Christenson Media Group Inc. v. Lang Industries, Inc. et al

Filing 90

FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER. PLEASE REFER TO THE ORDER FOR IMPORTANT FILING DEADLINES. Signed by District Judge J. Thomas Marten on 10/31/12. (mss)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
CHRISTENSON MEDIA GROUP, INC.,
Plaintiff,

vs.

Case No. 10-2505-JTM

LANG INDUSTRIES, INC., AND
ENVIROVENTURES, INC.,
Defendants.

FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER
Following a bench trial on September 12 and 13, 2012, consideration of all evidence
admitted by stipulation or during the trial, and the witness testimony, the court hereby finds and
concludes as follows.

The following persons were present at the trial: (1) Jan Christenson, President of
plaintiff Christenson Media Group; (2) Keith Shuttleworth, counsel for plaintiff; (3) Rachel
Backes, account manager at Christenson Media Group; (4) Edward Lang, President of
defendants Lang Industries, Inc. and Enviroventures, Inc.; (5) John Hector, counsel for
defendants; and (6) Rodney Wray, Roto-Rooter franchisee and former Christenson Media Group
client.
The court heard testimony from Jan Christensen, Rachel Backes, Edward Lang, and
Rodney Wray. Several exhibits were stipulated to by the parties or admitted into evidence (Dkt.
87, Att. #2). After assessing the credibility of the witnesses, evaluating all of the evidence, and

considering the arguments of counsel, the court makes the following findings of fact and
conclusions of law.
FINDINGS OF FACT
1.

Christenson Media Group, Inc. (“CMG”) was previously known by the name of
Christenson, Barclay & Shaw, Inc. and lawfully changed its name to Christenson
Media Group, Inc. on June 8, 2010.

2.

CMG is a Missouri corporation registered as a foreign corporation in Kansas, and
its only office is located in Overland Park, Kansas.

3.

Lang Industries, Inc. (“Lang Industries”) is a New York corporation with its
principal place of business in New York.

4.

Enviroventures, Inc. (“Enviroventures”) is a New York corporation with its
principal place of business in New York.

5.

CMG prepares and places advertising for its clients in Yellow Pages directories
throughout the United States and Canada.

6.

In 1989, the Roto-Rooter Franchisees’ Association (“RRFA”) approved CMG as
an endorsed vendor for the placement of Yellow Pages directory advertising for
RRFA members.

7.

In September 2001, Edward Lang requested that CMG place certain
advertisements in Yellow Pages directories regarding Lang Industries’s RotoRooter operations.

8.

After approving Lang Industries’s credit, CMG opened an account for Lang

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Industries, account number 9725-09728 (“Account 9728”).
9.

From September 2001 to October 2002, Lang Industries transferred most of its
Yellow Pages accounts from Grey Directory Marketing, Inc. to CMG, leaving the
Orange County directories with Grey in order to maintain that business
relationship.

10.

In March 2003, Lang Industries transferred the remaining Orange County
directories from Grey to CMG, giving CMG all of Lang Industries’s directory
advertising business.

11.

From 2001 to 2009, CMG placed advertisements on more than 100 occasions in
various Yellow Pages in New York, New Jersey and Pennsylvania, all as directed
by Lang Industries, under Account 9728.

12.

For each advertisement CMG placed for Lang Industries, CMG sent several
documents to Lang Industries for approval. These documents included an
Advertising Agreement specifying the terms of the agreement for the specific
advertisement, the proposed advertisement, and an itemized Order Confirmation
form specifying all charges to Lang Industries for placing the advertisement.
Before placing any advertisement, CMG received written confirmation from Lang
Industries approving the agreement, the advertisement, and the charges associated
with the advertisement.

13.

Each Advertising Agreement signed by Lang Industries and returned to CMG
provided, in part: “Advertiser agrees that this request for advertising shall result

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in a legally binding contract when accepted and signed by [CMG] at its main
office in Overland Park, Kansas.”
14.

Once Lang Industries signed an Advertising Agreement, CMG placed the
advertisement in a Yellow Pages directory and paid the directory publishers.
CMG then issued invoices to Lang Industries on a monthly basis for one-twelfth
(1/12) of the annual publication costs. The annual publication costs were
contained in the Order Confirmation form which Lang Industries signed or
initialed and returned to CMG.

15.

As a result of the business process, CMG is obligated to pay the publisher for
advertising costs up front, relying on each customer to pay off its account. If a
customer does not pay, CMG has no recourse from the publisher.

16.

From 2001 to 2009, Lang Industries paid for the advertisements CMG placed in
the Yellow Pages directories under Account 9728.

17.

In 2010, Lang Industries stopped making payments to CMG for the
advertisements CMG had placed under Account 9728 and Account 32100.

18.

Each Advertising Agreement signed on behalf of Lang Industries provides that
any failure by Lang Industries to make a payment to CMG when it is due is
considered a default.

19.

Each Advertising Agreement signed on behalf of Lang Industries authorized
CMG to accelerate the remaining balance due upon non-payment of an invoice
issued by CMG that continues for thirty days.

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20.

After ongoing delinquency and continuous collection efforts on Account 9728,
the amount of time between payments increased to the point that Lang Industries
routinely was sixty days past due. Accordingly, in March 2010, CMG accelerated
the remaining balance on Account 9728 and forwarded the accounts to its lawyer.

21.

Each Advertising Agreement Land Industries signed authorized CMG to assess
late fees of 1.5% per month to any account balance upon non-payment that
continues for thirty days.

22.

Lang Industries’s Account 9728 with CMG was thirty days past due in 2010 and
remains so today.

23.

The principal balance due from Lang Industries to CMG for Account 9728 is
$223,107.67.

24.

Lang Industries owes CMG late fees on advertisements charged to Account 9728.

25.

In 2003, Mr. Lang acquired a new geographic area to operate within as a RotoRooter franchisee. At Mr. Lang’s request, CMG set up a separate account for
Lang Industries, limiting charges on the new account to the newly-acquired area.
CMG assigned the new account number as 9275-32100 (“Account 32100”).

26.

Advertisements placed by CMG for Account 32100 were subject to the same
process of confirmation as were advertisements placed for Account 9728. An
Advertising Agreement, the proposed advertisement, and an Order Confirmation
form were signed or initialed on behalf of Lang Industries and returned to CMG
before the advertisement was placed.

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27.

From 2003 to 2009, CMG placed advertisements with various Yellow Pages
directory publications for Lang Industries on forty-two occasions under Account
32100, all pursuant to Lang Industries’s written directions. Lang Industries paid
CMG for the advertisements placed in the Yellow Pages directories under
Account 32100 for almost seven years.

28.

In 2010, Lang Industries stopped making payments to CMG for the
advertisements CMG had placed under Account 32100.

29.

As with Account 9728, the Advertising Agreements Lang Industries signed or
initialed for Account 32100 authorized CMG to accelerate unpaid amounts thirty
days delinquent and charge a 1.5% monthly late fee.

30.

After ongoing delinquency and continuous collection efforts on Account 32100,
Lang Industries routinely was sixty days past due. Accordingly, in March 2010,
CMG accelerated the remaining balance on Account 32100 and forwarded the
accounts to its lawyer.

31.

Lang Industries’s Account 32100 with CMG was thirty days past due in 2010 and
remains the same today.

32.

The principal balance due from Lang Industries to CMG for Account 32100 is
$47,849.42.

33.

Lang Industries owes CMG late fees on advertisements charged to Account
32100.

34.

In November 2002, when the accounts transferred in from Grey Directory

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Marketing to CMG, Mr. Lang requested that CMG bill Enviroventures separately
from Lang Industries. Accordingly, CMG assigned Enviroventures its own
account number 9725-9728A (“Account 9728A”) for advertisements prepared
and placed by CMG.
35.

Advertisements placed by CMG for Enviroventures under Account 9728A were
handled in the same manner as discussed above for Account 9728. Enviroventures
signed or initialed an Advertising Agreement, the proposed advertisement, and an
Order Confirmation form and returned them to CMG’s offices in Overland Park,
Kansas, before CMG placed the advertisement.

36.

From 2002 and 2009, at the written direction of Enviroventures, CMG placed
advertisements for Enviroventures with various Yellow Pages directory
publications on forty-nine occasions under Account 9728A. Enviroventures paid
CMG for the advertisements under Account 9728A for approximately seven
years.

37.

In 2010, Enviroventures stopped making payments to CMG for the
advertisements placed under Account 9728A.

38.

As with Accounts 9728 and 32100, the Advertising Agreements signed or
initialed on behalf of Enviroventures for Account 9728A authorized CMG to
accelerate unpaid amounts thirty days delinquent, and to charge a 1.5% late fee.

39.

Ultimately, Account 9728A was also routinely sixty days past due. Accordingly,
in March 2010, CMG accelerated the remaining balance on Account 9728A and

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forwarded the accounts to its lawyer.
40.

Enviroventures’s Account 9728A with CMG was thirty days past due in 2010 and
remains so.

41.

The principal balance due from Enviroventures to CMG for Account 9728A is
$6,607.19.

42.

Lang Industries owes CMG late fees on advertisements charged to Account
9728A.
CONCLUSIONS OF LAW

1.

This Court has jurisdiction over the subject matter of this action pursuant to 28
U.S.C. ' 1332(a) by virtue of diversity of citizenship of the Plaintiff and
Defendants and the requisite amount in controversy.

2.

This Court has personal jurisdiction over the Defendants under Kansas long-arm
statute ' 60-308(b), and venue is proper under ' 1391(b)(2).

3.

Each Advertising Agreement noted above, including the approved advertisement
and Order confirmation form, constitutes a valid and binding agreement between
CMG and either Lang Industries or Enviroventures.

4.

CMG provided sufficient consideration in support of each Advertising Agreement
by agreeing to place advertisements with Yellow Pages directories on the behalf
of Lang Industries or Enviroventures.

5.

CMG performed in compliance with its obligations set forth in each Advertising
Agreement, conferring a benefit on Lang Industries or Enviroventures.

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6.

Every Advertising Agreement at issue was authorized by Lang Industries or
Enviroventures.

7.

Lang Industries and Enviroventures accepted the benefits of the Yellow Pages
advertisements placed on their behalf by CMG.

8.

Lang Industries and Enviroventures breached the terms of their respective
accounts by the failing to pay the agreed charges to CMG as stated in the
Advertising Agreements, as detailed by the itemized charges noted in the Order
Confirmation forms.

9.

By breaching these contracts, Lang Industries and Enviroventures caused
monetary damages to CMG.

10.

Service charges, or late fees, continue to accrue on the principal balance of each
account through the date of judgment.

11.

Pursuant to &11 of each Advertising Agreement, CMG is entitled to recover
reasonable collection and attorney’s fees. The Court will determine these fees
and costs at the close of the case.
IT IS ACCORDINGLY ORDERED this 31st day of October, 2012, that Lang

Industries and Enviroventures pay to CMG the full amount of their respective accounts,
including principal, late fees, and collection and attorney’s fees incurred by CMG in this case, as
set out in a subsequent court order.
Plaintiff is further ORDERED to submit to the court a complete statement of the
amounts it claims are due and owing under the agreements noted in the body of the opinion,

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together with its calculations of late fees, and costs of collection by November 16, 2012, and
defendants are ORDERED to file their response by November 30, 2012.

s/ J. Thomas Marten
J. THOMAS MARTEN, JUDGE

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