Milbank v. Simons (In re Simons Broad., LP)
| Decision Date | 19 November 2013 |
| Docket Number | Civil No. W-11-CA-172 |
| Court | U.S. District Court — Western District of Texas |
| Parties | IN RE: SIMONS BROADCASTING, LP, Debtor, ROBERT MILBANK, JR., in his capacity as Plan Implementation Agent, Plaintiff & Counter-Defendant, v. MICHAEL SIMONS, and PROMISELAND TELEVISION NETWORK, INC., Defendants & Counter-Plaintiffs, and PROMISELAND TELEVISION NETWORK, INC., Cross-Plaintiff, v. EVERETT G. STRONG, BRIAN BYRNES, PARAMOUNT MEDIA ADVISORS, INC., KTAQ OF DALLAS, and PLATINUM EQUITY, LLC, Cross-Defendants. |
Before the Court is a civil lawsuit that was tried before a jury. At the close of evidence, various parties moved under Rule 50 of the Federal Rules of CivilProcedure for judgment as a matter of law as to all the claims presented to the jury. After due consideration of the evidence and applicable legal authority, the Court determined that each motion should be granted. Pursuant to Rule 50, the Court now issues this Memorandum Opinion and Order in accordance with that prior ruling.
This case arises out of the enforcement of a Chapter 11 Plan. Prior to the bankruptcy, the Debtor, Simons Broadcasting, was a Texas limited partnership. All equity interests in Simons Broadcasting were owned or controlled by Michael Simons individually as limited partner, and as president of its general partner, Simons Asset Management, Simons is also the president and board member of PromiseLand Television Network ("Promiseland"), a non-profit organization; however, as a Section 501(c)(3) non-profit, Promiseland was incorporated as a distinct entity apart of Simons Broadcasting. Pursuant to its incorporation, Promiseland's main purpose involved promoting and selling airtime to religious organizations and commercial advertisers as well as distributing programming via satellite and internet channels. In 2005, Promiseland entered into an airtime agreement with Simons Broadcasting, which gave Promiseland the exclusive right to purchase all the airtime of KTAQ, a television station in the Dallas-Fort Worth area that was owned and operated by Simons Broadcasting. ThoughPromiseland provided its programming on the Internet as well as for satellite television, its primary broadcasting was on KTAQ.
In 2008, Simons Broadcasting filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the Western District of Texas, Waco Division. The Bankruptcy Court confirmed the First A The Bankruptcy Court named Robert Milbank, Jr. ("Plan Agent") as the Plan Implementation Agent, and his responsibilities included managing the Debtor's assets and operations as well as conducting an orderly liquidation. As part of the Plan, Milbank held the exclusive right to run KTAQ. By the terms of the Plan, the exclusive airtime agreement between Simons Broadcasting and Promiseland was terminated. However, throughout the course of the bankruptcy and after confirmation of the Plan, Promiseland continued to purchase airtime and provided programming to KTAQ. During the administration of the Plan, Milbank hired Brian Byrnes and his company, Paramount Media Advisors, to assist in the operations of KTAQ during the bankruptcy process. The Creditors, Platinum Debt Group and Platinum Equity, eventually purchased KTAQ at an auction in June 2010, through the newly formed entity, KTAQ of Dallas.
Shortly after the confirmation of the Plan, Milbank met with Simons to discuss the implementation process and Simons' participation as president of the Debtor. The Plan and the Order Confirming Chapter 11 Plan ("Order") required the Debtor to give the Plan Agent all income generated from the KTAQ asset, aswell as an accounting of its estate. Since the religious organizations were already paying Promiseland to broadcast its programming on KTAQ, Milbank and Simons agreed that Promiseland would continue accepting payments on behalf of the Debtor's estate, remit the payments to Milbank, and transmit the client's programs via Promiseland's programming on KTAQ.
During this period, a disagreement between Simons and Milbank developed regarding a 10% withholding amount for expenses. Simons claimed that both parties agreed to the 10% fee to cover expenses Promiseland incurred in connection with the collections and broadcasting on behalf of the Debtor. Milbank maintains that no agreement was finalized as he needed a detailed expense report from Simons, and wouid need the approval of the Creditors before agreeing to such terms. No written agreement was ever entered into by the parties. Even though Milbank corresponded with Simons on several occasions about this issue, Simons continued to deduct 10% from each payment before sending the income checks to Milbank each month.
On October 26, 2010, Milbank and Everett Strong, an employee of Platinum Debt Group and former employee of Promiseland, went to Promiseland's headquarters, which shared the same office suites with Simons Broadcasting. While visiting, Strong accessed the traffic computer for Promiseland and downloaded a software program called AdEze. The AdEze download included the traffic and billing information of the clients that purchased airtime throughPromiseland. Simons maintains that the "Client Information"1 was not only proprietary and confidential, but it exclusively belonged to Promiseland as a separate and distinct entity from Simons Broadcasting. Milbank claims that as Plan Agent, he had the right to possess the Client Information under the Order and that there is no evidence that the data taken was confidential or proprietary.
On March 9, 2011, Milbank filed an adversarial proceeding in the Bankruptcy Court styled Robert Milbank Jr., in his capacity as Plan Implementation Agent, Plaintiff v. Michael Simons, and Promiseland Television Network, Defendants, which bears Adversary Proceeding No. 11-06005. In the adversary proceeding, Milbank sought compliance with the Order, an accounting, and turnover. Simons and Promiseland filed their Answer, Affirmative Defenses, and Compulsory Counterclaims to Complaint and Promiseland's Original Cross-Complaint against Miibank and Strong. Pursuant to 28 U.S.C. § 157(d), this Court withdrew the case, allowing Counter and Cross Plaintiffs to exercise their right to a jury trial.2 Milbank and Simons filed a Motion for Summary Judgment, which was partially granted and partially denied.3 The Court allowedSimons and Promiseland to amend their counterclaims4 and add their claims against Byrnes, Paramount Marketing Media, the Platinum Debt Group, Platinum Equity, and KTAQ of Dallas ("PDG").5
On October 7, 2013, a five-day trial was presented to a seven-member jury. As Plan Agent of the Estate, Milbank presented his claims against Simons for the operational income Simons was withholding from the bankruptcy estate. Simons and Promiseland, as Counter and Cross Plaintiffs, followed by presenting their claims against Milbank, Strong, and PDG before the jury as well. They argued that Milbank, Strong, and PDG stole trade secret information from Promiseland and should be found liable for conversion, trespass to personalty, theft under the Texas Theft Liability Act, misappropriation of a trade secret, harmful access of a computer in violation of Chapter 33 of the Texas Penal Code, violation of the Computer Fraud and Abuse Act, and civil conspiracy. Simons and Promiseland also submitted claims against PDG for tortious interference with contract and business relations, and a breach of contract claim against Milbank for money he claims was owed to him under the Plan.
At the close of all the evidence, Milbank, Strong, and PDG moved for a directed verdict under Rule 50 on all claims asserted against them. Milbank also moved for a directed verdict on the Estate's original compliance claim againstSimons and Promiseland. Simons and Promiseland responded to each motion and voluntarily dismissed their claims for tortious interference of current and prospective business contracts against PDG. After hearing the arguments and considering the evidence presented at trial, the Court agreed that there were no fact issues to be decided on any of the claims. Accordingly, the Court granted the motions for judgment as a matter of law asserted by Milbank, Strong, and PDG, ruled against Simons and Promiseland on all claims, and dismissed the jury.
A court may grant judgment as a matter of law when "a party has been fully heard on an issue and there is no legally sufficient evidentiary basis for a reasonable jury to find for the party on that issue." FED. R. CIV. P. 50(a)(1). In order to survive a Rule 50 motion, "the party opposing the motion must at least establish a conflict in substantial evidence." Anthony v. Chevron USA, Inc., 284 F.3d 578, 583 (5th Cir. 2002). When weighing whether there exists a "conflict in substantial evidence" a court must consider all the evidence presented at trial in the light most favorable to the non-moving party, and must disregard all evidence favorable to the moving party that the jury is not required to believe. Reeves v. Sanderson Plumbing Products, Inc., 530 U.S. 133, 150-51 (2000); Ellis v. Weasler Engineering inc., 258 F.3d 326, 337 (5th Cir. 2001) .
Substantial evidence must be "of such quality and weight that reasonable and fair-minded men in the exercise of impartial judgment might reach different conclusions" regarding the case's outcome. Boeing Co. v. Shipman, 411 F.2d 365, 374 (5th Cir. 1969)(en banc). "A mere scintilla of evidence is insufficient to present a question for the jury." Id. Thus, arguments premised only on conclusory allegations, speculation, and unsubstantiated...
To continue reading
Request your trial