Eaton v. Marion County Fair Ass'n, 4-01-CV-90294.

• Decision Date: 30 October 2001
• Docket Number: No. 4-01-CV-90294.,4-01-CV-90294.
• Citation: 172 F.Supp.2d 1184
• Parties: Christoper EATON, Plaintiff, v. MARION COUNTY FAIR ASSOCIATION, Defendants.
• Court: U.S. District Court — Southern District of Iowa

172 F.Supp.2d 1184

Christoper EATON, Plaintiff, v. MARION COUNTY FAIR ASSOCIATION, Defendants.

No. 4-01-CV-90294.

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

October 30, 2001.

Lawrence L. Marcucci, John C. Conger, West Des Moines, Iowa, for Plaintiff.

Michael G. Voorhees, Des Moines, Iowa, for Defendant.

MEMORANDUM OPINION AND ORDER

PRATT, District Judge.

Plaintiff, Christopher Eaton, brings this action in diversity against Defendant, Marion County Fair Association (the "MCFA"), asserting interference with prospective business advantage, conversion, malicious prosecution, abuse of process, as well as violations of Iowa competition law and federal antitrust law. The MCFA has counterclaimed for breach of contract and raised affirmative defenses related to a mutual release the parties had previously signed. Defendant now moves for summary judgment, and for the reasons set forth below, the Court denies the motion.

I. Facts

These claims arise out of the court order which MCFA secured to confiscate Mr. Eaton's sales merchandise at the national sprint car championships (the "Race"), which is run by the MCFA. On August 11th, the MCFA filed a lawsuit against Mr. Eaton for trademark infractions related to the t-shirt merchandise he was selling at the Race. In doing so, the MCFA obtained a court order instructing law enforcement authorities to seize Mr. Eaton's merchandise. In his resistance to the MCFA's motion for summary judgment, Mr. Eaton claims that he had spent $16,000 for all the merchandise he was selling between August 9 and August 12, but does not identify how much of that was confiscated on August 11th or went unsold as a result.

Mr. Eaton, through his brother and under the advice of counsel, negotiated for the return of this merchandise in exchange for $1540 in past royalties, fees, and costs, 15% in future royalties, and a "Mutual Release." A handwritten agreement was signed that day by Timothy Eaton and a representative of the MFCA (the "Settlement Agreement"). The agreement states "Re: Injunction on 8-11-2000," then lists six conditions, numbered 1-6, relating to the financial conditions and the return of the merchandise. Then, after the numbered list, the words "Mutual Release," stand alone before the parties' signatures. On August 22, 2000, the District Court of the State of Iowa in Marion County issued an Order dismissing the case, "having been advised that all matters have been settled." The Order does not specify whether it is with or without prejudice.

II. Summary Judgment Standard

The purpose of summary judgment is to "pierce the boilerplate of the pleadings and assay the parties' proof in order to determine whether trial is actually required." Wynne v. Tufts Univ. Sch. of Med., 976 F.2d 791, 794 (1st Cir.1992), cert. denied, 507 U.S. 1030, 113 S.Ct. 1845, 123 L.Ed.2d 470 (1993). Summary judgment "allows courts and litigants to avoid full-blown trials in unwinnable cases, thus conserving the parties' time and money and permitting courts to [conserve] scarce judicial resources." Id.

The precise standard for granting summary judgment is well-established and oft-repeated: 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); Harlston v. McDonnell Douglas Corp., 37 F.3d 379, 382 (8th Cir.1994). The Court does not weigh the evidence nor make credibility determinations, rather the court only determines whether there are any disputed issues and, if so, whether those issues are both genuine and material. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact based on the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits, if any. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986), cited in Handeen v. Lemaire, 112 F.3d 1339, 1345 (8th Cir.1997); Anderson, 477 U.S. at 248, 106 S.Ct. 2505. Once the moving party has carried its burden, the nonmoving party must go beyond the pleadings and, by affidavits or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is genuine issue for trial. Fed.R.Civ.P. 56(c), (e); Celotex, 477 U.S. at 322-23, 106 S.Ct. 2548; Anderson, 477 U.S. at 257, 106 S.Ct. 2505. "[T]he mere existence of some alleged factual dispute between the parties will not defeat a motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson, 477 U.S. at 247-48, 106 S.Ct. 2505 (emphasis added). An issue is "genuine" if the evidence is sufficient to persuade a reasonable jury to return a verdict for the nonmoving party. Id. at 248, 106 S.Ct. 2505. "As to materiality, the substantive law will identify which facts are material.... Factual disputes that are irrelevant or unnecessary will not be counted." Id.

The defendant's burden with respect to its affirmative defense in moving for summary judgment is no different from its burden with respect to the plaintiff's claims, it must show that there is no genuine issue of material fact. Only in the case of moving for summary judgment on an affirmative defense, the defendant "must adduce evidence to support each element of its defenses and demonstrate the lack of any genuine issue of material fact with regard" to them. Rushing v. Kansas City S. Ry., 185 F.3d 496, 507 (5th Cir.1999). "Once the movant meets the appropriate burden, the nonmovant must expressly set forth `specific facts showing that there is a genuine issue for trial.'" Simmons v. Koronis Parts, Inc., 2001 WL 1095008 (D.Minn.) (quoting Anderson 477 U.S. at 248, 106 S.Ct. 2505).

III. Discussion

MCFA moves for summary judgment on the basis of its affirmative defenses of res judicata and the settlement agreement it previously reached with Mr. Eaton (the "Agreement"). The defense of res judicata fails as a matter of law and there are genuine issues of material fact with respect to whether the Agreement bars Mr. Eaton's claims and whether the Agreement itself it voidable due to duress.

A. The Settlement Agreement

1. Vagueness

The Settlement Agreement that the MCFA would have this Court use to bar Mr. Eaton's claims simply states "Mutual Release." Typically, a mutual release outlines the possible claims, parties, and time period to which such a mutual release might apply. A mutual release may, in fact, release the parties and anyone in any way related to them from any conceivable claims against each other for all time up to the date of the agreement, but lawyers will typically draft mutual releases that actually say that, rather than simply recite the magic words, "Mutual Release." Does the term in the Agreement, "Mutual Release" apply to all conceivable claims, or simply claims related to the injunction and not the court order to seize merchandise or the MFCA's trademark claims? Does the Agreement apply to claims arising for all time past, or simply the events of August, 2000? The Agreement is far too vague to answer these questions on its face and hence there is a genuine issue of material fact as to whether it bars Mr. Eaton's claims.

2. Economic Duress

Mr. Eaton also challenges the Settlement Agreement on the grounds that it was obtained under "economic duress." The Iowa Supreme Court has stated that elements for finding a contract voidable due to economic duress include whether "(1) one party involuntarily accepted the terms of another, (2) circumstances permitted no other alternative, and (3) such circumstances were the result of coercive acts of the other party." Fees v. Mut. Fire and Auto. Ins. Co., 490 N.W.2d 55, 58 (Iowa 1992).

Mr. Eaton may, or may not, have a valid defense to the enforcement of the settlement agreement under these elements. He clearly accepted terms dictated to him by the MCFA that he did not want to accept. Mr. Eaton's only alternative was to accept business losses, and fail to mitigate damages in doing so, and hope he could recover the losses in litigation later. Finally, the situation was clearly created by the court order to seize Mr. Eaton's merchandise obtained by the MCFA.

Whether or not Mr. Eaton's litigation alternative was viable, and thus whether or not the terms of the agreement were indeed forced...