Whipple v. Utah

• Decision Date: 24 August 2011
• Docket Number: Case No. 2:10-CV-811-DAK
• Parties: DALE E. WHIPPLE, Plaintiff, v. STATE OF UTAH, et al., Defendants.
• Court: U.S. District Court — District of Utah

DALE E. WHIPPLE, Plaintiff,

v.STATE OF UTAH, et al., Defendants.

Case No. 2:10-CV-811-DAK

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH CENTRAL DIVISION

Dated: August 24, 2011

REPORT AND RECOMMENDATION

Magistrate Judge Samuel Alba

Before the court are several motions: (1) a motion to dismiss filed by Defendants Utah.com, LC ("Utah.com") and Ryan Kirby (collectively "Utah.com Defendants") pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure (Doc. 6); (2) a motion to dismiss filed by Defendants Utah Office of Tourism and Leigh van der Esch, and joined by Defendant State of Utah (collectively "Utah Tourism Defendants"), pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure (Docs. 9, 23); and (3) a motion to dismiss and/or for summary judgment filed by Defendants Millard County, Millard County Tourism Committee, Richard Waddingham, LeRay Jackson, Daron Smith, Kathy Walker, John Cooper, Craig Greathouse, Debra Haveron, Dick Flones, Roger Killpack, Evelyn Warnick, DonFullmer, Gayle Cluff, Tonya Quackenbush, and Linda Gillmore (collectively "Millard County Defendants") (Doc. 32).

Having carefully reviewed the parties' pleadings and the record in this case, and having heard oral arguments on Defendants' motions to dismiss and for summary judgment, the court recommends that all three of Defendants' motions be granted, and that this case be dismissed.

BACKGROUND¹

When considering a motion to dismiss for failure to state a claim upon which relief may be granted, see Fed. R. Civ. P. 12(b)(6), the court should "assume the [factual] allegations are true." Christy Sports, LLC v. Deer Valley Resort Co., Ltd., 555 F.3d 1188, 1191 (10th Cir. 2009). In reviewing a motion for summary judgment, the court views the evidence in the light most favorable to the non-moving party. See Skrzypczak v. Roman Catholic Diocese of Tulsa, 611 F.3d 1238, 1243 (10th Cir. 2010).

In 1983, Millard County sent its Transit Room Tax receipts ("TRT") to "Panoramaland," then the Utah Office of Tourism's official six-county travel region for central Utah. (Doc. 1, at 6.) That same year, Plaintiff developed his own tourism plan "hoping it would develop into a source of much-needed revenue," presented that plan to the Millard County Commission andPanoramaland, and provided evidence showing that Millard County's contribution of its TRT funds to Panoramaland was counterproductive. (Id., at 6-7.)

In July 1984, Plaintiff independently published the first edition of a publication he entitled Discovering Millard County ("DMC"), "with no involvement by Millard County." (Id. at 7.) DMC was printed on newsprint and given away as a free newspaper insert. (Id.) Plaintiff also distributed DMC through local business and visitors centers in Fillmore and Delta, Utah. (Id.)

Millard County withdrew from its participation in Panoramaland. In October 1984, the Millard County Commission began developing a tourism program and appointed Glen Swalberg to organize the Millard County Tourism Committee ("MCTC").² (Id.) In August 1986, Chairman Swalberg asked Plaintiff to provide copies of DMC for information packets being sent out by local chambers of commerce. (Id.) Plaintiff agreed, contingent upon Millard County paying for the extra costs of printing. (Id.) Plaintiff did not "markup" the printing costs, but did a "straight-through pass-along of the exact cost of printing." (Id.)

Over the next 6 years, Plaintiff continued to publish and distribute DMC, occasionally making minor changes such as adding"spot-colors of ink" and "full-color photos" at the request of the MCTC, with the MCTC paying for the extra printing costs.

(Id. at 7-8.) For example, in 1992, the MCTC requested that full-color photographs be added to DMC, agreeing to pay the cost increase (id. at 8).

In August 1992, Plaintiff met with Swalberg and Millard County Commissioner Overson "to work out an agreement concerning DMC." (Id.) Before that time, DMC "paid the printing costs for only those copies that they distributed in information packets, or at trade shows or fairs, and they paid for color separations of photos that they requested"; however, based on the increased distribution of DMC, it "no longer made sense" to track the photos and copies separately. As a result, the MCTC and Plaintiff entered into a "new cooperative agreement," id. (emphasis in original). That agreement included the following details:

a. The MCTC would provide budgeted funds in "advance to pay for the cost of printing" for all copies of the DMC, and would reimburse for certain shipping costs;

b. Plaintiff "would bear all production costs";

c. The MCTC would "provide letters of official support, urging local businesses and other concerned interests to advertise in DMC"; and

d. The MCTC "would provide storage space and assist in distribution as requested by the Plaintiff, but the bulk of the distribution would be done by the Plaintiff. LocalChambers of Commerce would stockpile and distribute copies of DMC at their visitor centers, and serve as depots for local businesses and event organizers to draw from."

(Id. at 8-9.)

In 1993, the MCTC received a request from another journalist to present a competitive bid for the tourism publication, and the MCTC purchased a tourism magazine from the Millard County Chronicle rather than DMC. In the meantime, Plaintiff continued publishing DMC without Millard County funding and "maintaining his commitments to his advertisers to publish annually." (Id. at 9 (emphasis in original).) After conducting a poll of businesses indicating on overwhelming preference for DMC, the MCTC again asked Plaintiff if "DMC can become the official tourism publication for the County." (Id. (emphasis in original).) Plaintiff agreed, "contingent upon the establishment of a long-term agreement being put into effect." (Id.) Plaintiff requested a written contract. The MCTC explained it could not do that as TRT funds that were used for DMC were different than the County's general budget funds; however, a "verbal agreement was made, fair consideration was given, and agreements were lived by for a decade and a half." (Id. at 10 (emphasis original).)

As set forth in Plaintiff's complaint, the terms of the "indefinite" long-term agreement included the following:

1. "Annual publishing of at least 10,000 copies with the County paying for the cost of printing (in the same manner as in the past)and certain shipping expenses (10,000 copies being the lowest number printed in the past)";

2. "Production expenses, other than printing and shipping, being paid for by the Plaintiff";

3. "Copyright, ownership, production design, and editorial control" being the Plaintiff's, with "[c]ontent suggestions [being] welcome from MCTC members, advertisers, and all other concerned citizens," but only incorporated into DMC "as space and time allow, as determined by the Plaintiff";

4. "Distribution [would be] the responsibility and the right of Plaintiff, but Plaintiff [would] coordinate and confer with the MCTC, Chambers of Commerce, and all other interested parties to be sure distribution [was] being done in the best manner possible. Plaintiff [would] provide a distribution plan or report when requested - based on annual distribution of all copies printed" to "emphasize local and regional distribution in a manner that would assure that copies would remain available year-round, instead of months prior to reprinting where all supplies had already been exhausted";

5. "Other tourism projects of the Plaintiff's [would] be officially supported and startup costs provided from TRT money as well";

6. "Length of contract [would] be indefinite to allow the Plaintiff the time to prepare and publish the other tourism projects, and turn a profit," while "Millard County will receive immediate benefit and savings by the Plaintiff providing printed copies of DMC to be used as Millard County's official tourism publication at a greatly discounted rate over what it would have cost to have printed on their own." Plaintiff would have high initial expenses, which would be recouped,and a profit eventually made, through other tourism projects.

(Id. at 10-11 (emphasis in original).) Thus, Plaintiff alleges that he incurred production expenses for design and layout, collected the tax revenue from Millard County, and sold advertising. (Id. at 10-11.)

In 1995, due to personal issues, Plaintiff unilaterally placed DMC on hold without making any alternative plans for DMC. Plaintiff resumed printing DMC in 1996. (Doc. 1, at 11-12.) Between 1995 and 2000, Millard County assumed storage and

distribution of DMC. (Id.)

Over the next five years, the number of magazines ordered by the MCTC increased and Millard County paid for, stored, and distributed DMC. (Id. at 12.) In 2000, Plaintiff took over storage of DMC. (Id.) The MCTC also asked that DMC be improved and changed to booklet format. (Id.) The MCTC also increased its order to 30,000 copies. (Id.)

On March 14, 2001, Plaintiff made a presentation at a regularly scheduled MCTC meeting and proposed that he be allowed to expand the advertising in DMC, which would also allow him to expand the size of DMC from 28 to 34 pages, and increase several other proposed tourism-related magazines, maps, CD's, and a website. It was determined that Plaintiff was to report back to the committee on the cost of printing 50,000 to 200,000 magazines for the Olympics with a glossy cover, and report on the cost ofupgrading to a glossy cover by the next meeting. (Doc. 33, Ex. 10 (MCTC minutes), at 2-3.) The MCTC continued to participate in the State of Utah Panoramaland and pay for Panoramaland brochures. (Id. at 4.)

On April 11, 2001, the MCTC approved the purchase of 100,000 copies of a 32-page magazine. (Doc. 33, Ex. 11 (MCTC minutes).) On August 8, 2001, the MCTC noted the cost of 100,000 copies of DMC was $14,073.00. (Doc. 33, Ex. 12 (MCTC minutes), at 2.)

On March 13, 2002, the MCTC discussed the fact that DMC needed to be...