Television Capital v. Paxson Comm., No. 04-CV-1329.

Decision Date16 March 2006
Docket NumberNo. 04-CV-1329.
Citation894 A.2d 461
PartiesTELEVISION CAPITAL CORPORATION OF MOBILE, Appellant, v. PAXSON COMMUNICATIONS CORPORATION and Dow, Lohnes & Albertson, PLLC, John R. Feore and Michael D. Basile, Appellees.
CourtD.C. Court of Appeals

Richard I. Chaifetz, Columbia, MD, for appellant.

Lynn E. Calkins, Washington, with whom Philip T. Evans was on the brief, for appellee Paxson Communications Corporation.

Phillip J. Harvey for appellees Dow, Lohnes & Albertson, PLLC, John R. Feore and Michael D. Basile.

Before FARRELL and FISHER, Associate Judges, and PRYOR, Senior Judge.

PRYOR, Senior Judge:

This litigation stems from a contractual dispute between appellant Television Capital Corporation of Mobile ("TCCM") and appellee Paxson Communications Corporation ("Paxson"). On the basis of an unpaid promissory note in which TCCM was the maker, and Paxson the payee, and notwithstanding an array of defenses asserted by appellant, a partial summary judgment was entered against appellant. The trial judge also dismissed four of appellant's counter-claims, without prejudice, because they were deemed premature at the time of the dismissal order. Lastly, the trial judge dismissed a tort action against appellees Dow, Lohnes & Albertson, PLLC, et al. ("DLA") on the grounds of an evidentiary deficiency. Upon review of these questions, we conclude that the trial judge did not commit reversible error, and therefore affirm.


On January 13, 1998, TCCM and Paxson executed a Letter Agreement that provided that TCCM would attempt to acquire the exclusive rights for Paxson to obtain a construction permit for an analog television station to operate on Channel 61 in Mobile, Alabama. TCCM, in 1996, had previously filed an application with the Federal Communications Commission ("FCC") to obtain this permit. Two other companies, who are not parties in this matter, had also previously applied for the construction permit for that frequency. The Letter Agreement provided that Paxson would lend TCCM up to $6.0 million to bid at a private auction for the channel among all of the applicants or acquire exclusive rights to the channel via a private settlement agreement with the two other competing applicants. If TCCM was the successful bidder at auction or obtained the consent of the other two competing applicants to relinquish their rights to the construction permit, Paxson would pay TCCM $750,000 plus the difference between the winning bid and $6.0 million.

On January 29, 1998, TCCM and the two competing applicants executed a Settlement Agreement that would leave TCCM as the sole applicant for the construction permit in return for the payment of $400,000 to each of the other two applicants. The terms of the Settlement Agreement further stated that TCCM would place $800,000 into an escrow account pending the FCC's issuance of a final order granting the construction permit. As provided by the terms of the Letter Agreement, Paxson loaned TCCM $800,000, which was placed into the escrow account. TCCM executed a Promissory Note, the terms of which are governed by Florida law, agreeing to repay Paxson the $800,000 by January 29, 2000. Interest accrued on the note at the prime rate as listed in the WALL STREET JOURNAL. If the Promissory Note was not paid when due, interest accrued at a higher rate equal to the lower of eighteen percent or the highest rate allowed by law.

At or near the time that these documents were executed, the FCC issued a ruling that prohibited the grant of construction permits for any new television stations that would operate on Channels 60 through 69 throughout the United States. As a result, Paxson sought to amend TCCM's application to substitute a construction permit for Channel 50 in lieu of Channel 61. FCC regulations, however, did not allow the filing of such amendments until the FCC permitted such filings for a brief interval in July 2000. The FCC ultimately did not approve this amended application because of conflicts with another broadcaster's plans for use of that frequency. Further delays ensued while Paxson tried to find a substitute channel that would satisfy its needs and still comply with FCC regulations.1

On April 13, 2001, Paxson sent a letter to TCCM demanding the repayment of the Promissory Note including the $800,000 principal amount, accrued interest at the prime rate through the maturity date and default interest at the rate of eighteen percent for the period commencing after the maturity date. Paxson subsequently sent another demand letter on May 24, 2001 after TCCM failed to make any payments as required by the Promissory Note.

On February 15, 2002, Paxson filed an action in the Superior Court of the District of Columbia against TCCM alleging that TCCM had failed to pay the Promissory Note when it became due. On March 18, 2002, TCCM filed its answer and counterclaims.2 On April 9, 2004, Paxson moved for summary judgment with respect to the non-payment of the Promissory Note and dismissal of TCCM's counterclaims as unripe for consideration based on the FCC's inaction regarding the application for the Channel 18 construction permit. The trial judge heard oral arguments from the parties on May 20, 2004 and issued a final order on September 2, 2004 granting Paxson's motion for summary judgment and dismissing TCCM's counterclaims without prejudice because, without final action by the FCC, they were not ready for final adjudication. The trial judge denied TCCM's motion to amend its order on September 27, 2004.

TCCM also filed a third-party complaint against the law firm of Dow, Lohnes & Albertson, PLLC and three of its attorneys, John R. Feore, Michael D. Basile, and Scott S. Patrick (collectively "DLA") for malpractice in connection with DLA's role in the transaction involving TCCM and Paxson, which included among other tasks, the preparation of the Promissory Note.3 During discovery, DLA opposed TCCM's requests for answers to interrogatories and documents citing attorney-client privilege. The trial judge, with some reservation, denied TCCM's pre-trial motion to compel discovery. DLA filed two motions for summary judgment asserting that TCCM's failure to provide an expert witness was fatal to its malpractice claims. The judge denied both motions and, sua sponte, severed the third-party claims for a separate trial.

A non-jury trial was held on September 29-30, 2003. At the close of TCCM's evidence, DLA moved for judgment pursuant to Super. Ct. Civ. R. 52(c). After hearing argument from both parties, the judge granted DLA's motion because TCCM did not: (1) offer expert testimony to establish the standard of care required to prove negligence; and (2) demonstrate that it had suffered any damages. The judge issued an order dismissing TCCM's complaint against DLA on October 7, 2003. This timely appeal followed.

A. Standard of Review

"Summary judgment is appropriate only when the record, viewed in the light most favorable to the non-moving party, establishes that there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law." Taylor v. Akin, Gump, Strauss, Hauer & Feld, 859 A.2d 142, 146 (D.C.2004) (internal quotations and citations omitted). Any inferences that can be reached from subsidiary facts are resolved against the moving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). This court applies "the same substantive standard as the trial court" and "conduct[s] an independent review of the record." Taylor, 859 A.2d at 146.

B. Discussion

TCCM asserts the trial court erred in granting summary judgment to Paxson because: (1) the Letter Agreement and the Settlement Agreement modified the maturity date of the Promissory Note; (2) the Promissory Note was unconscionable; (3) Paxson breached its implied duty of good faith and fair dealing by seeking repayment of the Promissory Note; and (4) Paxson waived its right to demand repayment of the Promissory Note by failing to withdraw from the FCC proceedings for award of the construction permit.

1. Modification of the Maturity Date of the Promissory Note

TCCM argues that Paxson was not entitled to collect on the Promissory Note because its two-year term was inconsistent with the terms of the Settlement Agreement, an agreement related to TCCM's acquisition of the construction permit rights for Paxson. The Settlement Agreement provided that the parties, TCCM and the two other applicants for Channel 61, could terminate the agreement within three years from its date of execution if the FCC had not issued a final order granting TCCM's application for the construction permit. To support its position that the Settlement Agreement was a defense to its failure to pay the Promissory Note, TCCM relies on provisions of the Uniform Commercial Code, adopted by the state of Florida. The relevant code provision states:

Subject to applicable law regarding exclusion of proof of contemporaneous or previous agreements, the obligation of a party to an instrument to pay the instrument may be modified, supplemented, or nullified by a separate agreement of the obligor and a person entitled to enforce the instrument, if the instrument is issued or the obligation is incurred in reliance on the agreement or as part of the same transaction giving rise to the agreement. To the extent an obligation is modified, supplemented, or nullified by an agreement under this section, the agreement is a defense to the obligation.

FLA. STAT. ch. 673.1171 (emphasis added).

TCCM's argument has no merit. The Letter Agreement between Paxson and TCCM was executed prior to the execution of the Promissory Note and the Settlement Agreement and thus never referenced either of these documents. Although Section 3 of the Promissory Note required all principal and interest to be "prepaid...

To continue reading

Request your trial
11 cases
  • Hickey v. Scott
    • United States
    • United States District Courts. United States District Court (Columbia)
    • September 16, 2010
    ..."does not per se[ ] 'constitute a breach of the attorney's common law fiduciary duty to the client.' " TV Capital Corp. v. Paxson Commc'ns Corp., 894 A.2d 461, 469 (D.C.2006) (quoting Griva, 637 A.2d at 846-47). Nonetheless, under D.C. law "a violation of the Code of Professional Responsibi......
  • Jacobsen v. Oliver
    • United States
    • United States District Courts. United States District Court (Columbia)
    • May 16, 2008
    ...duty that requires disgorgement. See Hendry v. Pelland, 73 F.3d 397, 401, 402 (D.C.Cir.1996); Television Capital Corp. v. Paxson Communications Corp., 894 A.2d 461, 469-70 (D.C. 2006). Rather, certain kinds of violations of certain ethical rules may demonstrate that an attorney has breached......
  • Murray v. Wells Fargo Home Mortg., No. 06-CV-1383.
    • United States
    • Court of Appeals of Columbia District
    • July 17, 2008
    ...substantive standard as the trial court' and `conduct[s] an independent review of the record.'" Television Capital Corp. of Mobile v. Paxson Commc'ns Corp., 894 A.2d 461, 466 (D.C. 2006) (internal citation B. Appellants' Individual Claims The plaintiffs' complaint contains five counts, each......
  • North American Catholic Educ. Programming Found., Inc. v. Womble Carlyle Sandridge & Rice, PLLC, 09–cv–1167 (RCL).
    • United States
    • United States District Courts. United States District Court (Columbia)
    • August 5, 2011, a breach of that standard, and a causal relationship between the violation and harm alleged. Television Capital Corp. of Mobile v. Paxson Commc'n Corp., 894 A.2d 461, 469 (D.C.2006). The present motions only deal with the third requirement: the causal link between Womble's late filing......
  • Request a trial to view additional results
1 books & journal articles

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT