Nelle v. Who Television, LLC
| Decision Date | 18 October 2018 |
| Docket Number | 4:17-cv-00107 |
| Parties | James NELLE, Roof One Exteriors LLC, Roof One of Iowa LLC, and Roof One Nebraska, LLC, Plaintiffs, v. WHO TELEVISION, LLC and Tribune Media Company, Defendant. |
| Court | U.S. District Court — Southern District of Iowa |
David Wayne Nelmark, Gislason & Hunter LLP, Des Moines, IA, for Plaintiffs.
Susan Patricia Elgin, Michael A. Giudicessi, Faegre Baker Daniels, LLP, Des Moines, IA, Mary Andreleita Walker, Faegre Baker Daniels LLP, Minneapolis, MN, for Defendant.
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
Before the Court is Defendants WHO Television, LLC and Tribune Media Company's Motion for Summary Judgment, filed on June 13, 2018. ECF. No. 47. Plaintiffs filed a resistance on July 5, 2018, ECF. No. 57, and Defendants filed a Reply on July 12, 2018. ECF No. 58. The Court heard oral argument on August 23, 2018. See ECF No. 65. The matter is fully submitted.
James Nelle is the owner of Roof One Exteriors LLC, Roof One of Iowa LLC, and Roof One Nebraska, LLC, which are construction companies and "storm chaser" businesses that travel to storm-damaged areas to try and solicit work. ECF No. 47-1 ¶ 11. Roof One Exteriors LLC (Roof One) operates out of Winterset, Iowa, where Nelle lives. Id. ¶ 6. Roof One Nebraska, LLC was dissolved on June 2, 2015, and reinstated on August 29, 2017. Id. ¶¶ 8–9. It is the practice of at least some construction companies, and Nelle and Roof One, to use contingency contracts, wherein the contractor is paid the amount of the insurance payout for storm repair to a home, and the homeowner pays only the insurance deductible on the homeowner's policy. See ECF No. 47-18; ECF 54-17.
In the summer of 2015, Mary Gregory of Winterset, Iowa called Nelle to examine her house for hail damage. ECF No. 47-1 ¶ 29. Nelle and Gregory knew each other in passing from the veterinarian's office where Gregory worked. ECF No. 54-2, 4:2–7. On July 6, 2015, they signed a contract for home repair (the Contract). ECF No. 47-1, ¶ 29. Gregory kept the pink carbon copy for her records. ECF No. 47-1 ¶ 31. The contract provides, among other things, that it does not obligate either party until it is approved by Gregory's insurance provider; that the price will be the agreed amount with the insurance provider; that Roof One Exteriors LLC will receive the total payout from the insurance company; and that Gregory will only have to pay the deductible on her insurance policy. ECF Nos. 47-18, 47-19. The contract has a space for payment schedules and a line for "Total Price of Job." On the second page of the contract are additional provisions, including line 4, "THERE ARE NO ORAL AGREEMENTS OF ANY KIND," and line 7, a liquidated damages provision of twenty-five percent of the contract price in case of cancelation. ECF No. 47-19. In Gregory's copy of the contract, the line next to "Total Price of Job" is blank. ECF No. 47-18. In the copy in Nelle's possession, and later sent in a demand letter to Gregory, the "Total Price of Job" line is filled in with "$32,134.86 + any supplement." ECF Nos. 47-19, 47-20.
Sometime later, Nelle returned to Gregory's house for a walk-around damage inspection with her insurance adjustor. See ECF No. 54-6; ECF No. 54-2, 5:1-6:19. Gregory then received a scope of insurance form from her insurance company, which she gave to Nelle. See ECF No. 54-2, 11:17–19; ECF No. 54-6; ECF No. 54-16. The scope of insurance lays out the damage the insurance company found, what it will cover, Gregory's deductible, and the total payout it will provide for repairs. Nelle filled in the total amount of the scope of insurance, ECF No. 54-16, into his copy of the contract. Plaintiffs contend Gregory was present when Nelle filled the numbers in, and Nelle would later tell a reporter that Gregory could not find her own copy of the contract when they filled the numbers in. ECF No. 54-2, 13:6–8; ECF No. 54-6, 9:1–14. Gregory, for her part, would instead tell a reporter that she did not know where the numbers came from. See ECF No. 47-6, 52:10–19. Gregory did not sign or initial the changes on Nelle's copy of the contract, and the price term changes are not reflected in her own copy. ECF No. 47-1 ¶ 32.
When construction supplies started to arrive at Gregory's house in August 2015, she was surprised and called another contractor she had solicited a bid from, David Falke, and asked if they were for him. ECF No. 47-10 ¶¶ 5–6. Falke went to Gregory's house and determined they were not his supplies. Id. Falke was also shown paperwork Gregory had received from Nelle and Roof One. Id. ¶ 7. Falke was concerned, as he did not see a price term on the document, and believed Gregory thought it was a contract for an estimate, rather than a contract for repair work. Id. Nelle also came to the house, and Falke perceived Nelle to be using high pressure sales tactics against Gregory. Id. ¶ 11.
After Gregory decided she did not want Roof One Exteriors to do the repairs and rejected building supplies sent to her house, she received a demand letter from Mark L. Smith, a lawyer representing Roof One. ECF No. 47-20. The letter was dated August 25, 2015, and sought liquidated damages of $8033.72 for backing out of the contract. Id. The letter referred to a "total agreed upon payment" of $32,134.86 plus supplements, and included a copy of Nelle's version of the contract, featuring the filled-in price term without any initials or signatures next to it. Id.
Gregory in turn informed Falke of the demand letter, and Falke contacted WHO-TV to express his concerns about the blank-price contract and Nelle's actions as he understood them. ECF No. 47-1 ¶¶ 42–43. WHO-TV is an NBC affiliate television station, incorporated in Delaware, and a wholly-owned subsidiary of Tribune Media Company. It broadcasts in central Iowa, and is located in Des Moines, but its stories are also posted online. Id. ¶¶ 16–17. Falke spoke with a reporter for WHO-TV, Aaron Brilbeck. Id. ¶ 42. Falke provided Brilbeck with his story about Gregory's situation, Gregory's copy of the contract with Roof One Exteriors, and the demand letter. Id. ¶ 43.
Brilbeck, interested in what he heard, began to investigate the story. He spoke first with Gregory, on September 1, 2015. Id. ¶ 46. Gregory told him the following story, which would air on WHO-TV as the lead news story that same night: Gregory believed she signed a request for an estimate from Nelle and Roof One Exteriors that did not obligate her to use Roof One Exteriors for repairs; she was surprised and did not know why roofing supplies were being sent to her house; she was not present when the price term was filled into Nelle's copy of the contract and did not know how it got there; and the first time she learned of it was when she received the demand letter that sought damages from her for breach of contract. ECF 47-6, 52:1–119; ECF No. 47-12.
Brilbeck then went to speak to Nelle at his home and place of business. ECF No. 47-1 ¶ 47. Upon arrival, Brilbeck introduced himself as a reporter from WHO-TV and asked Nelle about Gregory and the contract. Parts of the interview with Nelle were recorded, including an earlier part on Nelle's doorstep and a second part inside Nelle's house. ECF No. 54-2, 2:1–3:19. Although the two go in circles a few times, the fundamentals are as follows.
Nelle explained, several times, how he does business and how he believed he worked with Gregory. ECF No. 54-2, 4:1–24, 5:16–24, 7:20–24, 29:11–30:5. He goes door-to-door or by appointment, largely in storm-damaged areas. After a storm, a homeowner files an insurance claim and an adjustor comes out, assesses the damage, and writes a check to the homeowner consistent with the policy. Nelle meets with a potential client before that event and they sign a contingency contract, which obligates the person to give Nelle and Roof One Exteriors the amount the insurance agrees to pay in total for repairs. In return, Nelle and Roof One Exteriors do all the home-repair work, and Nelle works with the insurance adjustor to ensure that the claim is as robust as possible. Nelle told Brilbeck that the price contract is blank because the final payout is determined by the insurance company, but the contingency contract is signed before the specific payout from the insurance contract is approved. Nelle explained that the contract is not for a specific price term, but for the "scope of insurance" that is filled in once they hear from the insurance company, and that the contract is not affected by the amount of the scope. Nelle conceded that Gregory did not sign or initial the addition of the price term to the contract, but insists that she sat next to him when he filled it in, and that he did not have her do that because he did not think she would back out. Id. at 30:9–18.
Nelle also told Brilbeck that Gregory called him to seek an estimate and that he sat down and filled out a contract with Gregory that only obligated her if the insurance company agreed to pay. Id. at 4:17–25. Nelle told Brilbeck he put a bid together and then met with Gregory's insurance adjustor, id. at 5:16–24, and increased her claim only about $6000 to the $32,000 of damages reflected in the scope of insurance. Id. at 6:21–7:2. Nelle told Brilbeck that Gregory reached out to him when she received the scope of insurance and they filled in the price on his copy of the contract together. Id. at 29:11–23.
Brilbeck, in response, returned to the added price term. He asked Nelle how anyone else would know that Gregory knew the price term was put into the contract, because she did not sign or initial it. See, e.g. , ECF No. 54-2, 18:17–19:5. Brilbeck also told Nelle several times that he did not care about other parts of the story, and when Nelle offered to show Brilbeck the scope of the insurance contract to show where the price term came from, Brilbeck refused to even look at it. Id. at 13:22, 36:6–21....
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