Puls v. Landmark Community Newspaper, Inc., 070709 FED10, 08-1263

Docket Nº:08-1263
Opinion Judge:WADE BRORBY, United States Circuit Judge
Party Name:RUSSELL A. PULS, JR., Plaintiff-Appellant, v. LANDMARK COMMUNITY NEWSPAPERS, INC., a Virginia corporation; LANDMARK COMMUNITY NEWSPAPERS OF COLORADO, INC., a Colorado corporation, Defendants-Appellees.
Judge Panel:Before BRISCOE, BRORBY, and McCONNELL, Circuit Judges.
Case Date:July 07, 2009
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit
 
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RUSSELL A. PULS, JR., Plaintiff-Appellant,

v.

LANDMARK COMMUNITY NEWSPAPERS, INC., a Virginia corporation; LANDMARK COMMUNITY NEWSPAPERS OF COLORADO, INC., a Colorado corporation, Defendants-Appellees.

No. 08-1263

United States Court of Appeals, Tenth Circuit

July 7, 2009

(D. Ct. No. 1:07-CV-00170-RPM-CBS) (D. Colo.)

Before BRISCOE, BRORBY, and McCONNELL, Circuit Judges.

ORDER AND JUDGMENT[*]

WADE BRORBY, United States Circuit Judge

Appellant Russell A. Puls Jr. appeals the district court's grant of summary judgment in favor of Appellees Landmark Community Newspapers, Inc. and Landmark Community Newspapers of Colorado, Inc. (collectively referred to as LCNI) in a dispute over their alleged breach of a severance of employment agreement with Mr. Puls and intentional interference with his at-will employment contract with Trader Publishing Company (Trader). On appeal, Mr. Puls alleges issues of material fact exist as to whether Trader is an affiliate or affiliated entity of LCNI under the terms of the severance agreement; and, even if it is an affiliate, whether the severance agreement prevented LCNI representatives from providing Trader representatives a negative employment reference about him. LCNI argues in support of summary judgment, claiming no issue of material fact exists because Trader is an affiliate of LCNI so Trader is a party to the severance agreement at issue and, therefore, LCNI could give a negative employment reference to Trader without breaching the terms of the severance agreement or intentionally interfering with Mr. Puls's at-will employment contract with Trader. We exercise jurisdiction under 28 U.S.C. § 1291 and affirm the district court's grant of summary judgment in favor of LCNI.1

I. Factual Background

The following facts are undisputed by the parties. Mr. Puls is a resident of Jefferson County, Colorado. Individually, Landmark Community Newspapers, Inc. is a Virginia corporation and Landmark Community Newspapers of Colorado, Inc. is a Colorado corporation; both are wholly-owned subsidiaries of Landmark Communications, Inc. (Landmark) which has its place of business in Virginia and is a privately-held media corporation with multiple ownership interests in newspapers, classified publications, and other communications industries. Landmark owns 100% of LCNI's shares. LCNI employed Mr. Puls as an advertising sales director for one of its Colorado publications, Evergreen Newspapers, from July 2001 until August 26, 2005, when it fired him.

After LCNI fired Mr. Puls, the parties disputed the reasons for his termination, with Mr. Puls contending it constituted retaliation for his complaints against the publisher, whom he allegedly observed making overt sexual and demeaning comments to female employees, while LCNI asserted it resulted from his alleged unethical advertising tactics in two ad campaigns.2 For the purpose of avoiding litigation over the reasons for his termination, the parties agreed to enter into a severance agreement dated October 17, 2005. The severance agreement stated it was:

[M]ade between Russell A. Puls Jr. ("Puls") and "Landmark Community Newspapers, Inc., Landmark Community Publications, Inc., their past, present, and future agents, employees, directors, officers, shareholders, affiliates, insurers, reinsurers, affiliated corporations or other entities, successors in interest, and newspapers (included but not limited to the newspapers referred to as Evergreen Newspapers) (referred to herein collectively as "LCNI").

Apt. App. at 18 (emphasis added). As to the "reasons for agreement," the severance agreement stated Mr. Puls "separated from his employment with LCNI, effective, August 26, 2005," and the parties "wish[ed] to resolve all issues related to his employment and termination." Id. at 18 (¶¶ A-1, A-2). Mr. Puls agreed "he had been finally and permanently separated from employment with LCNI ...." Id. at 18 (¶ A-4). The parties also agreed LCNI would pay Mr. Puls $8,250 severance pay and Mr. Puls would withdraw any claim or charge with the Equal Employment Opportunity Commission or any other administrative agency. With regard to work references for Mr. Puls, the agreement stated: "LCNI and Evergreen Newspapers will give Puls a neutral reference." Id. at 18 (¶ B-3). LCNI representatives generally limit a "neutral reference" to the dates of employment, position, and location at the time of employment with Landmark.

In January 2006, following his termination, Mr. Puls accepted a position with "Colorado Parent," a publication of United Parenting Publications, which at that time was a division of Trader.3 During his interviews with Trader representatives, Mr. Puls did not tell them LCNI terminated or discharged him or that he entered into a severance agreement; instead, he advised them he "separated" from Evergreen Newspapers due to his disagreement with management.

Before Mr. Puls started his new job with Trader, LCNI representatives learned he had applied for a position with Trader. Kim Hogan, the human resources director for LCNI, contacted Sunny Sonner, the executive vice president of human resources for Trader, and also had a conversation with Susan Blake, an attorney and regional human resources director for Trader. Ms. Hogan informed them of Mr. Puls's discharge and his ineligibility for rehire under the severance agreement; she also told Ms. Sonner that Mr. Puls made decisions which LCNI disagreed with and considered unethical. Trader then withdrew its offer of employment to Mr. Puls.4

Trader is a jointly-owned Virginia partnership. The 1991 joint venture agreement forming the partnership lists LTM Company – a Landmark company – and TPI, Inc. – a Cox Communications (Cox) company – as joint venturers, stating each holds a 50% interest in Trader. The joint venture agreement also refers to both Cox and Landmark as "parent[s]" of the venture.

The joint venture agreement gives the board of directors the power to manage Trader and gives each joint venturer the authority to elect and remove three of the six members of the board of directors; it also states no action can be taken without the vote of at least four of those directors and that a quorum for any board meeting requires four directors. In addition, each joint venturer has the power, every other year, to select the chairman of Trader's board of directors, who has authority to set the agenda and direct meetings. At least one board member of each joint venturer is required to serve on each of the board's committees, and one board member of each joint venturer comprises a two-member executive committee, which can act only by unanimous vote. Under the agreement, either joint venturer can unilaterally remove the chief executive officer (CEO). The joint venture agreement also provides a paragraph outlining the limitations on the joint venturers' powers, stating, in part:

Except for designating and removing Directors ...; removing the CEO ...; adopting a plan of liquidation and directing the CEO in winding up the affairs of the Venture after the dissolution of the Venture ...; and executing certificates and amendments ...; neither Venturer acting alone shall, without the consent of the other Venturer, have any right or authority, either expressed or implied, to act for or bind the Venture.

Apt. App. at 101 (¶ I(1)).

The joint venture agreement defines "affiliate" and "affiliated person," in part, as "any person directly or indirectly Controlling, Controlled by, or under common Control with, the specified Person; [or] any person owning or Controlling ten percent (10%) or more of the outstanding voting securities of the specified Person." Id. at 70-71. It also defines "control" as "[t]he possession by any person or related group of persons, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities or partnership interests, by contract or otherwise." Id. at 73.

II. Procedural History

On January 23, 2007, Mr. Puls filed his complaint against LCNI, alleging it: (1) breached the terms of the severance agreement by failing to provide a "neutral reference" to Trader; and (2) intentionally interfered with Mr. Puls's at- will employment contract with Trader by providing a negative reference. Thereafter, LCNI filed a motion for summary judgment claiming, as it does on appeal, that no issues of material fact existed because Trader was an affiliate or affiliated entity of LCNI so that Trader was a party to the severance agreement and, therefore, LCNI could give a negative employment reference to Trader without breaching the severance agreement or intentionally interfering with Mr. Puls's employment contract with Trader.

The district court held a summary judgment hearing on December 17, 2007, at which time both parties presented argument. Mr. Puls argued Trader was not an affiliate of LCNI because Landmark only owned 50% of Trader and therefore did not have "corporate control" over Trader. In turn, LCNI argued that under Colorado statutory law: (1) Landmark's 50% ownership established it was not a minority shareholder, but an equal shareholder with Cox; and (2) the joint venture agreement established Landmark and Cox jointly or commonly controlled Trader through their representation on the board of directors and rotating selection of the chairman of the board.

In addressing the parties' arguments at the hearing, the district court determined: (1) Mr. Puls had not carried his burden of proving Trader was not an affiliate of LCNI; (2) the severance agreement was unambiguous with regard to its reference to affiliates and affiliate entities; and (3) "common control," not "corporate control," was the standard in Colorado for showing the...

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