Corbin Bernsen v. Innovative Legal Marketing, LLC
Filing
63
MEMORANDUM ORDER: Adopting in part Report and Recommendations re 45 Report and Recommendations.; granting in part and denying in part 18 Motion for Summary Judgment. The court, having examined Bernsen's Objection to the R&R, and having reviewed the record and made de novo findings with respect to the portion objected to, does hereby adopt and approve the findings and recommendations set forth in Sections A and C(2)-(5) of the R&R, concerning the morality clause in the Agreement and dismissal of Bernsen's unjust enrichment claim. The court does hereby modify the findings and recommendations set forth in Section C(l) of the R&R, concerning a conclusion of law on ILM's potential waiver of its rights under the Agreement, as discussed above. Accordingly, ILM's Motion for Summary Judgment is GRANTED in part and DENIED in part. The court finds as a matter of law that the language of the Agreement includes a morality clause; however, the court declines to find as a matter of law that ILM has not waived its rights under the Agreement, because a material fact remains in dispute, namely ILM's intent to waive. The court DENIES ILM's motion as to Bernsen's alleged breach of the morality clause, because material facts remain in dispute concerning Bernsen's conduct and waiver. Finally, the court GRANTS ILM's motion on Bernsen's claim for unjust enrichment, and DISMISSES that claim. The Clerk is DIRECTED to forward a copy of this Order to counsel for all parties. Signed by District Judge Rebecca Beach Smith and filed on 8/14/12. Copies distributed to all parties 8/15/12. (ldab, )
FILED
UNITED
STATES
EASTERN
DISTRICT
DISTRICT
Norfolk
OF
COURT
AUG
VIRGINIA
1 4 2012
Division
CLERK, US DISTRICT COURT
NORFOLK, VA
CORBIN
BERNSEN,
Plaintiff,
v.
ACTION NO.
INNOVATIVE
LEGAL
MARKETING,
2:llcv546
LLC,
Defendant.
MEMORANDUM
This
matter
Judgment
April
filed
27,
Federal
The
and
Judge
and
20,
Rule
of
Civil
part
recommended
had
not
language
ILM's
that
waived
with
of
its
the
Corbin
the
("ILM")
by
on
May
Order
U.S.C.
§
on
States
18,
2012,
636(b)fl)(B)
argument
on
June
Recommendation
j udge
court
recommended
Specifically,
find
under
Bernsen
Agreement
LLC
Summary
United
oral
motion.
rights
for
and
72(b).
and
magistrate
Motion
to
28
heard
Report
a
referred
Miller
of
on
Marketing,
was
Procedure
judge
The
in
motion
E.
court
Legal
provisions
his
2012.
("Agreement")
the
the
magistrate
granting
j udge
ILM
Douglas
to
the
Innovative
The
filed
June
by
before
2012.
Magistrate
pursuant
comes
ORDER
as
a
a
included
denying
the
and
morality
on
in
part
magistrate
of
spokesperson
a
2012,
("R&R")
matter
("Bernsen"),
5,
law
that
agreement
that
while
clause,
the
court
should
deny
that
clause.
recommended
for
unjust
the
R&R,
ILM's
R&R
that
the
court
parties
and
thereto.
Plaintiff's
Objection
&
Response
on
July
Pursuant
Procedure,
the
entirety,
of
the
Civ.
whole
shall
R&R
P.
or
to
2012,
By
to
file
the
Judge
court
Miller's
copy
of
written
received
June
Objection").
claim
ILM
20,
2012
filed
its
72(b)
court,
make
a
of
having
de_
has
specifically
court
in
the
recommendation
to
may
him
accept,
of
with
Rules
the
determination
The
matter
Federal
reviewed
novo
Bernsen
the
record
of
its
portions
objected.
or
Civil
in
those
reject,
the
of
Fed.
modify,
magistrate
instructions.
R.
in
judge,
or
28
U.S.C.
and
having
636(b)(1).
The
made
de
court,
novo
Objection.
forth
in
ILM's
Motion
IN
Bernsen's
right
5,
July
further
Id.
their
of
2012.
which
the
claim.
breach
judge
on
of
("Bernsen's
Rule
part,
motion
that
72(b).
recommit
§
19,
to
advised
alleged
magistrate
ILM's
Magistrate
Recommendation
Bernsen's
The
grant
On
to
to
dismiss
were
objections
Report
as
23-24.
enrichment
the
motion
the
PART.
determination
having
findings
examined
with
Accordingly,
R&R
are
for
Summary
At
on
a
respect
the
adopted
in
part
Motion
is
level,
for
Objection
thereto,
findings
Judgment
threshold
ILM's
Bernsen's
sustains
and
and
recommendations
modified
GRANTED
IN
however,
Summary
Bernsen's
in
PART
in
part,
and
making
Judgment,
the
set
and
DENIED
this
court
ADOPTS
the
recommended
findings
of
undisputed
material
fact
set
when
the
forth in the R&R.1
I.
Summary
court,
issue
of
judgment
477
judgment
viewing
favorable
to
the
the
as
a
if
the
has
element
that
burden
317,
of
323
To
a
Rule
as
and
of
that
finds
on
v.
Celotex
v.
genuine
Lobby,
grant
of
party
most
entitled
adequate
that
Corp.
no
is
should
existence
which
light
is
Liberty
after
the
the
party
court
party,
in
there
moving
A
case,
appropriate
and
Anderson
establish
trial.
is
whole
the
(1986).
party's
at
a
law.
to
56
party,
nonmoving
failed
proof
Inc.,
summary
time
an
to
for
essential
will
bear
Catrett,
477
the
U.S.
(1986).
defeat
party must
relying
fact
248-50
discovery,
of
record
matter
242,
judgment
under
nonmoving
material
U.S.
Summary Judgment: Standard
go
upon
genuine
a
beyond
the
for
without
for
facts
affidavits,
issue
statements,
motion
trial.
v.
1998) .
"there
must
find
1 See R&R 2-8.
for
the
See
specific
Causey
reasonably
alleged
depositions,
insufficient.
Rather,
summary
Balog,
be
judgment,
in
or
at
evidence
324.
evidentiary
162
F.3d
on
instead
to
support,
802
which
the
477
show
Conclusory
795,
Anderson,
nonmoving
pleadings,
other
id.
evidence
plaintiff."
the
the
U.S.
are
(4th
jury
at
Cir.
could
252.
II.
Bernsen
magistrate
raises
judge's
waived
its
alleged
one
violation
the
to
of
the
court
of
law,
"ILM
Bernsen's
sustains
the
"[w]hile
Bernsen
theoretically be
"that
ILM
violations
conduct
both
of
for
parties
waiver
the
some
Examining
Virginia
For
See
Elec.
of
ILM
has
the
not
on
based
any
reasons
under
a
set
to
put
to
as
Co.
the
any
ILM's
1;
v.
Norfolk
jury
that,
can
evidence
Resp.
1.
allegation
for
knew
his
about
R&R
9.
unambiguous
Obj.
ILM
Agreement
him."
an
a
clause
forth
an
alleged
Response
company
contains
waive
raises
the
terminating
Bernsen's
Power
the
contract."
Bernsen's
terminate
clause
for
clause."
matter
whether
non-waiver
addressed
to
thus
its
a
may
Agreement
in
as
the
party
and
the
failed
R&R
that,
agreement
that
Agreement
&
R&R
a
contends
has
prior
the
the
clause
right
morality
time
the
the non-waiver
the
its
agree,
provision.
he
in
conduct,
correct
of
waived
that
the
Objection.
that
ILM
waived,
C(l)
clause.
rights
terminate
the waiver of
Section
law
contesting
Agreement
argues
2-3.
is
the
its
its
morality
at
R&R,
of
Bernsen's
waived
by
of
matter
finding
Bernsen
Id.
support
the
1.
question.
to
to
to
the
R&R Recommendation
not
right
a
morality
provision
its
violations
has
Obj.
anti-waiver
waived
objects
as
to
terminate
A.
Bernsen
Objection
objection
finding
rights
forth below,
Bernsen's
ILM's
S.
Ry.
As
anti-
Resp.
1.
Co.,
278
Va.
444
(2009),
law,
an
from
the
enforcing
magistrate
anti-waiver
the
provision
terms
done so previously."
case
similarly
concluded
prior
to
his
an
terms
B.
preclude
agreement
even
though
defendant
it
had
not
Given that the Agreement in this
because
knew
does
of
the
Virginia
ILM
not
give
of
rise
the Agreement."
the
magistrate
Bernsen's
to
a
conduct
waiver
of
its
Id.
Waiver of an Anti-Waiver Provision
"is
legal
under
provision,
termination
Waiver
the
not
that,
anti-waiver
"simply
rights under the
known
of
stated
"did
R&R 10.2
has
judge
judge
the
right.
voluntary,
It
has
two
intentional
essential
abandonment
elements:
(1)
of
a
knowledge
2 The court does not find Virginia Electric to be controlling on
the
issue
the
striking
of
waiver
an
&
Co.,
address
waiver.
Supreme
Court
provision
contract
of
As
had
of
in
a
would
fact."
issue,
Id.
had
Id.
and
developed
In
time,
to
that
court
only
notice
forward.
a
is
of
a
would
calculated
at
prove
533.
acts,
J.,
its
from
Virginia
to
for
prospectively
contractual
time
trier
is
is
instant
right
Thus,
defense
Electric
a
the
course
Electric
"the
estoppel
the
the
in
or
dissenting).
in
waiver
contractual
damages
non-waiver
a
viable
contained
from
by
a
affirmative
Southern
precluded
one
Virginia
of
Virginia
waive
judicial
basis
defense
the
conduct,
plaintiff
viable
reassert
522,
the
"by
case,
a
fact.
Norfolk
Id.
to
factual
assert
it
as
the
if
Court
alleged
may
(Koontz,
the
instant
trier
on
defendant
plaintiff
476-77
waiver
the
failing
such
party
Virginia
Supreme
defense
had
ruling
elements
case."
striking
waiver
"a
chance
the
the
including
estoppel,
thus
for
at
for
"the
Virginia
highlighted,
plaintiff
because
this
Electric,
court's
because
in
The
grounds
Virginia
circuit
waiver
466.
found
the
the
distinguishable
after
not
case,"
judicial
have
at
dissent
contract
this
of
In
a
established
Va.
the
defense,
dealing."
absent
were
case.
upheld
defense
278
estoppel,
affirmative
instant
alternative
Id.
judicial
the
Court
estoppel
Power
not
in
Supreme
affirmative
judicial
Elec.
did
of
Virginia
not
an
to
be
otherwise
case,
period
advised
right,
of
of
and
as,
of
the
the
prospective
of
the
intent
facts
to
basic
to
relinquish
S.E.2d 722, 725
the
exercise
that
(Va.
of
right."
1989).3
the
right,
Bergmueller
(2)
the
Minnick,
v.
and
383
"Waiver need not be express: it may
be inferred from the conduct of the waiving party."
Co.
v.
AT&T
17432,
Life
at
Comm'cns,
*13
Ins.
Inc.,
(4th Cir.
Soc'y v.
No.
92-2050,
13,
1993)
July
Grant,
38
S.E.2d
existence of an anti-waiver clause
an
intent
however,
not
themselves
shown
World,
38
conduct,
S.E.2d
Here,
Obj.
to
3.
the
rights
to waiver."
acts,
decision
as
right.
or
a
to be
at
conduct
a waiver of its
R&R 10,
is
thus
whether a genuine
World
1946)).
{Va.
contract
rights
under
Id.
the
at
course
to
no
issue
The
is
under
'no
*14.
of
dispute
evidence of
the
contract;
"[l]ike
waiver'
all
clause
are
Such waiver
dealing."
to
the
prior
to
the
turns
ILM's
R&R
that
"for months,
terminate
Bernsen
in
454
LEXIS
can be
Woodmen
of
454.
incidents
statement
intent.
the
App.
of
necessarily control," because,
appears
dispute
450,
the
U.S.
(citing Woodmen
in a
The question of waiver thus
contractual
Bernsen's
at
there
alleged
material
3 The
rights,
subject
"by
prior
relinquish
"it does not
contractual
of the
to
1993
Perry Enq'g
to
that
his
and even
to
Bernsen's
is a
relinquish
pieces
because
termination does
some
years,"
on whether there
three
"simply
knew of
Agreement.
intent
points
ILM
not
of
ILM
give
its
evidence
knew
rise
of
to
rights
under
the
terms
of
the Agreement,"
insufficient;
the
court
must
then
examine
dispute of material fact exists as to ILM's
as
creating
ILM
a
jury
continued
potentially
under
of
the
the
its
evidence,
that
the
entirely
The
ILM's
and
five
contract's
conduct
finds
courts
a
provision,
ILM
is
both
use
of
be
it
of
as
a
party
who
Bernsen
the
benefit
right
have
clause
to
in
with
notwithstanding
an
contest
.
.
with
The
its
conduct
plausible.
under
of
exercising
under
a
contract
also
an
can
affirmative
enforce
that
the
evidence
anti-waiver
a
intent
of
the
course
of
by
to
morality
repeated
its
However,
R&R
is
ILM
clause.
declination
intent
provision.
the
Bernsen's
non-waiver.
4-6,
are
3.
benefits
enjoyment
its
rights
payment
party
stating
violative
found
contract
not
potentially
subsequently
a
a
of
and
see
similarly
the
with
right
consistent
collecting
characterizations
of
clause,
.
Resp.
enjoyment
incidents
does
knows
continued
payment,
by
consistent
ILM's
the
pay
insufficient,
Bernsen,
consistent
use,
ILM
non-waiver.
parties'
contractual
of
4.
[after
reap
to
entirely
right
with
continued
entirely
Other
enforce
characterizes
by
morality
its
at
"(1)
to
advertisements
separate
waive
continued
its
Id.
waive:
years
in
customers."
may
bargained-for
after
ILM
non-waiver provision."
continued
continuation
(2)
two
continued
consistent
endorsement
almost
to
ILM
but
court
Agreement,
for
intent
(3)
contractual
protected by a
ILM's
and
"conduct
bargained-for
Bernsen
to
Bernsen
of
from
as
conduct];
Agreement;
this
is
use
violative
use
payments
to
question
to
waive
See
to
the
Perry
Eng'g
Co.,
1993
from
AT&T's
submitted
the
after
can
38
be
Even
S.E.2d
Response
makes
1987
late
agreement
this
reasonable
Viewing
use
a
acts,
Olga's
LEXIS
2205,
by
a
a
may
at
waive
persistent
intent
course
its
Kitchen
(6th
a
to
waive
generally Woodmen
of
*12
infer
adjustments
intended
party's
or
See
inferences
the
could
of
in
the
in
Plumbing
evidence
find
that
of
to
dealing").
position
v.
Papo,
Cir.
Feb.
in
its
No.
85-
16,
in
1987)
clause
of
course
conduct
of
waive
^nonwaiver'
ILM's
respect
that
convincing
burden.
favor
in
the
that
ILM's
judge's
of
the
light,
the
of
intent
the
to
its
Similarly,
evidence,"
function
3.
is
and
that
However,
not
"at
himself
8
court
after
in
a
accepting
Reeves
(2000).
concludes
in
"all
that
payment
the
a
and
incidents
Agreement
provision
with
other courts have
demonstrated by "clear
Bernsen
to
150
repeated
numerous
draw
party."
133,
anti-waiver
the
must
continued
clause
implied waiver must be
Resp.
U.S.
ILM's
morality
waive
court
non-moving
530
endorsement
of
the
Inc.,
evidence
to that clause.4
ILM argues
litigation,
Prods.,
Bernsen's
demonstrate
the
that
support
violative
and
ILM
it
See
in
potentially
4
cases.").
conduct,
lessor
stage
Sanderson
jury
price
that
could
payments.").
At
v.
("One
elapsed
(holding
by
App.
("A
all
*14
approving
of
at
point.
this
(unpublished)
had
454
"by
17432,
practice
in
cited
U.S.
LEXIS
days
at
evidenced
case
lease
ten
deadline
the
1591,
App.
consistent
ten-day
World,
U.S.
cannot
summary
weigh
meet
this
judgment
stage
the
evidence
and
held
that
waiver,
even
question
best
left
Standard
Life
Ins.
proof
waiver
see
of
also
itself
occurred
the
Co.,
Given
a
contradictory
relates
to
the
Bernsen's
weight
any
that
the
court
and
entitled
DENIES
alleged
and
court,
having
determine
is
a
reviewed
the
genuine
Drawing
having
all
finds
that
issue
of
truth
issue
of
reasonable
Bernsen
intent
to
be
instructed
will
need
to
determine
Motion
for
and
fact") ;
869,
is
872
that
contract,
by
an
is
of
modification
or
course
has
potentially
a
valid
evidence
court
matter
Summary
and
as
it
declines
to
of
law.
Judgment
As
as
to
clause.
made
but
a
the
whether
to
Objection
cte
determine
in
sufficient
genuine
clear
issue
and
Bernsen's
to
R&R,
with
whether
477
Bernsen's
the
findings
novo
Anderson,
presented
on
the
the
as
Bernsen's
matter
it
F.2d
that
Conclusion
inferences
has
will
waiver,
trial."
make,
jury
level.
the
of
...
submitted
judgment
record
for
two
the
thus
examined
the
of
the morality
Ill.
The
of
to
of
645
in
waiver
(noting
a
factfinder.").
ILM's
breach
terra
Jefferson
trier
modification
recognition
intent,
the
authority
such
interpretations
is
of
for
usually
v.
(1982)
Shelton,
other
whether
for
v.
is
Assocs.
485
question
Corp.
provision,
Link
479,
waiver or
court's
ILM
See
Va.
a
like
to
ILM's
that
223
Credit
question
the
anti-waiver
jury.
"usually
clause,
and
is
an
("[T]he
subject
performance
such,
is
1981)
'anti-waiver'
find
to
Westinghouse
Cir.
(10th
of
U.S.
favor,
the
evidence
for
evidence
249.
court
on
the
as
the
standard
and
trial,
convincing
there
at
rises
to
that
respect
to
approve
the
and
the
findings
C(2]-(5)
of
Agreement
and
The
court
does
set
forth
law
on
as
portion
in
the
discussed
part
that
and
the
has
hereby
modify
DENIED
court
the
DENIES
copy
R&R,
of
its
clause
in
A
the
claim.
recommendations
concerning
Motion
part.
the
a
under
The
to
rights
in
ILM's
Summary
court
Agreement
declines
its
for
conclusion
the
of
Agreement,
find
as
under
dispute,
motion
as
finds
a
namely
to
and
that
Order
on
claim.
to
counsel
The
Clerk
for
ILM's
facts
claim
all
a
is
morality
of
law
intent
alleged
remain
is
unjust
DIRECTED
of
law
clause;
that
ILM
because
to
a
waive.
breach
in
Finally,
for
GRANTED
matter
Agreement,
waiver.
Bernsen's
a
Bernsen's
conduct
motion
as
matter
the
material
ILM's
Judgment
includes
because
this
and
Sections
enrichment
and
rights
adopt
in
morality
findings
clause,
DISMISSES
of
the
forth
unjust
Bernsen's
concerning
and
in
remains
morality
GRANTS
of
the
hereby
set
the
Bernsen's
waiver
of
court
fact
The
C(l)
ILM's
waived
material
does
above.
the
not
concerning
of
language
however,
R&R,
potential
to,
recommendations
dismissal
Accordingly,
in
and
Section
ILM's
objected
of
dispute
the
court
enrichment,
to
forward
parties.
([
Rebecca Beach Smith
it is so ordered.
Chief
United States District Judge
REBECCA
CHIEF
Norfolk,
August
Virginia
^a
,
2012
10
BEACH
UNITED
SMITH
STATES
DISTRICT
JUDGE
a
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