Tinn v. Emm Labs Incorporated

Filing 181

OPINION AND ORDER EMM's motion 149 for summary judgment against Tinn's breach of oral agreement claim is GRANTED. EMM's alternative motion for an order precluding Tinn from recovering damages for future profits and profits on sales not actually made is DENIED as moot. Tinn's motion 144 for partial summary judgment on liability is also DENIED as moot. However, the court will permit Tinn to proceed on a quantum meruit theory to recover the compensation, if any, EMM di d not pay to him for services and sales he performed for EMM's benefit during the period of their business relationship. Timm's motion for summary judgment against EMM's Lanham Act counterclaim is GRANTED as to the allegation of false advertising but DENIED as to the allegation of false association. Finally, Tinn's motion 159 to amend his complaint is DENIED as untimely. Signed on 2/27/09, by Magistrate Judge John V. Acosta. (peg)

IN T H E UNITED S T A T E S D I S T R I C T C O U R T F O R T H E DISTRICT O F O R E G O N

J O N A T H A N T I N N , an individual, Plaintiff, v. E M M LABS, INCORPORATED, a Canada corporation, Defendant. Civ. N o . 0 7 - 9 6 3 - A C OPINION AND O R D E R

A C O S T A , Magistrate Judge

Introduction
T h r e e m o t i o n s are before the court for decision. P l a i n t i f f J o n a t h a n Ti1ll1 ( " T i n n " ) has filed for p a r t i a l s u m m a r y j u d g m e n t a g a i n s t D e f e n d a n t E M M L a b s , I n c o r p o r a t e d ( " E M M " ) o n t h e l i a b i l i t y

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element o f his claim for b r e a c h o f oral agreement, and for s u m m a r y j u d g m e n t o n E M M ' s counterclaim for v i o l a t i o n o f t h e Lanham Act. E M M h a s filed for s u m m a r y j u d g m e n t against Tinn o n his breach o f oral agreement claim or, in the alternative, for a n o r d e r precluding T i n n from recovering damages for future profits and profits o n sales n o t actually made. T i n n also has m o v e d to amend his complaint for the third time, to add to his current allegations a charge that E M M agreed to manufacture and ship a specific product for Tinn to m a r k e t and sell. T h e court grants E M M ' s m o t i o n for summaIy j u d g m e n t against T i n n ' s b r e a c h o f oral agreement claim b e c a u s e T i n n h a s not presented evidence sufficient to p e l m i t a reasonable j u r o r to conclude that the parties reached a meeting o f the minds o n specific ten1ls. Consequently, the court denies T i l m ' s m o t i o n for partial s u m m a I y j u d g m e n t o n liability and denies as m o o t E M M ' s alternative m o t i o n for an order precluding Tinn from recovering damages for future p r o f i t s and p r o f i t s o n sales n o t a c t u a l l y m a d e . H o w e v e r , t h e c o u r t w i l l p e r m i t T i m l to p r o c e e d o n a quantum meruit theory to recover the compensation, i f any, E M M did n o t p a y h i m for the services and sales h e actually performed for E M M ' s benefit during the period o f their b u s i n e s s relationship. T h e court also grants T i n n ' s m o t i o n for s u m m a r y j u d g m e n t against E M M ' s L a n h a m A c t counterclaim as to E M M ' s a l l e g a t i o n o f f a l s e a d v e r t i s i n g b u t d e n i e s t h e m o t i o n as t o E M M ' s a l l e g a t i o n o f f a l s e a s s o c i a t i o n , b e c a u s e g e n u i n e i s s u e s o f m a t e r i a l fact e x i s t r e g a r d i n g T i n n ' s u s e o f E M M ' s n a m e i n the period after the p a r t i e s ' relationship ended. T h e court denies T i n l l ' s m o t i o n to amend his c o m p l a i n t as u n t i m e l y . '

, T h e parties h a v e consented to jurisdiction b y magistrate j u d g e p u r s u a n t to 28 U.S.C. § 6 3 6 ( c)(1). OPINION AND O R D E R 2

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Factual Background

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T h e r e l a t i o n s h i p b e t w e e n T i m l and E M M E M M is a m a n u f a c t u r e r o f h i g h - e n d digital audio e q u i p m e n t . P r i o r to t h e e v e n t s giving r i s e

to this lawsuit, in approximately 2003, Tilm distributed E M M products. T h e p a r t i e s ' initial relationship ceased and E M M then contracted w i t h O n a H i g h e r N o t e ( " O A H N " ) for exclusive d o m e s t i c d i s t r i b u t i o n o f E M M p r o d u c t s . A t least p a r t i a l l y d u e to d i s s a t i s f a c t i o n w i t h O A H N , i n S e p t e m b e r 2005 E M M contacted Tillll to inquire whether h e w o u l d resume selling E M M products. S u s a n M e i t n e r ( ' M e i t n e r " ) , c o - f o u n d e r o f E M M and t h e n its C h i e f F i n a n c i a l Officer, w r o t e a n e - m a i l to Tinn that stated, i n part: " I w a n t e d to k n o w i f there w a s s o m e w a y that w e can w o r k you into b e c o m i n g a salesperson o n b e h a l f o f E M M . . . . " (Meitner Declaration ("Decl.") Ex. 6.) I n response, Timl wrote: " I do n o t really understand what you m e a n b y a ' s a l e s p e r s o n ' and what that w o u l d entail." !d. Tinn indicated his interest in a m o r e extensive business relationship w i t h E M M . T h e p a r t i e s ' discussions continued into October 2005 and ultimately resulted iu Thill b e g i n n i n g w o r k f o r E M M i n N o v e m b e r 2005. D u r i n g t h e s e discussions, b o t h p a r t i e s e x p r e s s e d t h e i r desire to e n t e r into a written contract although n o written agreement h a d b e e n drafted o r signed at the t i m e Tirlll b e g a n w o r k i n g for E M M .
I n early N o v e m b e r 2005, E M M instructed its lawyer to draft a written distribution agreement

b e t w e e n i t s e l f and Tillll. O n N o v e m b e r 14, 2005, E M M received this written draft agreement from its lawyer but, apparently, did not then forward it to Tinn. I n J a n u a r y 2006, E M M terminated its relationship w i t h O A H N as E M M ' s exclusive domestic distributor and "Tirlll b e g a n to distribute E M M products in the U.S . . . . " (Meitner Decl. '112.) Also i n January 2006, E M M aJlllounced its n e w r e l a t i o n s h i p w i t h T i n n i n p r e s s releases: " E M M Labs s a i d T u e s d a y t h a t i t h a d n a m e d J o n a t h a n

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Timl vice president o f sales and marketing. Tinn, who formerly served as the c o m p a n y ' s domestic distributor o f c o n s u m e r products, w i l l oversee b o t h distribution a n d c u s t o m e r s e r v i c e worldwide, effective illl1llediately," and " B o t h US distribution and customer service worldwide will b e handled b y J o n a t h a n T i n n , E M M L a b s ' n e w v i c e p r e s i d e n t o f s a l e s a n d marketing." ( B a l i o n D e c \ . , E x h i b i t ("Ex.") 2,4.) A few months later, i n April 2006, E M M and Tinn h a d a " p r i c i n g dispute." (Weiss Decl. Ex. 2 at 2.) Although T i n n ' s response effectively was " I quit," h e continued to perform his duties as a v i c e president o f E M M . I n April 2006, E M M sent T i n n a draft agreement intended to g o v e m their n e w business relationship. This was the first written draft agreement that Tinn received and was substantially similar to the November 2005 original draft agreement E M M h a d received from its lawyer. Over the next eight months the parties exchanged at least eleven additional drafts o f t h e agreement, none o f w h i c h , a p p a r e n t l y , a d e q u a t e l y a d d r e s s e d T i m l ' s c o n c e r n s or r e f l e c t e d t h e t e r m s T h m b e l i e v e d h e h a d orally agreed to w i t h E M M i n October 2005. On N o v e m b e r 21, 2006, Michael Greene ( " G r e e n e " ) , a l a w y e r w o r k i n g for E M M , e - m a i l e d T h m a d r a f t a g r e e m e n t w h e r e i n G r e e n e h a d attempted to "capture [Tinn's] concerns" with previous draft agreements. (Greene Dec\. Ex. 13.) On December 19, 2006, Meitner sent T h m an e-mail i n w h i c h s h e stated: "Right n o w due to the fact that w e d o n ' t have a contract i n place, I will need you to wire the m o n e y for the units for the customers and then I will send them o u \ ' ' ' (Meitner Dec\. Ex. 3.) T i n n did n o t respond to this e-mail. O n December 20, 2006, Meitner again e-mailed Tirm regarding product pricing. This e-mail s t a t e d : " T h i s p r i c e for t h e t w o d e m o u n i t s i s o n l y for t h e s e t w o u n t i l w e h a v e a c o n t r a c t a n d agreement o n pricing." (Meitner Decl. Ex. 4.) Again, T i n n did not respond to t h e e-mai\. On JanualY 5 , 2 0 0 7 , Meitner again e-mailed Timl, the e-mail stating, in relevant Pali: " A t the present O P I N I O N AND O R D E R
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time there is no written o r verbal agreement with E M M Labs. Until further notice fi'om us w e will accept orders from you o n a non exclusive basis. As is o u r normal business practice prepayment b y wire must b e received prior to shipment." (Meitner Dec!. Ex. 5.) O n January 30, 2007, Meitner e-mailed T h m with an attached draft agreement. T h e e-mail stated: This contract has been written and rewritten umpteen times and n o w w e h a v e to decide whether w e will go forward o r not. I t contains the standard provisions that E M M Labs needs to go forward. Please let m e k n o w b y tomorrow i f this agreement i s acceptable and i f you want to proceed as o u r US distributor. (Meitner Dec!. Ex. 6.) T i n n rejected this draft agreement and, " o n FeblUaty 5 , 2 0 0 7 , [Meitner] wrote to advise h i m that E M M would manage its sales i n house." (Meitner Dec!.
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16.) T h e r e is no

d i s p u t e t h a t " n o w r i t t e n c o n t r a c t h a s e v e r b e e n e n t e r e d i n t o b e t w e e n E M M and [ T i n n ) . " ( D e f e n d a n t ' s Concise S t a t e m e n t o f Material Facts ( " D e f . ' s C S M F " ) Response CSMF ~ 19.) D u r i n g h i s r e l a t i o n s h i p w i t h E M M , T i n n m a i n t a i n e d two w e b s i t e s , b l u e l i g h t a u d i o . c o m a n d c h a m b e r s a u d i o . c o m , t h r o u g h w h i c h h e s o l d audio p r o d u c t s , i n c l u d i n g E M M p r o d u c t s . F o l l o w i n g the termination o f his relationship with EMM, T i n n c o n t i n u e d to display references to E M M o n these websites. I n April 2007, Meitner asked Tinn, via e-mail, to r e m o v e references to E M M from his website. ( D e f . ' s Opposition ("Opp.") Ex. 3 at 51.) Tinn did n o t r e m o v e these references, however, u n t i l a f t e r E M M r a i s e d a c o u n t e r c l a i m f o r false a s s o c i a t i o n a n d f a l s e a d v e l i i s i n g i n a n a m e n d e d answer o n April 15, 2008. I n the intervening year, T i n n received a n u m b e r o f e-mail inquiries from p o t e n t i a l b u y e r s o f E M M p r o d u c t s . A s t o t h e s e i n q u i r i e s , T i n n ' s d e p o s i t i o n t e s t i m o n y and h i s contemporaneous e-mails demonstrate that h e did n o t r e s p o n d to some o f these inquiries at al!.
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19; P l a i n t i f f s ( " P l . ' s " )

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When T i n n did respond, h e either did n o t clarify that h e no longer represented and sold E M M products, unfavorably compared E M M products to other audio products, o r steered the customer to a p r o d u c t line that h e h i m s e l f owned and distributed. (Conable Dec!. Ex. 2 at 2-24; Ex. 3 at 51-66.) 2. T i n n ' s testimony

a.

May 19, 2008: Response to Interrogatories

T i m l ' s M a y 19, 2008, response to E M M ' s A p r i l 14, 2008, interrogatories contains this d e s c r i p t i o n o f the t e r m s o f t h e a l l e g e d c o n t r a c t : I N T E R R O G A T O R Y NO. 1: P l e a s e set fmih each term o r provision o f t h e Contract. A N S W E R : T h e t e n n s are t h o s e c o n t a i n e d i n t h e d r a f t a g r e e m e n t i m m e d i a t e l y preceding a J u n e 28, 2 0 0 6 e-mail from Susan Meitner to J a m e s h t i a n o w i t h a copy to Andreas Koch, c o p y o f w h i c h is i n the possession o f d e f e n d a n t ' s counsel, except t h a t , as e x p l a i n e d i n p l a i n t i f f s p r o p o s e d f i r s t a m e n d e d c o m p l a i n t , p l a i n t i f f w a s d e f r a u d e d b y E M M i n t o r e d u c i n g t h e o r a l l y a g r e e d u p o n a m o u n t o f c o m m i s s i o n for intemational sales (10%), to 5 % as reflected by that draft. ( W e i s s Dec!. E x . 3 a t 2 - 3 . )

b.

June 25, 2008: Deposition

D u r i n g h i s J u n e 2 5 , 2008, deposition, Tillil testified that, at s o m e point, h e had seen a written agreement containing the terms o f his agreement w i t h EMM. (Weiss Dec!., Ex. 1 at 5.) Thlll also testified that h e could recall f i ' o m m e m o r y some, but n o t all, o f the terms h e agreed to with EMM.

Id. at 6. A s to the temlS o f the agreement that h e allegedly entered into w i t h E M M in October o f
2005, id. at 24, T i n n testified that t h e agreement was for an initial two-year term, with renewals
p r e d i c a t e d o n m e e t i n g s a l e s quotas. T h e q u o t a s t h e m s e l v e s w e r e d e p e n d e n t o n E M M ' s a b i l i t y t o r e l e a s e and s h i p u n i t s o f t h e C D S A , o n e o f t h e i r p r o d u c t s i n d e v e l o p m e n t . Tillll w a s n o t s u r e o f t h e t e r m o f the renewal, b u t believed i t w a s for an additional two years. Tillil w a s also not s u r e i f h e

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could recall the specific quotas for renewal, though h e remembers that E M M " k e p t trying to renegotiate" the number. !d. at I I . U n d e r the agreement, Tilill could o n l y b e terminated for committing a crime o r failure to meet the sales thresholds that w o u l d trigger renewal. Id. at 14. O n t h e i s s u e o f c o m p e n s a t i o n , Timl stated t h a t h e c o u l d n o t n e c e s s a r i l y r e c a l l t h e c o m p e n s a t i o n t e r m s w i t h c o m p l e t e accuracy. O n e t e r m h e w a s s u r e o f w a s t h a t h e w o u l d r e c e i v e a " 5 0 p e r c e n t m a r g i n " o n products s o l d i n the U n i t e d States. Id. at 23. T i n n also stated that h e required as a term o f the agreement that Oregon l a w w o u l d apply to any disputes arising from t h e agreement. Id. at 18. W h e n asked to identify the p o i n t at w h i c h the o r a l agreement w a s reached, Tinn responded t h a t i t w a s s o m e t i m e i n l a t e O c t o b e r o r e a r l y N o v e m b e r 2005, a n d t h a t E M M h a d e x p r e s s l y a g r e e d t o a l l o f h i s terms. T i n n t e s t i f i e d that h e w a s n o t a w a r e o f a n y w r i t t e n d o c u m e n t t h a t m e m o r i a l i z e d all t h e terms o f his contract w i t h EMM. !d. at 21-22. H e also testified that h e told E M M h e " w o u l d only enter an agreement i f [he] had an agreement in writing," id. at 27, and that E M M also intended to enter into a written agreement.
c.

J u l y 15, 2008: A m e n d e d Response to Interrogatories

After his deposition Thill amended his response to E M M ' s April 14, 2008, interrogatories. H i s amended answer to the first interrogatory stated: " O n June 25, 2008, defendant E M M Labs, Inc., ( " E M M " ) took the deposition o f J o n a t h a n Timl. Tinn testified about the terms and provisions o f his oral agreement w i t h E M M . In accordance w i t h T i n n ' s testimony, p l a i n t i f f amends his response to this interrogatory." Tinn then detailed several specific tellliS to the p m i i e s ' alleged oral agreement. F i r s t , t h e o r a l a g r e e m e n t w a s f o r a t e r m o f t w o years, a f t e r w h i c h a u t o m a t i c r e n e w a l w o u l d occur p r o v i d e d T i n n had m e t m i n i m u m sales thresholds, approximately 100 to ISO units o f any E M M p r o d u c t . " T h e i n i t i a l t e r m o f the a g r e e m e n t w a s t w o y e a r s b e g i n n i n g a t t h e r e l e a s e o f E M M ' s

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CDSA p r o d u c t . " ( W e i s s D e c . Ex. 6 a t 3.) S e c o n d , any d i s p u t e s w o u l d b e r e s o l v e d p u r s u a n t to O r e g o n l a w . T h i r d , E M M w a s to m a k e c o n s i s t e n t p r o d u c t s h i p m e n t s t o T i n n i n o r d e r t o f a c i l i t a t e h i s sales and m e e t i n g o f s a i d s a l e s thresholds. Fourth, T h m w o u l d m a k e d e c i s i o n s r e g a r d i n g p u b l i c a t i o n s t h a t w o u l d r e v i e w E M M p r o d u c t s , t r a d e s h o w s E M M w o u l d p a t i i c i p a t e in, a n d d e a l e r s E M M w o u l d use, as w e l l as assist i n d e v e l o p i n g a n e w product. F i f t h , and finally, t h e c o m p e n s a t i o n t e n u s for t h e a g r e e m e n t w e r e 1 0 % o f M S R P o n i n t e r n a t i o n a l sales; 5 0 % o f M S R P f o r T i n n ' s direct d o m e s t i c s a l e s n o t d i s t r i b u t e d b y O A l I N ; 5 % o f M S R P o n u n i t s s o l d t o O A H N ; a 6 0 % m a r g i n for a n y n e w dealers; e x c l u s i v e distributorship o f E M M p r o d u c t s i n t h e U n i t e d States i f O A H N w a s n o t a c t i n g as s u c h ; and " 4 0 % c o m m i s s i o n o n e - c o m m e r c e . " Id. at 4.

d.

October 17, 2008: Supplemental Response to E M M ' s Request f o r Admissions

I n t h i s s u p p l e m e n t a l r e s p o n s e , d a t e d O c t o b e r 1 7 , 2 0 0 8 , E M M a s k e d T i l m to a d m i t t h a t h e k n e w o f n o w r i t t e n a g r e e m e n t i n this m a t t e r p r o v i d i n g for a n initial t e r m o f t w o years, a u t o m a t i c renewal o f s a i d a g r e e m e n t u p o n m e e t i n g a m i n i m u m sales t h r e s h o l d o f o n e h u n d r e d units, a u t o m a t i c r e n e w a l o f s a i d a g r e e m e n t u p o n m e e t i n g a m i n i m u m s a l e s t1n'eshold o f o n e h u n d r e d a n d fifty units, o r T i l m ' s e n t i t l e m e n t to 1 0 % o f M S R P for s a l e s b y intel11ational distributors. T i n n a d m i t t e d t h a t h e k n e w o f n o w r i t t e n a g r e e m e n t t o t h a t effect.

L e g a l Standard
S u m m a r y j u d g m e n t i s appropriate " i f t h e p l e a d i n g s , the d i s c o v e r y and d i s c l o s u r e m a t e r i a l s o n f i l e , a n d a n y a f f i d a v i t s s h o w t h a t t h e r e i s n o g e n u i n e i s s u e a s to a n y m a t e r i a l f a c t a n d t h a t t h e m o v a n t i s e n t i t l e d t o j u d g m e n t as a m a t t e r o f l a w . " FED. R. ClY. P. 5 6 (c) (2008). S u m m a r y j u d g m e n t i s n o t p r o p e r i f m a t e r i a l factual i s s u e s e x i s t for trial. Warren v. City o f Carlsbad, 58 F . 3 d 4 3 9 , 441 ( 9 t h Cir. 1 9 9 5 ) .

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The m o v i n g p a r t y h a s the burden o f establishing the a b s e n c e o f a genuine i s s u e o f material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). I f t h e m o v i n g p a r t y shows t h e absence o f a genuine issue o f material fact, the n o n - m o v i n g p a r t y m u s t g o b e y o n d the pleadings a n d identify facts w h i c h s h o w a g e n u i n e issue for trial. Id. at 324. A nOlml0ving p a t t y c a n n o t defeat s u m m a t y j u d g m e n t b y r e l y i n g o n the allegations i n the c o m p l a i n t , o r w i t h u n s u p p o r t e d c o n j e c t u r e o r conc1usOlY statements. Hernandez v. Spacelabs Medical, Inc., 343 F . 3 d 11 07, 1112 ( 9 t h Cir. 2003). Thus, s u m m a r y j u d g m e n t s h o u l d b e entered against " a p a r t y w h o fails to m a k e a s h o w i n g sufficient to establish the e x i s t e n c e o f an element essential to that p a r t y ' s case, and o n w h i c h that p a t t y w i l l b e a r t h e b u r d e n o f p r o o f a t t r i a l . " Celotex, 4 7 7 U . S . a t 3 2 2 . T h e c o u r t m u s t v i e w t h e e v i d e n c e in t h e l i g h t m o s t f a v o r a b l e t o t h e n o n m o v i n g p a r t y . B e l l v. Cameron M e a d o w s L a n d Co., 669 F . 2 d 1278, 1284 ( 9 t h Cir. 1982). A l l r e a s o n a b l e d o u b t as to the existence o f a g e n u i n e i s s u e o f fact s h o u l d b e r e s o l v e d against the m o v i n g party. H e c t o r v. Wiens, 533 F . 2 d 429, 4 3 2 ( 9 t h Cir. 1976). W h e r e different u l t i m a t e inferences m a y b e d r a w n , s u m m a t y j u d g m e n t i s inappropriate. Sankovich v. L i f e Ins. Co. a / N o r t h A m e r i c a , 638 F . 2 d 136, 140 ( 9 t h Cir. 1981). However, deference to the nonmoving p a r t y h a s limits. T h e n o n m o v i n g p a r t y m u s t s e t forth " s p e c i f i c facts showing a g e n u i n e i s s u e for trial." FED. R. CIY. P. 56(e) (2008) (emphasis added). T h e " m e r e existence o f a scintilla o f evidence i n support o f the p l a i n t i f f s p o s i t i o n [is] insufficient." A n d e r s o n v. L i b e r t y Lobby, Inc., 477 U.S. 242, 252 (1986). Therefore, w h e r e " t h e r e c o r d taken as a w h o l e c o u l d n o t l e a d a r a t i o n a l t r i e r o f fact t o f i n d f o r t h e n o n n l 0 v i n g p a r t y , t h e r e i s n o g e n u i n e i s s u e for t r i a l . " Matsushita Elec. Indus. Co., Ltd. v. Zenith R a d i o CO/p., 475 U.S. 574, 587 (1986) ( i n t e r n a l q u o t a t i o n s m a r k s omitted).

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Discussion

1.,

T h e A l l e g e d Oral A g r e e m e n t

a.

Standards

Oregon subscribes to the objective theory o f contracts. R e a l Estate Loan F u n d v. H e m e r , 7 6 Or. App. 349, 354, 709 P.2d 727 (1985). " I n determining w h e t h e r a contract exists and w h a t its terms are, w e examine t h e p a r t i e s ' objective manifestations o f intent, as evidenced b y their communications and acts." Ken H o o d Constr. v. Pacific Coast Constr., 201 Or. App. 5 6 8 , 5 7 8 , 1 2 0 P . 3 d 6 (2005), adhered as modified on reconsideration by 203 Or. App. 768, rev. denied, 341 Or. 3 6 6 (2006). T h u s , t h e d e t e r m i n a t i o n o f w h e t h e r a c o n t r a c t e x i s t s " d o e s n o t d e p e n d o n w h e t h e r t h e parties h a d the s a m e s u b j e c t i v e understanding o f t h e i r agreement . . . i t depends o n w h e t h e r the parties agreed to the same, express t e n n s o f t h e agreement, and o n w h e t h e r those terms constitute a n enforceable agreement." City o f Canby v. Rinkes, 136 Or. App. 602, 611, 902 P . 2 d 605 (1995),

rev. denied, 322 Or. 4 8 9 (1996); accord Vanderselt v. Pope, 155 Or. App. 3 3 4 , 3 3 9 , 9 6 3 P . 2 d 130
(1998) ( m e e t i n g o f t h e m i n d s m e a s u r e d b y b o t h p a r t i e s ' o b j e c t i v e m a n i f e s t a t i o n s o f i n t e n t to f o n n a contract). F o r an agreement to constitute an enforceable contract, the parties m u s t agree o n the terms o f t h e agreement. A s t h e O r e g o n S u p r e m e C o u r t w r o t e , " T h i s c o u r t , i n a l o n g l i n e o f c a s e s , h a s adhered to the rule that before there can b e a v a l i d contract there m u s t b e a m e e t i n g o f t h e minds as to all o f its terms; that nothing can b e left for future negotiation, and that i f any p o r t i o n o f the c o n t r a c t is n o t a g r e e d upon, o r i f no m e t h o d is agreed u p o n b y w h i c h s u c h a t e r m o r p r o v i s i o n c a n b e settled, there is n o contract." Phillips v. Johnson, 266 Or. 544, 555, 514 P . 2 d 1337 (1973). This rule h a s b e e n refined to require the p a t i i e s ' agree o n l y o n essential o r material terms o f the

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agreement. See Hand v. Starr-Wood Cardiac Group a/Corvallis, No. 99-1091-JO, 2001 U.S. Dist. LEXIS, a t *7 (D. Or. Feb. 1 5 , 2 0 0 1 ) ("It is well-settled i n Oregon that the parties n e e d n o t agree o n all terms o f t h e contract, but only those that are essential to the agreement." (citing Pacijicorp v.

Lakeview Powe r Co., 131 Or. App. 301, 307, 884 P . 2 d 897 (1994))). " A t e l m is ' m a t e r i a l ' to an
enforceable agreement w h e n i t goes to the substance o f the contract and, i f breached, defeats the object o f t h e parties i n entering into the agreement." Johnstone v. Zimmer, 191 Or. App. 26, 34, 81 P . 3 d 92 ( 2 0 0 3 ) . T h e b u r d e n is o n the p a r t y alleging the c o n t r a c t ' s existence to establish its telms: t h e p r o p o n e n t o f t h e a l l e g e d contract, h a s t h e b u r d e n o f e s t a b l i s h i n g i t s e x i s t e n c e a n d its terms. In o r d e r to warrant enforcement, p r o o f o f the contract m u s t b e clear, u n e q u i v o c a l and b y a p r e p o n d e r a n c e o f t h e evidence. I n d e t e r m i n i n g w h e t h e r a contract exists a n d what its terms are, w e examine t h e objective manifestations o f i n t e n t , as e v i d e n c e d b y t h e p a r t i e s ' c o m m u n i c a t i o n s a n d a c t s .

Holdner v. Holdner, 176 Or. App. 111, 1 2 0 , 2 9 P.3d 1199 (2001) (intel1lal citations and quotation
m a r k s omitted). W h e n t h e facts are not i n dispute, the determination o f w h e t h e r a contract exists is a question o f law. Key West Retaining Sys., Inc. v. Holm II, Inc., 185 Or. App. 182, 188, 5 9 P .3d 1280 (2002), rev. denied, 335 Or. 402 (2003).

b.

The p a r t i e s ' positions

E M M argues t h a t T i n n h a s n o t p r e s e n t e d e v i d e n c e o f a s e t o f c l e a r a n d u n e q u i v o c a l e s s e n t i a l terms agreed u p o n b y the parties as evidenced b y their objective manifestations o f intent. Rather, h i s c o n t r a d i c t o r y and i n c o n s i s t e n t t e s t i m o n y d e m o n s t r a t e s n o t o n l y t h a t t h e p a r t i e s d i d n o t a g r e e o n t h e s p e c i f i c m a t e r i a l t e r m s , b u t that T i n n h i m s e l f c a n n o t a c c u r a t e l y s t a t e t h e e s s e n t i a l t e r m s t h a t h e a l l e g e s w e r e p a r t o f t h e p a r t i e s ' o r a l agreement. F m i h e r , E M M a r g u e s , b e c a u s e t h e r e i s n o d o c u m e n t a r y e v i d e n c e o f this agreement, t h e c o u r t m u s t b a s e a n y f i n d i n g o f a n e n f o r c e a b l e oral

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agreement on T i n n ' s testimony and recollection o f terms. F o r this reason, even taking T i n n ' s asseriions as true and drawing inferences in his favor, n o reasonable j u r o r could find the existence o f an e n f o r c e a b l e o r a l a g r e e m e n t c o n s i s t e n t w i t h T i n n ' s a l l e g e d t e r m s , l e t a l o n e t h a t t h e r e is objective evidence that E M M knew o f and wished to b e bound b y T i n n ' s temlS. T i n n claims that E M M concedes it entered into a n agreement w i t h Tir111 in October 2005 and, because b o t h parties performed under this agreement, there is no genuine issue as to the agreement's existence. H e further asserts that the evidence demonstrates at least a genuine issue as to whether there w a s a breach o f this agreement and that, at most, he is entitled to s u m m a r y j u d g m e n t on the i s s u e o f l i a b i l i t y for E M M ' s b r e a c h o f c o n t r a c t .

c.

Analysis

A s the proponent o f the agreement, Timl has n o t met his b u r d e n o f demonstrating that s u f f i c i e n t facts e x i s t u p o n w h i c h r e a s o n a b l e j u r o r s c o u l d f i n d c l e a r a n d u n e q u i v o c a l p r o o f , b y a p r e p o n d e r a n c e o f t h e e v i d e n c e , t h a t an o r a l c o n t r a c t existed. T i n n m a i n t a i n s t h a t t h e p a r t i e s e n t e r e d into a binding oral agreement in October 2005, but his own testimony shows they could n o t have. T i n n g a v e v a r y i n g d e s c r i p t i o n s o f t h e t e r m s o f t h e oral a g r e e m e n t h e c l a i m s t o h a v e s t r u c k w i t h E M M i n October 2005. A t his June 25, 2008, deposition, Tinn testified to these terms and subsequently memorialized this testimony in his July 15, 2008, Amended Response to D e f e n d a n t ' s Interrogatory No. 1 (hereinafter "Amended Response"). But as E M M correctly points out, these t e n u s a r e i n c o n f l i c t w i t h t h e t e r m s c o n t a i n e d i n the d r a f t a g r e e m e n t ( h e r e i n a f t e r " D r a f t A g r e e m e n t " ) that Timl said, i n his M a y 19, 2008, response to E M M ' s Interrogatory N o . 1 (Weiss Dec!. Ex. 3 at 2; Weiss Dec!. Ex. 4), constituted t h e oral contract. A c o m p a r i s o n o f t h e two d o c u m e n t s f a t a l l y u n d e n u i n e s t h e n o t i o n t h a t t h e p a r t i e s e v e r c o u l d OPINION A N D O R D E R 12

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have reached agreement. The Draft Agreement stated that the contract tem1 b e g a n o n October 31, 2005, and ran for fourteen months, ending o n December 31, 2006. T h e Amended Response stipulated a two-year term not to begin until E M M released its CDSA Single B o x Player, for w h i c h e v e n t n o d a t e w a s s p e c i f i e d . T h e D r a f t A g r e e m e n t s t a t e d t h a t the a g r e e m e n t w a s g o v e m e d b y t h e l a w s o f A l b e r t a , C a n a d a , b u t t h e A m e n d e d R e s p o n s e s t a t e d t h a t t h e a g r e e m e n t w a s governed b y O r e g o n law . T h e D r a f t A g r e e m e n t p r o v i d e d c o m m i s s i o n s o f 5 % o f E M M ' s s u g g e s t e d r e t a i l p r i c e o n intemational sales b o t h before and after tel1nination o f E M M ' s contract with OAHN, b u t the A m e n d e d Response set the cOll1l1lission on international sales a t 10% o f MSRP. The Draft

Agreement provided for 5% commission o n sales in the United States, b o t h before and after termination o f E M M ' s contract with OAHN, b u t the Amended R e s p o n s e set this conlli1ission at 10% o f M S R P . Under the D r a f t Agreement, Tinn was entitled to 35% o f E M M ' s suggested retail price o n i n t e r n e t s a l e s ; t h e A m e n d e d r e s p o n s e , b y c o n t r a s t , p r o v i d e d a 4 0 % c o m m i s s i o n for " e commerce.?' U n d e r the Draft Agreement sales benchmarks required for renewal w e r e set to increase every year: at t h e end o f 2006, T i n n was to have purchased o r sold "all o f the complete ' S e t s ' available from the current 'Signature Production R u n ' ; " at the end o f 2007, T i n n was to have purchased o r sold 250 C D S A units (no less than t e n p e r month); and at the end o f 2 0 0 8 , Tim1 was t o h a v e p u r c h a s e d o r s o l d n o l e s s t h a n 3 5 0 C D S A u n i t s (no l e s s t h a n f i f t e e n p e r m o n t h ) . T h e Amended Response, however, stated that Tim1' s sales thresholds were s e t o n l y generally at between 100 and 150 units p e r year, w i t h no mention at all o f a graduated increase. O t h e r d i s c o v e r y r e s p o n s e s a d d to t h e c o n f u s i o n o f w h a t terms t h e p a t t i e s a l l e g e d l y a g r e e d upon. I n his M a y 19, 2008, answer to IntelTogatOly N o . 1 , which w a s his original answer to this i n t e r r o g a t o r y , T i n n s a i d t h e t e r m s o f the o r a l a g r e e m e n t w e r e c o n t a i n e d i n " t h e d r a f t a g r e e m e n t OPINION AND O R D E R {KPR}

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immediatelypreceding" a June 28, 2006, e-mail Meitner sent to E M M ' s lawyer b u t which, Tinn said, contained a lower c o m m i s s i o n than he had orally agreed to because o f E M M ' s alleged fraud. However, in his October 17, 2008, supplemental responses to E M M ' s requests for admission, Tinn a d m i t t e d t h a t n o n e o f t h e n u m e r o u s draft a g r e e m e n t s c o n t a i n e d a n y o f five k e y t e r m s h e c l a i m e d were part o f the oral agreement. (Weiss Dec!. Ex. 5 at 2-3.) This, despite T i n n ' s June 25, 2008, unequivocal deposition testimony that he was "confident" that at some point he looked at a draft agreement containing the terms he believed he had agreed to with EMM. (Weiss Dec!. Ex. I at 4-5.) Also, Ti1l1l testified that the patties communicated that they would only enter into an agreement i n writing, id. at 26-27, and the parties do not dispute that no written agreement ever w a s made. A s t h e above d i s c r e p a n c i e s i l l u s t r a t e , T i n n c a n n o t m e e t h i s b u r d e n o n s u n m l a t y j u d g m e n t . The c o u r t ' s conclusion in Mukai Living Trust v. Lopez, 199 Or. App. 341, 111 P.3d 1150 (2005) a p p l i e s w i t h e q u a l force h e r e : " I n t h e p r e s e n t case, n o t h i n g i n t h e s u m m a t y j u d g m e n t r e c o r d amounts to evidence from which a rational j u r o r could find that the parties entered into an agreement w i t h terms ' s o precise that neither could reasonably misunderstand them.'" Id. at 345 (citation omitted). I n this case, no rational j u r o r could find a meeting o f t h e minds o n the terms o f t h e alleged o r a l c o n t r a c t b e c a u s e T i n n h i m s e l f h a s n o t b e e n o f o n e m i n d a b o u t w h a t t h o s e terms were. Furthermore, Tinn testified that both he and E M M did n o t intend to b e bound to any agreement without a written contract; given that umefuted testimony, a rational j u r o r could n o t find that the parties reached an oral agreement. Thus, T i n n ' s conflicting testimony about the oral contract's terms i s n o t a basis upon which he may create a question o f fact to survive summary judgment. Both patties acknowledge the m l e that a litigant cannot create a genuine issue o f material fact by contradicting prior s w o m testimony O P I N I O N AND O R D E R
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without explanation. T h e 1'llle, which obtains "virtual unanimity" a m o n g t h e circuit courts, is t h a t " a party c a n n o t create a genuine i s s u e o f fact sufficient to survive s u m m a r y j u d g m e n t s i m p l y by contradicting his o r h e r o w n previous s w o r n statement (by, say, filing a l a t e r affidavit t h a t flatly c o n t r a d i c t s t h a t p a r t y ' s e a r l i e r s w o m d e p o s i t i o n ) w i t h o u t e x p l a i n i n g the c o n t r a d i c t i o n o r a t t e m p t i n g to resolve the disparity." Cleveland v. Policy Mgl1lt. Sys. COI1)., 5 2 6 U.S. 795, 806 (1999). T h e N i n t h C i r c u i t explained: a p a r t y c a n n o t c r e a t e a n i s s u e o f fact b y a n a f f i d a v i t c o n t r a d i c t i n g h i s p r i o r d e p o s i t i o n testimony. ' I f a p a r t y w h o h a s b e e n e x a m i n e d a t length o n d e p o s i t i o n c o u l d r a i s e a n i s s u e o f fact s i m p l y b y s u b m i t t i n g a n a f f i d a v i t c o n t r a d i c t i n g h i s o w n p r i o r testimony, this w o u l d g r e a t l y diminish the u t i l i t y o f s u m m a r y j u d g m e n t as a p r o c e d u r e for s c r e e n i n g o u t s h a m issues o f f a c t . '

Kennedy v. A l l i e d Milt. Ins. Co., 952 F . 2 d 262, 266 (9th Cir. 1991) (internal citations omitted)
(quoting Foster v. Arcata Associates, 772 F . 2 d 1453, 1462 (9th Cir. 1985), cert. denied, 475 U.S. 1048 (1986)). This 1'llle does n o t e x t e n d to cases " i n w h i c h a c o n t r a d i c t o r y affidavit is introduced t o e x p l a i n p o r t i o n s o f e a r l i e r d e p o s i t i o n t e s t i m o n y . R a t h e r , [ t h e r u l e is] c o n c e r n e d w i t h ' s h a m ' t e s t i m o n y t h a t flatly contradicts earlier testimony i n an attempt to ' c r e a t e ' a n i s s u e o f f a c t a n d avoid s u m m a r y j u d g m e n t . " Kennedy, 952 F . 2 d a t 2 6 7 . O n s u m m a r y j u d g m e n t , i t i s for t h e d i s t r i c t c o m i to determine w h e t h e r t h e contradictory testimony w a s given i n an h o n e s t effort to clarify, o r w a s an intentional alteration designed to create a genuine issue o f material fact. H e r e , T i n n ' s t e s t i m o n y p r e s e n t e d t w o d i v e r g i n g s e t s o f c o n t r a c t t e r m s . I m p o r t a n t t o the i n s t a n t issue, h e does n o t e x p l a i n t h e m a n y m a t e r i a l discrepancies b e t w e e n his J u n e 2 0 0 8 d e p o s i t i o n description o f t h e contract terms and his M a y 2 0 0 8 intelTogatOly description o f t h o s e terms. N o r h a s T i n n e x p l a i n e d t h e c o n t r a d i c t i o n b e t w e e n these c o n f l i c t i n g a c c o u n t s o f a n oral a g r e e m e n t and h i s u n e q u i v o c a l deposition testimony that b o t h h e and E M M affirmatively h a d s t a t e d to e a c h other that

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no agreement b e t w e e n t h e m w o u l d b e m a d e unless i t was i n writing. (Weiss Dec!. Ex. 1 at 26-27.) T i m l ' s d e p o s i t i o n t e s t i m o n y o n this p o i n t is c o n s i s t e n t w i t h M e i t n e r ' s c o n t e m p o r a n e o u s e-mail statements to T i n n that no agreement existed b e t w e e n them (see M e i t n e r Dec!. Ex. 5 at 1 ( " A t the p r e s e n t t h e r e i s n o w r i t t e n o r v e r b a l a g r e e m e n t w i t h E M M L a b s . " ) ; M e i t n e r Dec!. Exs. 3 - 4 (indicating t h e p a r t i e s h a v e no contract a n d no a g r e e m e n t » , statements w h i c h Tilm did n o t refute at t h e t i m e a n d did n o t r e f u t e o n s u m m a r y j u d g m e n t . T i n n r e p e a t e d l y u r g e s the court to l o o k at the p a r t i e s ' p e r f o r m a n c e as evidence o f their m u t u a l i n t e n t t o b e b o u n d , b u t t h i s a r g u m e n t i s u n a v a i l i n g b e c a u s e , as n o t e d a b o v e , T i m l g a v e u n e q u i v o c a l deposition t e s t i m o n y t h a t b o t h h e a n d E M M stated their e x p r e s s i n t e n t t h a t t h e r e w o u l d be no agreement betWeen t h e m without a w r i t t e n d o c u m e n t containing all the terms to t h e i r agreement. T h i s i n t e n t t o b e b o u n d o n l y u p o n a s i g n e d a g r e e m e n t i s a c r i t i c a l p r i n c i p l e i n O r e g o n c o n t r a c t law:
I n cases s u c h as this o n e where the parties to an alleged oral c o n t r a c t c o n t e m p l a t e t h e l a t e r e x e c u t i o n o f a w r i t t e n a g r e e m e n t , t h e i n i t i a l q u e s t i o n i n d e t e n n i n i n g the e x i s t e n c e o f a c o n t r a c t is w h e t h e r o r n o t t h e p a l i i e s i n t e n d e d to b e b o u n d and r e g a r d e d t h e c o n t e m p l a t e d w r i t t e n a g r e e m e n t as a m e m o r i a l o f a p r i o r c o n t r a c t , o r w h e t h e r t h e y intended o n l y to b e b o u n d upon the e x e c u t i o n o f a written, signed contract.

Pyle v. The W o l f CO/poration, et al., 354 F. Supp. 346, 3 5 2 (D. Or. 1972) (internal citations
omitted). Here, i t is clear that b o t h T h m a n d E M M , as T i n n h i m s e l f testified, i n t e n d e d to b e b o u n d o n l y w i t h a s i g n e d w r i t t e n agreement. T h e p a r t i e s ' e x c h a n g e o f n u m e r o u s w r i t t e n d r a f t s r e a f f i r m s T i n n ' s d e p o s i t i o n t e s t i m o n y ; the w r i t t e n a g r e e m e n t w a s n o t i n t e n d e d t o b e a s i m p l e m e m o r i a l i z a t i o n o f a p r i o r oral agreement b u t instead w a s to be the p a r t i e s ' agreement, w i t h o u t w h i c h n e i t h e r party intended to b e bound. F o r t h e s e r e a s o n s , T i n n h a s failed t o p r o d u c e s u f f i c i e n t e v i d e n c e o f t h e e x i s t e n c e o f a n o r a l

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agreement w i t h E M M that allows h i m to survive summary j u d g m e n t o n h i s b r e a c h o f contract claim. 2. T h e S t a t u t e o f Frauds A l t e r n a t i v e l y , T i n n ' s o r a l c o n t r a c t c l a i m i s b a r r e d b y O r e g o n ' s s t a t u t e o f frauds. T h e s t a t u t e provides that " a n agreement that b y its terms is n o t to b e performed w i t h i n a year from the making," is v o i d unless i t is in writing. OR. REv. STAT. 41.580(1)(a) (2007). B e c a u s e T i n n contends t h a t t h e o r a l a g r e e m e n t w a s for a n i n i t i a l t e m l o f t w o years, the a g r e e m e n t i s u n e n f o r c e a b l e u n d e r t h e s t a t u t e offrauds.2 T i n n c o u n t e r s t h a t t h e d o c t r i n e o f p m t perfOlmance t a k e s t h e a g r e e m e n t o u t o f t h e s t a t u t e o f frauds a n d the a g r e e m e n t i s t h e r e f o r e e n f o r c e a b l e . P a r t p e r f o r m a n c e i s a n e q u i t a b l e d o c t r i n e w i t h tlu'ee requirements: First, t h e p a r t y asserting p m t p e r f o r m a n c e m u s t p r o v i d e p r e p o n d e r a t i n g e v i d e n c e o f an agreement t h a t is clear, certain and unambiguous i n its temIS. Second, that p a r t y m u s t p r o d u c e e v i d e n c e o f c o n d u c t c l e a r l y a n d u n e q u i v o c a l l y r e f e r a b l e t o t h e oral agreement, t h a t i s , c o n d u c t t h a t is e x p l a i n a b l e o n l y o n t h e g r o u n d t h a t i t w a s p e r f o r m e d as p a r t o f the contractual quid p r o quo and n o t for s o m e other reason unrelated to the agreement. Last, there must b e equitable grounds for enforcing the agreement.

Mukai Living Trust, 199 Or. App. at 345 (internal quotation marks and citations omitted) (emphasis
i n o r i g i n a l ) . T i m l h a s n o t p r e s e n t e d e v i d e n c e t h a t c r e a t e s a g e n u i n e i s s u e o f m a t e r i a l f a c t o n t h e first e l e m e n t o f t h e p a r t p e r f o r m a n c e exception. T h m ' s o w n t e s t i m o n y a b o u t t h e a l l e g e d a g r e e m e n t ' s tel111S is conflicting, thus preventing h i m from presenting evidence o f an agreement that is "clear, c e r t a i n a n d u n a m b i g u o u s i n i t s t e r m s . " W i t h o u t s u c h e v i d e n c e , n o r a t i o n a l j u r y c o u l d f i n d t h a t the p a r t i e s ' conduct w a s " r e f e r a b l e " to an oral agreement o f clear, certain, and unambiguous terms. F o r

2 T h e s t a t u t e o f frauds s t i l l w o u l d b a r T i n n ' s c l a i m u n d e r h i s i n i t i a l i t e r a t i o n o f t h e a l l e g e d o r a l c o n t r a c t , w h i c h w a s t o b e for a t e r m o f f o u r t e e n m o n t h s .

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this additional reason, summary judgment i n favor o f E M M on T h m ' s breach o f contract claim is appropriate. 3

1.

Estoppel Tinn argues that E M M should be estopped from asseliing a statute o f frauds defense.

Estoppel will bar operation o f t h e statute o f f r a u d s when ' ' ' o n e [against whom the statute is asserted] has acted to his detriment solely in reliance on an oral agreement[.]' . . . Unlike part perfOlmance, conduct that constitutes reliance need not be unequivocab1y refel1'able to the oral agreement." A n g e l v. Reider, 71 Or. App. 10, 13-14,691 P.2d 151 (1984) (quoting Engelcke v. Stoehsler, 273 Or. 937, 944, 544 P.2d 582 (1975)) (additional citations omitted). Courts differ o n whether o r not the estoppel doctrine is subsumed b y the part performance exception to the statute o f frauds o r i f it stands alone. Compare Siegner v. hlterstate Production Credit Association o f Spokane, 109 Or. App. 417, 432, 820 P.2d 20 (describing the part perfoffilance exception and observing, "[a]dditionally, i n an action at law, a party may be estopped, i n appropriate circumstances, from asseliing the Statute o f Frauds."); with Lemley v. Lemley, 221 Or. App. 172, 186 n.9, 188 P.3d 468 (2008) ("Plaintiff urges us to consider whether the agreement is also enforceable under the doctrine o f equitable estoppel. That doctrine is subsumed b y the part performance exception, and w e therefore do not give i t separate consideration."). Regardless o fwhether estoppel is subsumed within or independent from the part performance doctrine, Tilm's estoppel argument fails because he never pleaded estoppel and neverraised the issue until his response to E M M ' s summary judgment motion. Estoppel is an affhmative defense that
3 E M M also cites O r e g o n ' s v e e statute offi'auds, ORS 72.2010, i n support o f its argument. However, the v c e version applies only to the sale o f goods priced over $500, and the alleged contract at issue here is for personal services. Therefore, the uee statute o f frauds does not apply.

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must b e p l e a d e d o r is waived. FED. R. CIV. P. (c)(1); h i re Adbox, Inc., 488 F . 3 d 836, 8 4 1 - 4 2 (9th Cir. 2 0 0 7 ) ("Federal R u l e o f Civil P r o c e d u r e 8(a) and (c) p r o v i d e that a d e f e n d a n t ' s failure to raise a n ' a f f i r m a t i v e d e f e n s e ' i n his a n s w e r effects a w a i v e r o f t h a t defense. See Morrison v. Mahoney, 399 F . 3 d 1042, 1046 ( 9 t h Cir. 2005); 5 CHARLES ALAN WRIGHT, ARTHUR R. MILLER & MARY KAY KANE, Federal Practice & Procedure § 1278 (2d ed.1990)."). S e c o n d , a s s u m i n g w i t h o u t d e c i d i n g t h a t e s t o p p e l i s a s e p a r a t e d o c t r i n e from p a r t p e r f o r m a n c e , T i n n c a n n o t i n v o k e this e q u i t a b l e d o c t r i n e b e c a u s e h e h a s n o t established, s u f f i c i e n t t o s u r v i v e s u m m a r y j u d g m e n t , the e x i s t e n c e o f a n o r a l a g r e e m e n t u p o n w h i c h h e c o u l d h a v e relied. F o r t h e s e r e a s o n s , T i l m ' s e q u i t a b l e e s t o p p e l defense fails a n d is n o t a b a r to granting s u m m m y j u d g m e n t i n favor o f E M M . 4. Ouantum Meruit In its opposition to T i n n ' s s u m m a r y j u d g m e n t motion, E M M a r g u e d that T i n n ' s claim against i t r e a l l y i s o n e for t h e v a l u e o f s e r v i c e s h e r e n d e r e d t o E M M . E M M q u o t e d t h e O r e g o n S u p r e m e C o u r t i n support o f this proposition: " A v e r b a l contract to do w o r k which, b y i t s terms, is n o t to b e p e r f o r m e d w i t h i n o n e year, is void; but, i f the parties treat i t as valid u n t i l a f t e r a p a r t o f t h e w o r k is done, i t cmmot t h e n b e a v o i d e d so as to avoid p a y m e n t o f the r e a s o n a b l e v a l u e o f t h e w o r k that has b e e n perfOlmed." McGilchrist v. F. w: Woolworth Co., 138 Or. 679, 6 8 5 - 6 8 6 , 7 P . 2 d 982 (1932). E M M asserted t h a t T i I m ' s recovery w o u l d b e limited to t h e r e a s o n a b l e v a l u e o f t h e w o r k t h a t h e actually p e r f o n n e d , b u t " [ b ] e c a u s e there is n o evidence t h a t h e h a s n o t a l r e a d y r e c e i v e d adequate c o m p e n s a t i o n f o r t h e w o r k h e d i d , s u m m m y j u d g m e n t o n l i a b i l i t y i s i n a p p r o p r i a t e . " ( D e f . ' s Opp. B r i e f ( " B r . " ) 12.) A t h e a r i n g E M M ' s c o u n s e l r e i t e r a t e d t h i s p o s i t i o n a n d o b s e r v e d t h a t w h i l e E M M d i d n o t o p p o s e T i n n s e e k i n g c o m p e n s a t i o n f o r the v a l u e o f s e r v i c e s h e r e n d e r e d d u r i n g t h e p a r t i e s ' b u s i n e s s r e l a t i o n s h i p , h e w a s n o t a w a r e t h a t T i n n w a s o w e d a n y a m o u n t s for t h o s e s e r v i c e s b e c a u s e

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EMM had paid Tinn during their business relationship. A claim for quantum meruit is a quasi-contractual claim. Robinowitz v. Pozzi, 1 2 7 Or. App. 464, 467, 872 P .2d 993, rev. den., 320 Or. 109 (1994). " T h e elements o f the claim are a benefit conferred, awareness b y the recipient that a benefit has been received, and judicial recognition that, under the circumstances, it would b e unjust to allow retention o f the benefit without requiring the recipient to pay for it." Sajeport, Inc. v. Equipment Roundup & Mfg., Inc., 184 Or. App. 690, 706, 60 P.3d 1076 (2002) (citing Jaqua v. Nike, hIC., 125 Or. App. 2 9 4 , 2 9 8 , 8 6 5 P.2d 442 (1993)). Neither Tinn n o r E M M directly discussed whether T i n n m a y maintain a claim for quantum meruit. W h i l e t h e r e c o r d c o n t a i n s e v i d e n c e t h a t E M M p a i d T i n n d u r i n g t h e i r b u s i n e s s r e l a t i o n s h i p , it is unclear whether or n o t T i n n has received all compensation owed to him for the services he p e r f o n u e d during the time period i n question. To the extent that T i n n m a y n o t have received payment for any part o f the services he rendered during the parties' business relationship, T i n n may proceed on a q u a n t u m m e r i u t theory to obtain recovelY o f any such unpaid amounts. 4 2, E M M ' s Lanham Act Counterclaim Tinn moves for summary judgment on E M M ' s false association and false advertising c o u n t e r c l a i m s o n t h e g r o u n d t h a t E M M h a s p r o d u c e d i n s u f f i c i e n t e v i d e n c e to c r e a t e a g e n u i n e i s s u e o f material fact as to T i n n ' s liability under these claims.

a.

False advertising

A s a pre1iminaIy matter, E M M stated that it " d o e s not intend to pursue a separate claim for

A l t h o u g h T i n n s u r v i v e s E M M ' s summary j u d g m e n t m o t i o n for the l i m i t e d p u r p o s e o f pursuing a quantum meruit theOly, he must rely on the evidence he has obtained during the discovery phase o f the case. The court w i l l n o t permit additional discovety o n this theory, as prior to the close o f discovely i n this case the parties vigorously engaged i n extensive discovery, including on the s u b j e c t o f T i n n ' s p o t e n t i a l damages.
4

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false advertising," b u t t h a t instead the " g r a v a m e n " o f its L a n h a m A c t c l a i m i s false association under 15 u . S . C . § l125(a)(1)(A). ( D e f . ' s Opp. Br. 19.) Therefore, to the e x t e n t t h a t E M M has asserted a L a n h a m A c t c o u n t e r c l a i m i n p a r t b a s e d o n false a d v e l i i s i n g , T i n n ' s m o t i o n for s u m m m y j u d g m e n t is granted. Accordingly, the c o u r t tU111S to E M M ' s false association allegation.

b.

False association

A cause o f a c t i o n for false association under the L a n h a m A c t is g o v e r n e d b y 15 U.S.C.

§ 1 1 2 5 ( a ) ( 1 ) ( A ) , w h i c h reads:
A n y p e r s o n w h o , o n o r i n c o n n e c t i o n w i t h a n y g o o d s o r s e r v i c e s , o r a n y c o n t a i n e r for goods, u s e s i n c o m m e r c e a n y w o r d , term, n a m e , s y m b o l , o r d e v i c e , o r a n y c o m b i n a t i o n t h e r e o f , o r a n y false d e s i g n a t i o n o f origin, false o r m i s l e a d i n g description o f fact, o r false o r m i s l e a d i n g representation o f fact, w h i c h [] is l i k e l y to c a u s e confusion, o r to c a u s e mistake, o r to deceive as to the affiliation, connection, o r a s s o c i a t i o n o f s u c h p e r s o n w i t h a n o t h e r p e r s o n , o r as t o t h e o r i g i n , s p o n s o r s h i p , o r a p p r o v a l o f h i s o r h e r g o o d s , services, o r c o m m e r c i a l activities b y a n o t h e r p e r s o n . . . shall b e l i a b l e i n a c i v i l action b y a n y p e r s o n who b e l i e v e s t h a t h e o r s h e i s o r is l i k e l y to b e d a m a g e d b y s u c h act. 15 U.S.C. § 1125(a)(1)(A) (2008). E M M alleges that, subsequent to the termination o f his relationship w i t h E M M , " T i n n extensively used the E M M [L]abs n a m e and m a r k i n cOlmection w i t h w e b s i t e s p r o m o t i n g h i s s e r v i c e s and p r o d u c t s i n a m a n n e r t h a t falsely s u g g e s t e d t h a t h e w a s a n a u t h o r i z e d distributor o f E M M [p ]roducts, o r w a s associated o r affiliated w i t h E M M i n s o m e w a y . " (Def. ' s Answer, M a y 5, 2008, at 6.) According to E M M , T i n n ' s u s e o f E M M ' s n a m e a n d m a r k violated the Lanham Act. I n h i s m o t i o n , Tirm a s s e r t s t h a t E M M l a c k s e v i d e n c e t o e s t a b l i s h n e c e s s m y e l e m e n t s o f t h i s c l a i m sufficient to sUlvive s u m m a r y j u d g m e n t . I n particular, T h m argues that E M M c a n n o t establish, as a result o f a n outdated reference to E M M Labs o n two o f T i n n ' s b u s i n e s s websites, t h a t a single s a l e o f n e w o r u s e d E M M e q u i p m e n t t o o k p l a c e o r that E M M h a s b e e n o r is likely to b e

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damaged by this reference. EMM responds that its evidence demonstrates that T i n n held h i m s e l f out as an authorized dealer o f E M M products and this is sufficient evidence o f f a l s e association. In support, EMM cites e-mails between Tinn and consumers exchanged after the parties' relationship ended, wherein the consumers inquire about EMM products. Also, EMM maintains, evidence o f damages is not necessmy to state a claim for false association, and a finding o f liability for false association is permissible even where it gives rise to only nominal damages.
L.

Liability for false association

Liability for false association may arise where the defendant has "use[ d] trademarks i n a manner likely to cause the public to believe that the defendant is a pmiicipant in the trademark holder's authorized sales network." Fender Musical Instruments CO/po v. Unlimited Music Center,
Inc., No. 93CV-2449, 1995 U.S. Dis!. LEXIS, at *12 (D. COlm. Feb. 16, 1995) (citingH.L. Hayden Co. o fN Y , Inc. v. Siemens Medical Sys., Inc., 879 F.2d 1005, 1023 (2nd Cir. 1989)). EMM has

submitted evidence sufficient to create a genuine issue o f fact as to whether customers did or were likely to incorrectly believe that Tinn was an authorized dealer o f E M M products long after T i n n ' s association with EMM had ceased. The parties do not dispute that T i n n ' s two websites, bluelightaudio.com and chambersaudio.com, contained references to E M M after the parties' business relationship ended. T h e question is whether these references were likely to cause confusion, and E M M ' s evidence creates a question o f fact on that issue. EMM submitted several e-mails between Tinn and persons who sought to buy or w e r e considering buying EMM products, which e-mails Timl received after his relationship with E M M tenuinated. First, and importantly, EMM submitted an April 2, 2007,
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e-mail from MeHner to Tinn which states: "At this time I must respectfully ask you to remove E M M Labs from your website as it creates the false impression you are a n authorized dealer for E M M . " (Def.'s Opp. Ex. 3 at 51.) This e-mail put Tinn on notice that he still was associating his personal b u s i n e s s e n t e r p r i s e s w i t h E M M p r o d u c t s a n d t h a t E M M o b j e c t e d to t h i s b e c a u s e i t w a s c r e a t i n g a "false impression." S e c o n d , r e g a r d i n g c u s t o m e r impressions, E M M s u b m i t t e d e - m a i l s from p o t e n t i a l c u s t o m e r s who questioned Tinn about E M M products, to which Tinn either failed to respond o r responded i n a way that d i d n o t clarify that his relationship w i t h E M M had ended. On March 14, 2008, a m a n i n Norway wrote: " I ' v e j u s t viewed your web site, and one thing puzzles me: In "Product lines," E m m [sic] is i n BOLD, as i f you no longer carry Emm Labs . . . . D o you now consider E1l11l1not to be good? ! t h o u g h t you also were o n the board in the Enml company?!" ( D e f . ' s Opp. Ex. 3 at 59.) On M a y 3 , 2 0 0 8 , Tinn wrote to another customer that upon comparison with E M M products, TiJm's own product line, Playback Designs, "[was] substantially better sounding in so m a n y ways," than the E M M product. ( D e f . ' s Opp. Ex. 3 at 65.) This e-mail neither disclosed that Tinn no longer was an a u t h o r i z e d d e a l e r o f E M M products n o r that h e w a s t h e o w n e r o f t h e c o m p a n y t h a t m a d e t h e product h e endorsed to this potential E M M customer. And, o n M a y 13, 2008, Tinn replied b y e - m a i l to a potential E M M customer that " E M M Labs [sic] higher price does n o t reflect any performance increase at all. . . . [D]o n o t waste your money." ( D e f . ' s Opp. Ex. 3 at 62.) Other e-mails E M M submitted show similar inquiries and responses. T a k e n together, the continued references to EMM o n T i l m ' s web sites, T i l m ' s failure to respond to potential customers' inquiries, his failure to clarify his relationship w i t h EMM, and his affirmative attempts to steer potential E M M customers to his own product line create a genuine issue
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ofmaterial fact as to whether T i n n falsely associated h i m s e l f w i t h E M M ' s mark, in commerce, such as to cause confusion a b o u t his affiliation with EMM. Therefore, s u m m a t y j u d g m e n t o n this claim is i n a p p r o p r i a t e and T i n n ' s m o t i o n is denied .
.!h

D a m a g e s a r i s i n g ii'om false a s s o c i a t i o n

T h e N i n t h Circuit recognizes that legal damage, as opposed to actual damage giving rise to an award o f damages, i s cognizable under t h e Lanham Act. See Star-Kist Foods, Inc. v. P . l . Rhodes
& Co., 735 F . 2 d 346, 349 (9th Cir. 1984) ("The l a c k o f any actual damage requirement renders

i r r e l e v a n t R h o d e s ' s a r g u m e n t t h a t S t a r - K i s t can, a t m o s t , s u f f e r o n l y n o m i n a l d a m a g e s . . . E v e n i f t r u e , t h a t c l a i m i g n o r e s t h e fact t h a t a p a r t y c a n s t i l l h a v e a r e a s o n a b l e b e l i e f t h a t h e w i l l b e l e g a l l y damaged."); s e e also N e a l v. Thompson, 325 F.2d 978, 984 (9th Cir. 1963) ("Either there h a d been s u c h a c t i o n a b l e m i s a p p r o p r i a t i o n , o r t h e r e h a d n o t been. l f t h e f o r m e r , n o m a t t e r h o w s l i g h t , a c a u s e o f action existed. l f t h e damage w a s so slight as to b e d e minimis, that m l e w o u l d j u s t i f y either a j u d g m e n t for d e f e n d a n t , o r m o r e p r e f e r a b l y ( b e c a u s e m o r e a c c u r a t e ) , a n a w a r d o f n o m i n a l d a m a g e s , such as o n e dollar o r o n e cent."). Therefore, the c o u r t finds that p r o o f o f actual damages is not necessary for E M M to p r e s e n t its false association c l a i m under the L a n h a m Act for determination i n this c o m t . F o r this additional reason, T h m ' s m o t i o n f o r s u m m a t y j u d g m e n t o n E M M ' s

c o u n t e r c l a i m f o r false a s s o c i a t i o n i s denied. 6. T i n n ' s M o t i o n to A m e n d C o m p l a i n t B y m o t i o n filed N o v e m b e r 5, 2008, Timl seeks leave to a m e n d h i s complaint for t h e third time, o n this o c c a s i o n to " s p e c i f y that E M M w a s o b l i g a t e d t o p r o d u c e a n d s h i p e n o u g h u n i t s o f product to allow T i n n to p e r f o r m under the contract." ( P I . ' s Br. 1.) E M M opposes T i n n ' s motion, a r g u i n g t h a t t h i s n e w t e r m o f the a l l e g e d c o n t r a c t w a s n e v e r m e n t i o n e d i n h i s p r i o r c o m p l a i n t s o r

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disclosed during discovery, and b o t h the discovely and dispositive motions deadlines p a s s e d before T i n n f i l e d h i s m o t i o n . ( D e f . ' s O p p . 1-2.) T i n n m a d e h i s r e q u e s t a f t e r t h e S e p t e m b e r 26, 2 0 0 8 , d i s c o v e l y c l o s u r e d a t e , t h e l a s t o f several extended dates granted at o n e o r b o t h p a r t i e s ' request. B o t h Tilm and E M M filed s u m m m y j u d g m e n t m o t i o n s o n O c t o b e r 2 7 , 2 0 0 8 , t h e d i s p o s i t i v e m o t i o n s deadline. S i n c e c o m m e n c i n g h i s suit in J u n e 2007, Tinn h a s amended his original complaint twice to add to o r change h i s allegations o f t h e t e r m s o f t h e a l l e g e d o r a l a g r e e m e n t w i t h E M M . T i n n filed h i s s e c o n d a m e n d e d c o m p l a i n t o n October 29, 2008, exactly o n e w e e k before filing this m o t i o n to amend his complaint a t h i r d time. T i n n ' s m o t i o n to a m e n d i s untimely u n d e r b o t h Federal Rules o f Civil Procedure 15 and 16. A b r i e f r e v i e w o f t h e p r o c e e d i n g s i s i m p o r t a n t c o n t e x t for t h i s c o n c l u s i o n . I n t h e s i x t e e n m o n t h s b e t w e e n the J u n e 2 9 , 2 0 0 7 , f i l i n g d a t e a n d the O c t o b e r 2 7 , 2 0 0 8 , d i s p o s i t i v e m o t i o n d e a d l i n e , t h e parties vigorously litigated the existence and terms o f the alleged oral agreement. Central to this activity w e r e E M M ' s efforts to c o m m i t T i n n to a comprehensive and all-inclusive list o f terms c o n t a i n e d i n t h e a l l e g e d o r a l agreement. T h e s e efforts l e d t o b o t h d i s c o v e l y d i s p u t e s a n d m o t i o n s to compel. U l t i m a t e l y , t h e c o u r t r e s o l v e d t h o s e i s s u e s a n d w h e n d i s c o v e r y closed, b o t h p a r t i e s m o v e d for s u n u n m y j u d g m e n t . T i n n m o v e d to establish E M M ' s liability for breach o f t h e alleged oral agreement and E M M moved to establish that no oral agreement existed. T i n n ' s request to n o w add another material tem1 to his alleged oral agreement is denied for t w o r e a s o n s . F i r s t , i t i s u n t i m e l y , as i t c o m e s w e l l a f t e r d i s c o v e r y c l o s e d a n d e v e n a f t e r t h e dispositive m o t i o n deadline h a s passed. Generally, R u l e 15 governs amendments to pleadings, and i t states i n r e l e v a n t p a r t t h a t w h e r e a p a r t y has already b e e n s e r v e d w i t h a r e s p o n s i v e pleading, " a p a r t y m a y a m e n d i t s p l e a d i n g o n l y w i t h t h e o p p o s i n g p a r t y ' s w r i t t e n c o n s e n t o r t h e c o u r t ' s leave.

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The court should freely give leave w h e n j u s t i c e so requires." FED. R. CIV. P. 15(a)(1)-(2) (2007). T h e court recognizes t h a t a liberal standard is applied to motions for leave to amend. AmerisourceBergen Co. v. Dialysist West, Inc., 465 F.3d 946, 951 (9th Cir. 2006). E v e n so, " a district court need n o t grant leave to amend where the amendment: (1) prejudices the opposing party; (2) is sought i n b a d faith; (3) produces an undue delay i n litigation; o r (4) is futile." Id. Where, however, the court-ordered deadline for amendments to pleadings has passed, a request to amend a pleading first requires the C O U I t to determine whether its scheduling order should b e modified. In those instances, Rule 16 governs. Rule 16 states that " [ a] schedule m a y b e modified o n l y for good cause and w i t h t h e j u d g e ' s consent." FED. R. 0 1 ' . P. 16(b)(4) (2008). Thus, "[a] party seeking to amend a pleading after a scheduling order has b e e n entered pursuant to Federal Rule o f C i v i l P r o c e d u r e 16(b) m u s t f i r s t s h o w ' g o o d c a u s e ' f o r a m e n d i n g t h e s c h e d u l i n g o r d e r b e f o r e t h e c o u r t c o n s i d e r s w h e t h e r t h e a m e n d m e n t satisfies t h e r e q u i r e m e n t s o f R u l e 1 5 ( a ) . " A s h b y v . F a r m e r s Ins. Co., No. 01-CV-1446-BR, 2007 U.S. Dist. LEXIS 97502, at *4 (D. Or. Sept. 26, 2007) (citing Johnson v. Mammoth Recreations, Inc., 975 F . 2 d 604, 608 (9th Cir. 1992)). This district's local lUles further provide that "objections to any court-imposed deadline m u s t b e raised b y motion and must: (1) [S]how good cause w h y t h e deadlines should b e modified[;] (2) S h o w effective prior use o f time; (3) Recommend a new date for the deadline i n question[; and] (4) S h o w t h e impact o f the proposed extension upon other existing deadlines, settings, o r schedules." District o fOregon, L o c a l R u l e s o f C i v i l P r a c t i c e 1 6 . 3 ( a ) (2006). T i n n has n o t s h o w n good cause w h y the c o u r t ' s scheduling order should b e modified to allow h i m to amend his complaint a third time. H e already has amended his original complaint twice prior to the discovery and dispositive motion deadlines, and h e offers no explanation for w h y h e did not OPINION A N D ORDER {KPR}

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include this specific allegation in his three previous complaints o r w h y h e d i d n o t identify this new tern! i n response to E M M ' s intelTogatories o r at deposition. Moreover, T i n n provides neither explanation for why, after the dates were set at the April 7, 2008, scheduling conference, h e could n o t h a v e i n c l u d e d h i s p r o p o s e d a l l e g a t i o n i n h i s first two a m e n d e d c o m p l a i n t s , n o r d o e s T i n n a d d r e s s h o w h i s a m e n d m e n t j u s t i f i e s m o d i f i c a t i o n o f t h e c o u r t ' s A p r i l 7, 2 0 0 8 , s c h e d u l i n g o r d e r . S e c o n d , i f a l l o w e d , t h e a m e n d m e n t w o u l d p r e j u d i c e E M M or, a l t e r n a t i v e l y , w o u l d d e l a y the case. T h e court disagrees w i t h T i n n ' s contention that the telln h e seeks to add to h i s complaint is something that " g o e s without saying," because it does not. T o the contrmy, T i n n seeks to add a significant and material term, namely that E M M w a s legally obligated, to T i n n personally, to m a n u f a c t u r e a n d ship a t l e a s t 3 0 0 units o f E M M ' s C D S A S i n g l e B o x P l a y e r , a n e x p e n s i v e , h i g h - e n d audio component, beginning o n a specific date. T h i s allegation differs substantially from that contained in T i n n ' s S e c o n d A m e n d e d Complaint, wherein h e listed the C D S A Single B o x Player as o n e o f five E M M audio components for which h e would b e the exclusive distributor, w i t h no reference to a start date and n o allegation that E M M w a s obligated to h i m to manufacture o r to c o n t i n u e p r o d u c