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BARNSTEAD BROADCASTING CORP. v. OFFSHORE BROADCAST

May 15, 1995

BARNSTEAD BROADCASTING CORPORATION, and BAF ENTERPRISES, INC., Plaintiffs,
v.
OFFSHORE BROADCASTING CORPORATION, Defendant.


PAUL L. FRIEDMAN, United States District Judge


The opinion of the court was delivered by: PAUL L. FRIEDMAN

On October 21, 1994, the Court granted the motion of Barnstead Broadcasting Corporation ("BBC") for preliminary injunction and required Offshore Broadcasting Corporation to withdraw an Informal Objection that it had lodged against an application to assign a television station construction permit from BBC to BAF Enterprises, Inc. ("BAF"). The Court found that BBC and intervenor BAF had demonstrated that they were likely to succeed on the merits of their claim that Offshore had breached a 1990 written contract by which BBC and Offshore agreed (1) to withdraw Objections each had filed against construction permit extension applications that the other had filed with the FCC, (2) to refrain from filing further Objections concerning the construction of their respective stations, and (3) not to interfere "in any way" with the construction of the other's station. *fn1"

 Pending before the Court are eight dispositive or partially dispositive motions. BBC and BAF have moved for partial summary judgment on Count I of their respective complaints against Offshore, which allege breach of the 1990 written contract. BBC and BAF also have moved to dismiss all of Offshore's counterclaims against them, which relate to breach of the 1990 written contract, breach of an alleged 1990 oral agreement, fraud and deceit related to the negotiation and consummation of those two agreements, and interference with business relations. BBC has moved for partial summary judgment on Count I of the Offshore counterclaim which alleges breach of the 1990 written contract and an alleged 1990 oral agreement. Finally, Offshore has cross moved for summary judgment as to each plaintiffs' contract and fraud claims and Count I of its counterclaims.

 The Court heard argument on these motions on May 5, 1995. For the reasons that follow, the Court (1) denies Offshore's motion for summary judgment against BBC as to Counts I and II of BBC's complaint; (2) grants Offshore's motion for summary judgment against BAF as to Count I and denies Offshore's motion as to Counts II and III of BAF's complaint; (3) denies BAF's motion for partial summary judgment on Count I of its complaint; (4) grants BBC's motion for partial summary judgment on Count I of its complaint; (5) grants BBC's motion for partial summary judgment on Count I of Offshore's counterclaim; (6) grants BBC's motion to dismiss Offshore's counterclaims; (7) grants BAF's motion to dismiss Offshore's counterclaims; and (8) denies Offshore's motion for summary judgment as to Count I of it counterclaims.

 I. STANDARD OF REVIEW

 Under Rule 56 of the Federal Rules of Civil Procedure, summary judgment shall be granted if the pleadings, depositions, answers to interrogatories, admissions on file and affidavits show that there is no genuine issue of material fact in dispute and that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). Disputed material facts are those "that might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986).

 "In cases in which the dispositive issue involves the construction of a contract, summary judgment may be appropriate if the provisions of the contract are unambiguous." Davis v. Chevy Chase Financial Ltd., 215 U.S. App. D.C. 117, 667 F.2d 160, 169 (D.C. Cir. 1981); see America First Inv. Corp. v. Goland, 288 U.S. App. D.C. 298, 925 F.2d 1518, 1520 (D.C. Cir. 1991); Farmland Industries, Inc. v. Grain Bd. of Iraq, 284 U.S. App. D.C. 276, 904 F.2d 732, 736 (D.C. Cir. 1990). Furthermore, it is settled that whether a contract term is ambiguous is a question to be determined by the court. Carey Canada, Inc. v. California Union Ins. Co., 708 F. Supp. 1, 4 (D.D.C. 1989). An agreement is considered ambiguous only if it is reasonably susceptible to more than one interpretation. Gustafson v. Max Fish Plumbing & Heating Co., 622 A.2d 450, 452 (R.I. 1993).

 Under Rhode Island law, the Court need not look beyond the language of the contract if it determines that the document's terms are clear and unambiguous. W.P. Assocs. v. Forcier, Inc., 637 A.2d 353, 356 (R.I. 1994). *fn2" The Court, nevertheless, may "consider the situation of the parties and the accompanying circumstances at the time the contract was entered into, not for the purpose of modifying or enlarging or curtailing its terms, but to aid in the interpretive process and to assist in determining its meaning." W.P. Assocs. v. Forcier, Inc., 637 A.2d at 356.

 In considering the motions to dismiss filed by BBC and BAF, the Court must assume the truth of the factual allegations of the counterclaim and liberally construe them in favor of Offshore. It may dismiss the counterclaim for failure to state a claim only if it appears that no set of facts can be proved in support of the claim that would entitle Offshore to relief. Summit Health, Ltd. v. Pinhas, 500 U.S. 322, 325, 114 L. Ed. 2d 366, 111 S. Ct. 1842 (1991); Kowal v. MCI Communications Corp., 305 U.S. App. D.C. 60, 16 F.3d 1271, 1276 (D.C. Cir. 1994). The counterclaim-plaintiff must be given every favorable inference that may be drawn from its factual allegations. Scheuer v. Rhodes, 416 U.S. 232, 236, 40 L. Ed. 2d 90, 94 S. Ct. 1683 (1974). Summary dismissal is only appropriate if it appears beyond a reasonable doubt that no set of facts proffered in support of the counterclaim would entitle the claimant to relief. Martin v. Ezeagu, 816 F. Supp. 20, 23 (D.D.C. 1993); see Haynesworth v. Miller, 261 U.S. App. D.C. 66, 820 F.2d 1245, 1254 (D.C. Cir. 1987).

 II. ANALYSIS

 Because they raise threshold questions, the Court first considers Offshore's motions for summary judgment related to the 1990 written contract. As to BBC, Offshore maintains that the contract has been fully performed and that BBC's claims therefore are moot. As to BAF, Offshore maintains that it lacks standing to enforce Offshore's obligations under the 1990 written contract. The relevant undisputed facts are that, pursuant to the Court's October 21, 1994 Order, Offshore withdrew its Informal Objection to BBC's permit assignment application, BBC assigned its construction permit to BAF by written agreement on December 30, 1994, and there is no oral or written agreement between BAF and BBC that assigned to BAF BBC's interest in the 1990 written contract with Offshore.

 A. Mootness

 The mootness doctrine limits the Court's jurisdiction to "present live controversies of the kind that must exist if we are to avoid advisory opinions on abstract propositions of law." British Caledonian Airways Ltd. v. Bond, 214 U.S. App. D.C. 335, 665 F.2d 1153, 1157 (D.C. Cir. 1981) (citations omitted). Offshore contends that it has fully performed its obligations under the 1990 written contract, and that BBC no longer has an interest in Offshore's conduct related to BAF's construction permit. Accordingly, it maintains that "[a] determination . . . of the legal issues tendered by the parties is no longer necessary" to avoid the alleged injury. DeFunis v. Odegaard, 416 U.S. 312, 317 (1974). BBC responds that, although its construction permit has been assigned to BAF, it retains an interest in having BAF construct the television station unhindered by Offshore because the permit assignment agreement guarantees William Barnstead, the owner of BBC, the valuable opportunity to produce a weekly public affairs show on BAF's station for five years. If the station is never built, Mr. Barnstead will lose this opportunity for which he bargained.

 The Court recognized this interest in its opinion granting the preliminary injunction, finding that there would be no adequate remedy at law for the loss of the opportunity to produce a public affairs program. Barnstead Broadcasting Corp., et al., v. Offshore Broadcasting Corp., 865 F. Supp. at 7-8. This interest remains a live one, at least until the television station is constructed. *fn3" Offshore's Motion for summary judgment as to Count I of BBC's complaint therefore is DENIED. *fn4"

 B. Standing

 Offshore argues that BAF lacks standing to enforce the 1990 written contract because BAF is neither an assignee nor a third-party beneficiary of the contract. It is undisputed that there is no oral or written agreement assigning BBC's interest in the 1990 written contract to BAF. BAF points out, however, that the 1990 written contract is expressly binding on "successors and assigns," and what it terms the "relevant interest" in this case, the permit, has been assigned. Citing the Restatement, BAF argues that finding it to be an intended beneficiary of the contract "is appropriate to effectuate the intention of the parties" and "the ...


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