture agreements relating to the bid; and plaintiff's fifth cause of action, which alleges that defendants Adshel and Clear Channel Communications interfered with these agreements. The relevant facts, set forth in much greater detail in the parties' two sets of motions, follow.

On March 12, 1998, the City and County of San Francisco issued a Request for Proposals for a "Comprehensive Pedestal-Mounted News Rack Program for the City and County of San Francisco." The RFP sought a vendor to furnish, install and maintain up to 1,000 new multi-publication modular newsracks under a 20-year contract with the City, at no charge to the City, in return for the vendor receiving the right to sell advertising on the backs of a portion of the newsracks, and/or through free-standing advertisements. Proposals were to be submitted in writing.

CSI is a company that designs, constructs, installs and operates modular newsracks. Eller is a leading outdoor-advertisement firm. On March 31, 1998, CSI and Eller executives held the first of what would become several meetings concerning San Francisco's RFP. The parties agree that these meetings were held. They disagree, however, as to what, if anything, was agreed upon at these meetings. The parties also acknowledge that other related contacts were made between Eller and CSI executives, employees and attorneys. But they disagree as to what significance these other contacts had.

Most importantly for the present motion, CSI contends that at a meeting held on April 13, 1998, its President, Tom Trento, and Executive Vice President, David Hughes, agreed with William Hooper, President of Eller's Northern California Region, and George Broder, Eller's Public Affairs Manager, that CSI and Eller would work together on a response to the RFP. CSI also asserts that at a meeting held on May 26, 1998, the parties reached another oral agreement concerning the parties' business relationship should they be awarded the newsrack contract. Defendants contend that any deal to submit a bid together was always contingent on agreement on the terms of CSI and Eller's business relationship. Defendants argue that those terms were never agreed upon (in the May 26 meeting or otherwise), and therefore there was never any actionable agreement at all, only failed negotiations.

In any event, when the deadline for RFP responses eventually came in June 1998, Eller did not wind up bidding with CSI. Rather, Eller was part of the bid submitted by defendant Adshel. Adshel had been acquired by Eller's parent company, defendant Clear Channel, not long before the responses' due date. Ultimately, San Francisco awarded the bid to Adshel, which CSI alleges had no previous experience in building or operating newsracks. CSI then filed this suit in state court against Eller, Adshel and Clear Channel, alleging causes of action for breach of fiduciary duty; breach of a written confidentiality agreement; breach of an oral joint venture agreement; fraud and deceit; interference with contract; common law unfair competition; and violation of the trade secrets act. Defendants have since removed the suit to federal court, on the basis of diversity. Plaintiff then amended its complaint, as will be discussed in detail below.

ANALYSIS

Two threshold matters must be addressed at the outset. First, this is defendants' second motion for summary judgment. Judge Charles Legge, to whom this case was originally assigned, denied defendants' earlier motion (which sought summary judgment on all of plaintiff's claims) as well as plaintiff's own motion for summary judgment in January 2001.¹ Plaintiff protests that defendants' current motion is duplicative of their first. Close review of the arguments made by defendants, then and now, reveals otherwise. Defendants are relying on new evidence and making substantially different arguments than they had back in January in their cross-motion. Their motion is timely and does not disrupt the schedule set for this case. Under the circumstances, it will be considered and no sanctions will be imposed on defendants for filing it. See Cable & Computer Technology Inc. v. Lockheed Sanders, Inc., 214 F.3d 1030, 1038 (9th Cir. 2000).

Second, both plaintiff and defendants have made several evidentiary objections. Only two of these objections need be discussed; the other evidence is not relevant to this order. Defendants' objection to plaintiff's use of the deposition testimony of Gina Gregori and James McCargo, two contractors interviewed jointly by CSI and Eller executives, is overruled to the extent that this testimony relates to the parties' behavior (and not to the truth of any "joint venture" comments made). Also overruled is plaintiff's objection to defendants' request that the Court take judicial notice of the declaration of Brett Schuman and the exhibits attached thereto. Defendants' proffer does not keep with the spirit of this Court's standing order, under which reply declarations are disfavored. But these materials were originally filed months ago in connection with the first volley of summary-judgment motions in this case. And many of the documents therein were specifically cited in defendants' proposed statement of undisputed facts (never agreed upon), filed along with defendants' initial brief in this round of summary judgment. In short, plaintiff cannot claim that it was unfairly surprised by defendants' request.

1. Summary Judgment.

(a) General Standards.

Turning to the merits, defendants have moved for summary judgment on plaintiff's third and fifth causes of action. A party moving for summary judgment has an initial burden of production. To carry this burden, it must either produce evidence negating an essential element of the nonmoving party's claim or show that the nonmoving party does not have enough evidence of an essential element to carry its ultimate burden of persuasion at trial. If the moving party carries its burden of production, the nonmoving party must produce enough evidence to create a genuine issue of material fact. If the nonmoving party does not do so, the moving party wins. Nissan Fire & Marine Ins. Co. v. Fritz Cos., Inc., 210 F.3d 1099, 1102 (9th Cir.2000). A mere scintilla of evidence is not enough to defeat a properly supported motion for summary judgment. The nonmoving party must introduce some significant probative evidence tending to support their complaint. Anderson v. Liberty Lobby, 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Finally, where material facts are not in dispute, whether a contract exists is properly decided on summary judgment. Ransom v. United States, 900 F.2d 242, 244 (Fed.Cir.1990).

In their motion for partial summary judgment, defendants contend that Eller and CSI never reached an independent agreement to collaborate on a bid. They posit that any understanding that the parties would bid together was contingent on agreement as to the terms of Eller and CSI's business relationship. Since, they argue, these terms were never agreed upon, the parties never agreed to bid together. Plaintiff disagrees, asserting that the April 13 agreement to bid together was distinct and severable from any agreement as to the parties' long-term working relationship.

(b) Pleading History.

These arguments must be evaluated in light of a fundamental shift in plaintiff's position regarding whether one agreement or two agreements were ever reached between it and Eller. Plaintiff filed its original complaint in state court in December 1998. That complaint was verified under oath by Tom Trento, CSI's president. Paragraphs Thirty, 55 and 87 of that complaint swear that defendant breached an oral joint-venture agreement, finalized at the Eller-CSI meeting held on May 26, 1998. The first two paragraphs read as follows (emphasis added):

30. On April 13, 1998, Trento and Hughes met Hooper and Broder in San Francisco, and showed them the existing CSI information centers.... Subsequently, Broder left and Trento and Hughes continued the discussions with Hooper. At that point, Hooper said that Eller was going forward with CSI and that the parties had a deal subject only to working out the details.

55. On Monday, May 26, 1998, Trento, Hughes, Hooper and Broder met at Eller's office in Oakland.... [Hooper] said that the best thing for the parties to do under the circumstances was to discuss the business relationship in detail, covering all the points of...