Reindel v. Mobile Content Network Co., LLC

• Decision Date: 17 August 2009
• Docket Number: Civil Action No. 1:07-CV-3180-JOF.
• Citation: 652 F.Supp.2d 1278
• Parties: James REINDEL, Plaintiff, v. MOBILE CONTENT NETWORK COMPANY, LLC, doing business as the Palestra; and Georgia E. Weasel, III, Defendants.
• Court: U.S. District Court — Northern District of Georgia

652 F.Supp.2d 1278

James REINDEL, Plaintiff, v. MOBILE CONTENT NETWORK COMPANY, LLC, doing business as the Palestra; and Georgia E. Weasel, III, Defendants.

Civil Action No. 1:07-CV-3180-JOF.

United States District Court, N.D. Georgia, Atlanta Division.

August 17, 2009.

COPYRIGHT MATERIAL OMITTED

Christopher Paul Berney, Law Office of Christopher Berney, P.C., Atlanta, GA, for Plaintiff.

Christopher Carl Marquardt, Erin L. Connolly, Leslie E. Wood, Alston & Bird, LLP, Atlanta, GA, for Defendants.

OPINION AND ORDER

J. OWEN FORRESTER, Senior District Judge.

This matter is before the court on Defendant Mobile Content Network Company, LLC's motion for summary judgment [36], Defendant George E. Weasel, III's motion for summary judgment [37], Plaintiff's second motion to compel [65]; and Plaintiff's amended motion to compel [67].

I. Background

A. Procedural History and Facts

Plaintiff, James Reindel, filed suit against Defendants, Mobile Content Network Company, LLC, and George E. Weasel, III, on November 9, 2007, in the Superior Court of Fulton County, alleging causes of action of breach of contract, promissory estoppel, and fraud. Plaintiff also seeks punitive damages and attorney's fees. Defendants removed the suit to this court on December 21, 2007.

Defendant Mobile Content Network Company, LLC, does business under the name of The Palestra. The Palestra is an Internet and wireless content business designed to create and distribute audio and video information through its website. The content focuses on sports and entertainment news for teenagers and young adults. The content is provided by student reporters on college campuses as well as produced in-house at The Palestra's offices in Columbus, Ohio. Defendant Weasel and John Olvey developed the idea for The Palestra in late 2003 or early 2004. The Palestra was formally organized in 2006, and Weasel and Olvey were the initial members, each owning 50% of the company. At start-up, The Palestra was led by a team of seven key managers who did not receive monetary compensation. Instead, the key managers were offered 200,000 shares of stock in The Palestra.

Plaintiff Reindel has known Defendant Weasel since he was five years old and Weasel was his babysitter. Reindel has worked in the field of writing, producing, and editing news and sports-related productions since 1992 and has an extensive network of contacts at a variety of news and media organizations. Reindel and Weasel had talked about working together as early as 2000. Reindel began working as a full-time freelancer with Turner Broadcasting in the spring of 2006. Prior to that job, Reindel worked as a field producer for CNN en Espanol.

In 2006, Weasel approached Reindel with the idea of The Palestra. Weasel believed that Reindel's background at CNN made him a good candidate to be a member of The Palestra's management team. In October 2006, the discussions between Weasel and Reindel continued and intensified. At that time, Weasel told Reindel that he was keeping his partner Olvey apprised of their conversations "in hopes that it might expedite the process a little." In November 2006, at its own expense, The Palestra flew Reindel to Columbus, Ohio so that Reindel could see operations there. Reindel met Olvey and received a DVD with samples of The Palestra's content.

On November 28, 2006, Weasel flew to Atlanta to try to procure press credentials so that The Palestra's student reporters could have access to various college bowl games. Weasel asked Reindel to assist him in these efforts, and Reindel recommended that Weasel contact Sandy Malcolm who worked for CNN.com. Reindel walked around with Weasel at the offices of Turner and CNN and introduced Weasel to several people. Neither had scheduled meetings with anyone on that visit. Reindel introduced Weasel to Lila Eidi, a producer at CNN.com. The two spoke generally of The Palestra's content, including the Gig Guide, a daily report produced by The Palestra reporting on bands playing around the country. Eidi expressed interest in getting the Gig Guide on CNN.com, but she was not the person who made content decisions.

Weasel returned to Atlanta on December 20, 2006, where he and Reindel met with Jim Walton, President of CNN. Reindel arranged the meeting after catching Walton in the hallways at CNN. Reindel and Weasel discussed the concept of The Palestra's business with Walton and how CNN would benefit from the use of The Palestra's content. Walton instructed Weasel and Reindel to meet with David Payne, the head of CNN.com and the individual with decision-making authority on the website's content.

The parties dispute why Payne agreed to meet with Reindel and Weasel. Reindel testified that Payne did not know who he was prior to the meeting. See Reindel Depo., at 61-62. Payne testified that he "knew [Reindel] as an ex-employee of CNN-Espanol and as a freelance producer for Turner Sports on NASCAR.com. I agreed to host a meeting with [Reindel] to review the business and determine if there might be potential for business development with the Palestra." See Payne Aff., ¶ 5. "Prior to our meeting, [Reindel] had met with Lila Eidi, a producer, who was interested in content produced by the Palestra for CNN.com's video service. Based on this fact and [Reindel's] work for Turner, I decided to meet with Mr. Reindel and Mr. Weasel representing the Palestra." Id., ¶ 7.

The parties also dispute whether Reindel made any demands of Weasel or The Palestra before going in to the meeting with Payne. Reindel testified that prior to the Payne meeting, Reindel requested that he receive five percent of the stock of The Palestra in exchange for getting Weasel to Payne who was the decision-maker for CNN.com and could get The Palestra's content on CNN.com. See Reindel Depo., at 75, 80, and 102. Reindel testified that after he and Weasel met with Walton in December 2006, Reindel had a telephone conversation with Weasel in which Reindel said that before he would go ahead with the meeting with Payne, Reindel would need five percent ownership—or 500,000 shares—of The Palestra. Reindel also testified that Weasel said "okay" to this demand. Further, after the meeting with Payne in early January 2007, Reindel testified that when he took Weasel to the airport, Weasel said he was "getting on th[e] plane knowing that [Reindel] ha[d] 5 percent of this company."

Weasel testified that he never promised Reindel a five percent stake in the company, and Reindel did not make any demands of Weasel or The Palestra prior to the Payne meeting. See Weasel Depo., at 72. When asked about whether Weasel would have promised five percent of the company to Reindel, Olvey testified, "Yeah, he might have mentioned that. It didn't jive with me, though, because we had four other guys that were only getting 2 percent and they had already spent two years working."

In any event, in early January 2007, Weasel returned to Atlanta and he and Reindel met with Payne. At the end of the meeting Payne said that Eidi could feature the Gig Guide on CNN's website if she wanted to. In late January 2007, CNN.com began featuring Gig Guide on its website, but did not pay The Palestra for the use of the content.¹

Reindel testified that on the way to the airport after the meeting with Payne, Weasel confessed to Reindel that Weasel did not have the stock to meet the 500,000 shares that he had promised to Reindel before the meeting with Payne. See Reindel Depo., at 77. Reindel further testified that Weasel told him he would get the 500,000 shares even if they had to come out of Weasel's own allocation. Id. at 178. Weasel denies this conversation ever took place. See Weasel Depo., at 82-83. Reindel testified that at this point, he still had the power to stop CNN.com from placing content from The Palestra on its website. See Reindel Depo., at 93.

On January 29, 2007, around the time the Gig Guide was to appear on CNN.com, Weasel wrote Reindel an e-mail stating, "I probably watch out for you—and will watch out for you more than anyone else in this company—including my partner." See Weasel Depo., Exh. 15. Reindel testified that he did not block the placement of the Gig Guide content on CNN.com because he believed Weasel would take care of him like family. See Reindel Depo., at 219.

On January 28, 2007, Weasel sent an e-mail to Reindel asking Reindel to outline what Reindel wanted to earn and what he thought was fair. Weasel also told Reindel that he would take Reindel's proposal to Olvey and they would "take it from there." Reindel responded by writing: "Let me chew on this and give me a couple of days to work on a sliding scale that will work for the both of us." The e-mail starts off a series of back and forths between Reindel and Weasel in an attempt to settle on a compensation package for Reindel.

On February 5, 2007, Reindel sent an e-mail to Weasel with a proposal for $72,000 salary and 500,000 shares. His proposal also included a sliding scale that provided for an increase in salary and equity as revenues increased. Weasel forwarded this e-mail to The Palestra's comptroller, telling her it was a "starting point" and asking her to take a "long look" at it. It is Reindel's position that this proposal incorporated the fact that Weasel had already promised Reindel 500,000 in stock for the CNN introductions. See Reindel Depo., at 117-19 & Exh. 6. Reindel wrote that his proposal would get Reindel to "the million share equity price point." Id.

On February 6, 2007, Weasel sent an e-mail to Reindel telling him that Olvey and the comptroller had "major issues" with the proposal and Weasel would have to get back to Reindel. The two continued to exchange e-mails throughout the month of February 2007. In mid-February 2007, in the midst of these discussions, The Palestra began paying Reindel $3,000 per month consulting fee.

On February 28, 2007, Weasel e-mailed Reindel and stated that The Palestra could offer Reindel one of two...