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Image Media Advertising, Inc. v. Clear Channel Outdoor, Inc.

United States District Court, N.D. Illinois, Eastern Division

August 13, 2019

IMAGE MEDIA ADVERTISING, Inc., Plaintiff,
v.
CLEAR CHANNEL OUTDOOR, Inc., Defendant.

          MEMORANDUM OPINION AND ORDER

          VIRGINIA M. KENDALL, UNITED STATES DISTRICT JUDGE

         Image Media Advertising, Inc. sued Clear Channel Outdoor, Inc. claiming Clear Channel breached a contract between the two parties when it bid on a Chicago Transit Authority (CTA) request for proposal (RFP) to build and manage billboards on one of its train yards, even though the parties' contract allegedly stated Image Media had the right to bid on, construct, and operate billboards on the yard. Clear Channel moved to dismiss (Dkt. 14) the breach-of-contract claim principally arguing that the contract included no right to put up any additional billboards, and even if it did, that right only extended to the property defined in the contract. For the reasons discussed below, the Court grants Clear Channel's motion (Dkt. 14) without prejudice. Image Media may replead, if possible, within 28 days of the publication of this Opinion.

         BACKGROUND

         Image Media is a family-owned billboard sign company that advertises primarily along expressways near Chicago. (Dkt. 1-1 ¶ 8.) It earns revenue by selling the rights to advertise on these billboards to various companies. Id. Around March 17, 1997, Image Media entered into a contract-the so-called “CTA Billboard Lease”- with the CTA, receiving the right to construct, operate, and maintain billboards on a specific parcel of CTA property. Id. ¶ 9.

         The agreement specified that “[t]he property shall be used solely to place and handle advertising by means of displays on three outdoor advertising structures (as hereinafter defined) and for no other purpose whatsoever, subject, however, to all of the terms and conditions hereinafter set forth.” (Dkt. 14-1 at 2-3, § 1.1(a) (emphasis added).) Furthermore, it stated that “[t]his Agreement is for the Property only. Nothing in this Agreement shall affect in any way the Authority's right or ability to grant, sell or otherwise convey advertising rights in connection with locations other than the Property.” Id. at 3, § 1.2(a) (emphasis added). The CTA Billboard Lease defines “the Property” as:

approximately 60 feet by 1, 695 feet and which is bounded by the Eisenhower Expressway on the south, the Authority's Des Plaines Avenue Terminal on the east, the Des Plaines River on the west, and Concordia cemetery property on the north, in Forest Park, Illinois as more fully described on the plat of survey attached hereto as Exhibit A-1 (the “Property”).

Id. at 2.

         Image Media constructed and then sold the three billboards, among other assets and permits, to Clear Channel. (Dkt. 1-1 ¶¶ 10-13.) Around February 27, 2003, Image Media and Clear Channel entered into another agreement, wherein Clear Channel assigned its rights regarding the billboards back to Image Media. Id. ¶ 15. This ‘sublease' noted, apparently for the first time, that “Image Media shall have the right to construct and operate any such Additional Billboards on the CTA property pursuant to the CTA Billboard Lease; and Image Media . . . [is] hereby released with respect to such Additional Billboards . . .” Id. ¶ 18.

         Image Media thus pursued local permits and license agreements in order to construct these “additional billboards.” Id. ¶¶ 20-24. Sometime between July 2006 and February 2007, Image Media “submitted a proposal to the CTA to construct and operate the Additional Billboards and negotiated with the CTA to obtain the right to construct and operate the two of the Additional Billboards.” Id. ¶ 25. The CTA informed Image Media that it would have to issue an RFP for any additional billboards. Id. ¶ 26. The CTA eventually did issue the RFP, but for a large quantity of various properties, not just the site for the potential additional billboards. Id. ¶ 27.

         The site for the additional billboards is located on a parcel called the Des Plaines Yard, 711 Des Plaines Avenue. (Dkt. 14-2 at 67, 69, 120.) The Des Plaines Yard is in Forest Park, as is ‘the Property,' but the locations do not overlap. The Des Plaines Yard is north of the Eisenhower Expressway and not in the narrow strip of property between Concordia Cemetery and the Eisenhower Expressway. See generally Dkt 14-3. An overlap is especially implausible because ‘the Property' defined in the CTA Billboard Lease fixes the CTA's Des Plaines Avenue Terminal, located at 711 Des Plaines Avenue, as its eastern boundary. See generally id.

         Ultimately, the CTA selected Clear Channel's bid, and around July 17, 2008, the CTA and Clear Channel entered into an agreement that granted Clear Channel the “‘sole and exclusive license to sell, install, display, operate and maintain billboard advertising on the properties.'” (Dkt. 1-1 ¶ 28.) This agreement purportedly included the rights to the additional billboards. Id. ¶ 29. As a result, the CTA stopped all negotiations with Image Media from early 2008 through early 2010 while the agreement with Clear Channel was in effect. Id. ¶ 32.

         Clear Channel and the CTA eventually rescinded their contract, but not before delaying Image Media's procurement of an agreement regarding the additional billboards for more than two years. Id. ¶¶ 31, 34-35. Nonetheless, the CTA resumed its negotiations with Image Media in 2010. Those negotiations, however, were bound by the terms of the original CTA Billboard Lease, which runs until 2022. Id. ¶ 36. Image Media now believes that the construction of any additional billboards is not economically feasible in this narrow time frame. Id. ¶¶ 38-39. Image Media sought to extend its contract with the CTA, but to no avail. Id. ¶ 37.

         In 2015, Image Media allegedly discovered that Clear Channel was under contract with the CTA to design the additional billboards during the time period that its own negotiations with the CTA stalled. Id. ¶¶ 30-31. Image Media thus blames Clear Channel for this delay because it “ultimately destroyed” any possibility that Image Media would reach an economically beneficial agreement with the CTA. Id. ¶ 44. Image Media sued Clear Channel in this Court to recover for its loss. (Dkt. 1.)

         STANDARD ...


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