Radio Networks, LLC v. Baisden Enters., Inc., Civil Action No. 3:14-cv-1860-L

RADIO NETWORKS, LLC, Plaintiff/Counter-Defendant, v. BAISDEN ENTERPRISES, INC., and MICHAEL BAISDEN, Defendants/Counter-Plaintiffs, v. CUMULUS MEDIA, INC., Counter-Defendant.

Civil Action No. 3:14-cv-1860-L

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION

June 20, 2017

AMENDED MEMORANDUM OPINION AND ORDER

On June 13, 2017, the court issued a memorandum opinion and order in which it, among other things, granted in part and denied in part Plaintiff/Counter-Defendant Radio Networks, LLC and Counter-Plaintiff Cumulus Media, Inc.'s Motion for Partial Summary Judgment; and denied Defendants/Counter-Plaintiffs Baisden Enterprises, Inc. and Michael Baisden's Motion for Summary Judgment. See Mem. Op. & Order (Doc. 194). On June 14, 2017, Baisden Enterprises, Inc. ("BEI") and Michael Baisden ("Baisden") (sometimes collectively,"Defendants") filed their twenty-two page Emergency Motion for Reconsideration of Limited Summary Judgment Findings and Motion for Oral Argument (Doc. 196) ("Motion for Reconsideration"), contending that the court erred in granting summary judgment on Counts One through Three of their Counterclaim in favor of Radio Networks, LLC ("Radio Networks") and Cumulus Media, Inc. ("Cumulus") (sometimes collectively,"Plaintiffs").¹ In support, BEI and Baisden argue that "certain findings in the SJ Order mistakenly rely on incorrect facts and/or law." Mot. for Reconsideration 1.² After considering the motion, related briefing, competent summary judgment evidence, and applicable law, the court concludes that reconsideration of its June 13, 2017 memorandum opinion and order is not warranted with respect to Counts One and Three, but it is warranted with respect to Count Two of BEI and Baisden's Counterclaim. Accordingly, the court grants in part and denies in part the Motion for Reconsideration.

With respect to Counts One and Three, notwithstanding BEI and Baisden's arguments in the Motion for Reconsideration, the court concludes that they nevertheless have failed to raise a genuine dispute of material fact. BEI and Baisden's brief supporting reconsideration on these counterclaims is replete with arguments previously made in their earlier opposition to Radio Networks and Cumulus's Motion for Partial Summary Judgment. The court already decided these issues in a lengthy memorandum opinion and order in which it carefully considered the parties' respective arguments and the extensive record presented on summary judgment, as well as applicable law. Thecourt set forth its reasoning in its memorandum opinion and order, and the court is satisfied that it correctly decided Radio Networks and Cumulus's Motion for Partial Summary Judgment in granting summary judgment in their favor on Counts One and Three of BEI and Baisden's Counterclaim.³ Otherwise stated, no argument advanced by BEI and Baisden in their Motion for Reconsideration persuades the court that its prior decision with respect to these two counterclaims is incorrect.

With respect to Count Two, however, the court concludes that BEI and Baisden have established a genuine dispute of material fact as to whether Radio Networks and Cumulus breached the parties' November 2008 Agreement. In light of the court's decision to grant the Motion for Reconsideration with respect to Count Two of BEI and Baiden's Counterclaim, the court hereby vacates its June 13, 2017 memorandum opinion and order and substitutes this amended memorandum opinion and order in its place.⁴

Before the court are: Defendants/Counter-Plaintiffs Baisden Enterprises, Inc. and Michael Baisden's Motion for Summary Judgment (Doc. 121), filed November 18, 2016; Plaintiff/Counter-Defendant Radio Networks, LLC and Counter-Plaintiff Cumulus Media, Inc.'s Motion for PartialSummary Judgment (Doc. 168), filed November 18, 2016; Radio Networks, LLC and Cumulus Media, Inc.'s Motion to Exclude Testimony of C.D. Shamburger, Jr. (Doc. 125), filed November 18, 2016; and Radio Networks, LLC and Cumulus Media, Inc.'s Motion to Exclude Testimony of Spencer Brown, Esq. Relating to Audits (Doc. 128), filed November 18, 2016. Having considered the motions, responses, replies, record, evidence, and applicable law, the court denies Defendants/Counter-Plaintiffs Baisden Enterprises, Inc. and Michael Baisden's Motion for Summary Judgment (Doc. 121); grants in part and denies in part Plaintiff/Counter-Defendant Radio Networks, LLC and Counter-Plaintiff Cumulus Media, Inc.'s Motion for Partial Summary Judgment (Doc. 168); denies as moot Radio Networks, LLC and Cumulus Media, Inc.'s Motion to Exclude Testimony of C.D. Shamburger, Jr. (Doc. 125); and denies as moot Radio Networks, LLC and Cumulus Media, Inc.'s Motion to Exclude Testimony of Spencer Brown, Esq. Relating to Audits (Doc. 128).

I. Background Facts

Radio Networks provides radio programming for various radio stations in the United States. Radio Networks is a subsidiary of Cumulus. Baisden is a radio personality and from 2008 to 2013 was the talent for a radio talk program produced by BEI, known as The Michael Baisden Show. Baisden is the sole owner and member of BEI. In 2008, BEI and Radio Networks entered into an agreement for the production and delivery of The Michael Baisden Show. This lawsuit arises from a contractual dispute between the parties over whether Radio Networks overpaid BEI and Baisden $1,000,000 during the final fifteen-month period of their agreement.

On May 21, 2014, Radio Networks filed this action to recover the alleged $1,000,000 overpayment. On January 20, 2016, Radio Networks filed its First Amended Complaint (Doc. 86),the operative pleading in this case, suing BEI and Baisden for: (1) breach of contract (Count One); (2) restitution and money had and received (Count Two); and (3) fraudulent transfer under the Texas Business and Commerce Code § 24.005 (Count Three). Radio Networks seeks judgment in the amount of $1,000,000, exemplary damages, pre- and postjudgment interest, costs, and attorney's fees. Disagreeing about the deal's specifics, and the amount of money to which they were entitled during the final fifteen-month period of their agreement, BEI and Baisden responded by joining Cumulus as a Counter-Defendant,⁵ offering a number of affirmative defenses, and asserting counterclaims against Radio Networks and Cumulus for: (1) breach of contract for refusing to match offers BEI received from a competing radio network in or around March 2013 (Count One); (2) breach of contract for not allowing BEI to complete an audit of the revenues and expenses relating to the distribution of the Program (Count Two); (3) breach of contract for failing to use commercially reasonable efforts to obtain distribution of the Program (Count Three); (4) breach of contract for failing to engage in good-faith negotiations for a potential extension of the Agreement (Count Four); and (5) tortious interference with prospective business relationships (Count Five). Defs.' Sec. Am. Ans., Joinder, and Countercl. (Doc. 87). BEI and Baisden seek actual and compensatory damages, lost profits, pre- and postjudgment interest, costs, and attorney's fees. In addition, BEI and Baisden seek a declaratory judgment that a noncompete covenant in the parties' agreement is unenforceable.

Following discovery, the parties filed motions for summary judgment that present overlapping facts, legal issues, and arguments. Radio Networks and Cumulus move for partial summary judgment on their claim against BEI and Baisden for restitution and money had andreceived (Count Two), and also move for summary judgment on all BEI and Baisden's counterclaims.⁶ BEI and Baisden move for summary judgment on all of Plaintiffs' claims, as well as on their own affirmative defenses of statute of limitations, statute of frauds, the parol evidence rule, ratification and/or waiver, and excuse due to prior breach. BEI and Baisden also seek summary judgment on their request for attorney's fees and costs for having to defend against Plaintiffs' breach of contract claim. BEI and Baisden have filed objections to certain evidence upon which Plaintiffs rely to support their Motion for Partial Summary Judgment and to oppose Defendants' Motion for Summary Judgment.⁷ Both summary judgment motions have been fully briefed and are ripe for determination, as are Defendants' objections. The court now sets forth the evidence, viewed in the light most favorable to the nonmoving party, and draws all reasonable inferences in the nonmoving party's favor. See Celotex v. Catrett, 477 U.S. 317, 323 (1986).⁸

On November 12, 2008, BEI and Radio Networks entered into an agreement for the production and delivery of radio programs (the "Programs") featuring Baisden (the "Agreement"). In connection with the Agreement, Baisden signed a personal guarantee (the "Guarantee"), agreeing to "be personally bound by all . . . provisions [of the Agreement] . . . and personally guaranteed theobligations of [BEI]" under the Agreement. Baisden Guarantee (Pls.' Summ. J. App. 28) (Doc. 130).⁹ The Agreement was amended by the parties three times: May 4, 2010; July 9, 2010 (the "July 2010 Amendment"); and March 9, 2011.

Among other things, under the Agreement, Radio Networks agreed to pay BEI a specific "Guaranteed Amount" (as defined in the Agreement) for each year of the term of the Agreement, subject to certain limitations. Specifically, under Paragraph 3(b) of the July 2010 Amendment, BEI was to receive:

[T]he greater of Five Million Dollars ($5,000,000) for each of the first three contract years (or cycles) and Seven Million Two Hundred Fifty Thousand Dollars ($7,250,000), for the fourth cycle of fifteen months (the "Guaranteed Amount") or (i) forty percent (40%) of "Net Program Income" in the first contact year or (ii) fifty percent (50%) of Net Program Income in the second and third contract years and the fourth cycle of fifteen months.

July 2010 Amendment ¶ 3(b) (Pls.' Summ. J. App. 42). Thus, for the final fifteen-month period...