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David Mizer Enterprises, Inc. v. Nexstar Broadcasting, Inc.

United States District Court, C.D. Illinois, Springfield Division

October 19, 2017

DAVID MIZER ENTERPRISES, INC., Plaintiff,
v.
NEXSTAR BROADCASTING, INC., Defendant.

          ORDER

          SUE E. MYERSCOUGH, U.S. District Judge.

         This cause is before the Court on Plaintiff David Mizer Enterprises, Inc.'s Motion for Summary Judgment (d/e 57). Because genuine issues of material fact remain, the Motion is DENIED.

         I. FACTS

         Plaintiff is a corporation that provides technology services across the United States. David Mizer (Mizer) is the president of Plaintiff. Plaintiff created a business model and supporting technology for providing services to automobile dealers, which included a system to manage inventory and facilitate web-based automobile shopping.

         Defendant is a telecommunications company that operates television stations throughout the country. Defendant wanted to use Plaintiff's product with its current and prospective automotive dealership advertising customers.

         On or about August 27, 2008, the parties entered into a written Licensing Agreement with a term from January 1, 2008 through December 31, 2010. The Agreement did not specify an automatic extension beyond the stated termination date. The Agreement provided that either party could terminate the Agreement without cause upon 60 days written notice and immediately for any breach of the Agreement. In addition, Defendant could have terminated its obligations under the Agreement by simply not deploying Plaintiff's software to any of Defendant's stations. Defendant never provided a notice of termination to Plaintiff during the term of the Agreement. The Agreement terminated on December 31, 2010.

         The Agreement allowed Defendant to host propriety and copyrighted pages (code)[1] owned by Plaintiff on Defendant's servers. Defendant had the ability to add and remove the software from its television stations' websites. Plaintiff's software allowed Defendant's television websites to carry a webpage that visitors to the website could use to search for new and used cars in their local market.

         Plaintiff was not responsible for the end revenue or profit Defendant received from the advertising relationships Defendant entered into with the automobile dealerships. Instead, Plaintiff provided the infrastructure for managing the data related to the automobile web sales and hosted the content of such data. Plaintiff was also responsible for troubleshooting any problems that arose.

         Under the Agreement, Defendant could use Plaintiff's proprietary software and business model for three years in exchange for certain fees as outlined in Appendix A of the Agreement. Plaintiff charged a monthly base fee per dealership. If Plaintiff provided the data source-which the Agreement defined as the means by which information about specific automobiles is gathered and provided to Plaintiff-Plaintiff charged a one-time set up fee and an additional charge per month per dealership. A cap of $1, 000 per month per market area applied to pre-owned vehicles. Appendix A provided that Defendant would pay Plaintiff each month the amount due pursuant to the fee schedule. The Agreement did not indicate whether Plaintiff would submit invoices or whether Defendant would calculate on its own the amounts due. In April 2008, approximately four months after Defendant began using Plaintiff's program, Ambrose Rivera, Plaintiff's contact person with Defendant at that time, emailed Plaintiff asking for the total amount Defendant owed to date for Plaintiff's work. In response to that request, Plaintiff set up an aggregated markets link, which allowed Defendant to review the participating dealerships for each of Defendant's station websites. By doing so, Defendant had the ability to track the program billing. While it appears that Defendant paid Plaintiff in accordance with Rivera's request, Defendant failed to pay Plaintiff for the use of Plaintiff's propriety software and business model during the remaining term of the Agreement. See April 5, 2013 email (Mizer telling Rivera's replacement, Todd Hartsell, that Mizer believed Defendant paid the invoices submitted per Rivera's request; Hartsell no longer works for Defendant).

         In December 2012, Plaintiff contacted Defendant to discuss Defendant's nonpayment. Plaintiff submitted a spreadsheet with market and billing information for the entire term of the Agreement. Defendant denies that Plaintiff is entitled to payment under the Agreement because of Plaintiff's poor performance and because the late submission of invoices deprived Defendant of the information needed to verify Plaintiff's claims. Defendant did not, however, raise the affirmative defense of waiver in its Answer.

         The Agreement also prohibited Defendant from using, making available, selling, disclosing, or otherwise communicating to any third party Plaintiff's confidential information, either during or after the Defendant's relationship with Plaintiff, without prior written approval of Plaintiff's president. In addition, the Agreement required Defendant to immediately deliver to Plaintiff all copies of all materials and writings belonging to Plaintiff when the relationship ended. Plaintiff asserts that Defendant violated this provision because Defendant continued to use Plaintiff's product after the contract term expired, specifically from January 1, 2011 until early February 2013. Plaintiff also asserts that Defendant's station's websites generated 126 leads[2] after the Agreement expired. Defendant disputes this, asserting that Defendant disabled the program but that it was possible that cached[3] pages of the inactive web pages might be accessible under certain circumstances.

         Plaintiff also brings claims relating to the development of a potential website named Auto Buy Cell. The idea behind Auto Buy Cell was to allow customers to use their cellphone to scan a code on an automobile dealer's vehicle and pull up information about that vehicle. The parties agree that Helen Agnew, who worked for Defendant at that time, was in charge of developing Auto Buy Cell. The parties dispute whether Agnew acted for her own benefit or in her capacity as an employee for Defendant.

         Plaintiff's involvement with Auto Buy Cell began in early 2011. Agnew testified that she involved Plaintiff not to develop software but to find a way of getting dealer inventory to the Auto Buy Cell program.

         In June 2012, Plaintiff disconnected from the Auto Buy Cell project. At this time, the project had only advanced to the point that it was a test site for developmental purposes. Plaintiff claims that, despite disconnecting from Auto Buy Cell, Defendant copied Plaintiff's actual software code without Plaintiff's authorization. Agnew claims that the webpage and software that appeared on the Auto Buy Cell website was her creation.

         II. LEGAL STANDARD

         Summary judgment is proper if the movant shows that no genuine dispute exists as to any material fact and that the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). The movant bears the initial responsibility of informing the court of the basis for the motion and identifying the evidence the movant believes demonstrates the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

         When ruling on a motion for summary judgment, the court must consider the facts in the light most favorable to the nonmoving party, drawing all reasonable inferences in the nonmoving party's favor. Blasius v. Angel Auto., Inc., 839 F.3d 639, 644 (7th Cir. 2016). No genuine issue of material fact exists if a reasonable jury could not find in favor of ...


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