America's Collectibles Network, Inc. v. Mig Broadcasting Group, Inc.

330 F. App'x 81
CourtCourt of Appeals for the Sixth Circuit
DecidedMay 28, 2009
Docket08-5486, 08-5490
StatusUnpublished
Cited by3 cases

This text of 330 F. App'x 81 (America's Collectibles Network, Inc. v. Mig Broadcasting Group, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
America's Collectibles Network, Inc. v. Mig Broadcasting Group, Inc., 330 F. App'x 81 (6th Cir. 2009).

Opinion

GRIFFIN, Circuit Judge.

Defendants MIG Broadcasting Group, Inc. (“MIG”) and its Chief Executive Officer, Guenter Marksteiner (“Marksteiner”), appeal the district court’s judgment entered in favor of plaintiff, America’s Collectibles Network, Inc. (“ACN”), following a two-day bench trial. We affirm the judgment in plaintiffs favor against defendant MIG, but reverse the judgment against Marksteiner. We dismiss as moot the cross-appeal.

*82 I.

Guenter Marksteiner is the President and CEO of MIG Broadcasting Group. 1 MIG operates WHDT-DT, a high-definition television station in West Palm Beach, Florida. According to defendants, WHDT-DT (“WHDT”) was the first high-definition television station in the United States. Marksteiner personally holds the Federal Communications Commission (“FCC”) broadcast license for WHDT.

ACN is a Tennessee corporation with headquarters in Knox County, Tennessee. ACN does business as the Jewelry Television Network (“JTV”), a home shopping-network that sells jewelry and gemstones, among other things, on television. ACN contracts with television stations across the United States to carry its JTV broadcast.

In 2002, ACN contacted MIG because it wanted WHDT to carry its JTV broadcast in the West Palm Beach market. The parties executed an agreement, dated August 21, 2002 (“2002 Agreement”) that paid MIG an hourly rate for its JTV air time. The 2002 Agreement expired on September 1, 2003.

The 2002 Agreement was lucrative for both parties, despite MiG’s initial skepticism regarding JTV’s success in the West Palm Beach market. The parties decided to renegotiate the 2002 Agreement midterm, and they signed a new agreement on April 24, 2003 (“2003 Agreement”). The 2003 Agreement was made retroactive to April 1, 2003, and superseded the 2002 Agreement.

The 2003 Agreement contained a “non-cancelable clause,” which specified that neither party could terminate the contract, unless it provided written notice of cancellation by certified mail within thirty days of the contract’s yearly automatic renewal date, commencing March 1, 2004. On March 9, 2004, Marksteiner, who negotiated the 2002 and 2003 Agreements on MiG’s behalf, e-mailed Andy Caldwell (“Caldwell”) at ACN. Caldwell managed ACN’s affiliate contracts. In his e-mail, Marksteiner requested that the parties renegotiate the 2003 Agreement to reflect the increased cost of WHDT air time. Over the next week, the parties exchanged e-mails regarding new pricing for WHDT air time. On March 24, 2004, the parties signed a new agreement (“2004 Agreement”).

Similar to the 2003 Agreement, the 2004 Agreement contained a “non-cancelable clause,” providing that neither party could terminate the contract unless it gave written notice at least thirty days prior to the contract’s automatic renewal date of April 1st. Unlike the 2003 Agreement, however, the 2004 Agreement contained a modified notice provision that was specifically negotiated by both parties. The new notice provision required either party to provide notice of termination “in writing, sent by certified mail or return receipt requested, hand delivery, or other delivery service that provides written delivery verification ....” In early 2005, neither MIG nor ACN sought to renegotiate the 2004 Agreement, and it automatically renewed on April 1, 2005, for an additional one-year term.

In January 2006, Patsy Harris (“Harris”), an ACN employee, e-mailed WHDT’s station manager, Brian Content (“Content”), to complain that WHDT was not broadcasting JTV’s signal in accordance with the 2004 Agreement. Harris requested a “preemption credit” from WHDT, namely, a credit on ACN’s monthly bill for unrealized JTV air time on WHDT.

Marksteiner personally called Harris to discuss her e-mail and explained to her *83 that MiG’s agreement with ACN did not provide for preemption credits unless JTV sales dropped below $280,000. He also followed-up their telephone conversation with an e-mail on January 25, 2006, explaining in greater detail the payment schedule contained in the 2004 Agreement. Harris disagreed with Marksteiner’s assertion that the $280,000 floor nullified any applicable preemption credit.

On January 30, 2006, Marksteiner sent an e-mail to Ms. Harris, which stated, in pertinent part:

The ACN contract with WHDT is due to expire very shortly. In the past, the old contract has just been allowed to automatically renew even though it contained ambiguous holdover language. Since the preemption issue has not come up before, no one cared about it. Since it is being raised now, any renewal contract will have to contain new and appropriate language.
The person in charge of affiliate agreements should contact me immediately to discuss the future relationship with WHDT.

Harris Bagley, (“Bagley”) an ACN executive responsible for ACN’s programming, informed Patsy Harris that he was not concerned about preemption credits “because ACN enjoyed its relationship with MIG.” After discussing the issue with Bag-ley, Patsy Harris e-mailed the following communication to Marksteiner on January 31, 2006:

Forget it. All I asked was that someone explains [sic] why additional preemp-tions had occurred that had not occurred before. I didn’t get an answer so I suggested a credit. That gets peoples [sic] attention wherever you go. Burt Bagley will contact you regarding the contract. To the best of my knowledge both parties have had little to complain about in regards to the contract.

Burt Bagley (“Burt”) is Harris Bagley’s son. Burt, who was transitioning into Caldwell’s position and therefore responsible for the MIG contract, asked his father to handle the MIG negotiations because of the importance of the ACN/MIG relationship. Harris Bagley agreed. However, he did not follow up with Marksteiner because he saw no need to discuss preemption credits.

On February 3, 2006, Marksteiner sent an internal e-mail to Roane Cross (“Cross”), an accountant and director at MIG, stating that he had not heard from Bagley. According to Marksteiner, he was ready to work on a new contract and emailed Cross because he wanted her to be involved with the renegotiations.

It is undisputed that between January 30, 2006, and March 9, 2006, MIG did not provide written notice to ACN stating an intent to terminate the 2004 Agreement. On March 9, 2006, less than thirty days before the scheduled automatic renewal date of the 2004 Agreement, Marksteiner sent Caldwell the following e-mail outlining his proposed changes:

[T]he annual contract with MIG for airtime in the West Palm Beach, Florida market is due to expire this month.... At this time, MIG desires that any renewal contract be simplified to operate on a commission-only basis.
The complex terms and procedures contained in the Affiliation Agreement have become burdensome and need to be replaced by a completely redrafted agreement based on a straight sales commission computed from JTV net sales.

Caldwell forwarded Marksteiner’s e-mail to Bagley. Bagley, after conducting internal JTV sales research, responded to Marksteiner via e-mail on March 13, 2006, stating:

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