Onyx Films LLC v. Koch

523 F.Supp.3d 799

ONYX FILMS LLC, et al., Plaintiffs,

v.Susan KOCH, Defendant.

Case No. 1:19-cv-1591

United States District Court, E.D. Virginia, Alexandria Division.

Signed March 4, 2021

Mary Lynn Tate, Tate Law PC, Abingdon, VA, for Plaintiffs.

Max Francis Maccoby, Washington Global Law Group, PLLC, Washington, DC, Thomas Thor Cummins, Potomac Litigation PLLC, Fairfax, VA, Jeffrey Arnold Breit, Kevin Biniazan, Breit Cantor Grana Buckner, PLLC, Virginia Beach, VA, for Defendant.

ORDER

Liam O'Grady, United States District Judge

Before the Court is Plaintiffs’ "Motion to Strike Defendant's Summary Judgment Brief Exhibit 5" pursuant to Federal Rule of Evidence 408(a). See Dkt. 89. After due consideration, the Court GRANTS Plaintiffs’ motion.

The exhibit in question is an email from Plaintiff Marquez to Defendant Koch, and reads as follows:

Susan,

Dario is recommending that I forgo my fees and ask for an additional credit in the film. As you know, I had plan to donate my fees to create a fund to provide music therapy tuition to families in need of financial assistance. Dario wants to do this on our own.

If you think this idea provides a viable solutions [sic], your lawyer or my lawyer can draft an agreement.

The credits read now

1) The credits will read as "Directed by" Susan Koch "Produced by" J. Wendy Thompson Marquez. Thompson-Marquez's credit will immediately follow the "Directed by"

2) The opening production company presentation credit will read Cabin Films Presents, followed by a company presentation credit that reads In Association with Onyx Media Films. Both Cabin Films and Onyx Media Films recognize that a distribution company and/or network may need to have the opening title credit. In that case, Cabin Films and Onyx Media Films will follow these credits in this order.

Id. at 1–2.

Federal Rule of Evidence 408(a) provides:

(a) Prohibited Uses. Evidence of the following is not admissible—on behalf of any party—either to prove or disprove the validity or amount of a disputed claim or to impeach by a prior inconsistent statement or a contradiction:

(1) furnishing, promising, or offering—or accepting, promising to accept, or offering to accept—a valuable consideration in compromising or attempting to compromise the claim; and

(2) conduct or a statement made during compromise negotiations about the claim—except when offered in a criminal case and when the negotiations related to a claim by a public office in the exercise of its regulatory, investigative, or enforcement authority.

Fed. R. Evid. 408(a).

Defendant argues that the disputed email does not fall within the ambit of Rule 408(a) because the email "did not seek to resolve any disputed claim ." See Dkt. 90, at 2 (emphasis in original). Defendant avers that Plaintiffs never filed any claims for unpaid fees and that Plaintiffs voluntarily relinquished entitlement to those fees regardless, so "[t]here is absolutely no disputed claim between the parties on these points." See id.

The Court disagrees with Defendant that Plaintiff Marquez's email was not seeking to "resolve any disputed claim." Dkt. 90, at 2 (emphasis added). The email makes clear that, at the time of its sending, Marquez believed that she was entitled to unpaid fees, and was willing to forgo those fees for "valuable consideration" (i.e., additional film credits). See id. at 1. In other words, Marquez was offering a compromise to Defendant Koch to avoid resort to judicial intervention in a dispute over an amount purportedly owed to her. See Fed. R. Evid. 408(a)(1) ; Fiberglass Insulators, Inc. v. Dupuy , 856 F.2d 652, 654 (4th Cir. 1988). Marquez's suggestion that the Parties’ lawyers draft a resolution, assuming her proposed solution was amenable to Koch, is a clear signal that Rule 408(a) applies.

Insofar as Defendant argues that Rule 408(a) should not apply because the disputed claim referenced in Marquez's email was not asserted in Plaintiffs’ operative complaint, Defendant is incorrect as a matter of law. Rule 408 encourages "honest attempts to settle controverted claims without resorting to expensive and time consuming litigation." Bradbury v. Phillips Petroleum Co. , 815 F.2d 1356, 1363 (10th Cir. 1987) ; see also Dupuy , 856 F.2d at 654. To accomplish this aim, courts exclude from evidence settlement negotiations over disputed claims, even if those claims are not thereafter asserted in litigation. See Dupuy , 856 F.2d at 654 (citing Branch v. Fidelity & Cas. Co. of New York , 783 F.2d 1289, 1294 (5th Cir. 1986) ) ("[T]he spectre of a subsequent use to prejudice a separate and discrete claim is a disincentive which Rule 408 seeks to prevent. ") (emphasis added); see also Lyondell Chem. Co. v. Occidental Chem. Corp. , 608 F.3d 284, 298 (5th Cir. 2010) (observing that the definition of a "claim" for Rule 408 purposes is not a literalism that turns on what a party may have pleaded but is "fact-specific, and tethered to the rationales underlying the rule"); Affiliated Mfrs., Inc. v. Aluminum Co. of Am. , 56 F.3d 521, 527 (3d Cir. 1995) ("[T]he Rule 408 exclusion applies where an actual dispute or a difference of opinion exists, rather than when discussions crystallize to the point of threatened litigation."); Atmosphere Hospitality Mgmt. v. Shiba Investments , 158 F. Supp. 3d 837, 844 (D.S.D. 2016) (citing 23 Charles Alan Wright & Arthur R....