Opinion ID: 59477
Heading Depth: 4
Heading Rank: 1

Heading: Sufficiency of the Evidence of Breach of the License

Text: Amigo argues that Garza and Bernal also breached their Employment Agreements by allowing SBS to use their names and likenesses for commercial purposes without Amigo's consent. Amigo contends that this was a breach of the License set forth in Section 1.1, which states: Employee hereby grants Employer a nonexclusive [16] royalty free license to use Employee's name and/or likeness to promote [KHHL] and its programming, including any program hosted by Employee or syndicated by Employer, during the term of this Agreement and any period thereafter during which Employee is prohibited from competing with Employer as set forth in Section 1.8(b) hereof. [17] During [this period], employee shall not permit any other party to use Employee's name and/or likeness for commercial or other business purposes without first obtaining the written consent of Employer. . . . In response, Garza and Bernal contend  and the district court found  that the License in Section 1.1 was only enforceable during Garza's and Bernal's employment at Amigo. Specifically, Garza and Bernal argue that, because Section 1.1 grants Amigo a licence that remains in effect for 12 months after termination of the Employment Agreements, it constitutes a restraint on trade unrestricted in scope or geographic area and is unenforceable under Texas law. Even if Garza and Bernal are correct that the License is unenforceable for the 12 months after the term of the Employment Agreements expires, the License was still in effect under Section 1.1 during the term of this Agreement, and the term of the Employment Agreements was at least three years  until April 2005. Under Section 1.3, the term of the Employment Agreements could only be cut short in accordance with the provisions of Section 1.6. Because we already determined that Garza's and Bernal's resignations were not in accordance with Section 1.6, their resignations did not cut the Initial Term  and accordingly the term of the License  short. Furthermore, even if the License acts as a restraint on trade during the term of the Employment Agreements, such a restraint is not impermissible and does not violate public policy. 42 Am.Jur.2d Injunctions § 130 (2003) (Covenants not to accept employment with anyone but the employer during the term of the contract are not opposed to public policy and have been held to be valid.) (emphasis added); cf. Mission Indep. School Dist. v. Diserens, 144 Tex. 107, 188 S.W.2d 568, 569-70 (1945) (granting an injunction preventing a former employee from performing services for another employer during the term of her employment agreement where performance of such services constituted a breach of contract and the employee's services were special, unique, or extraordinary). [18] Thus, the License was enforceable until at least April 2005, and it is undisputed that SBS used Garza's and Bernal's radio names and likenesses for business purposes without Amigo's permission prior to April 2005. Garza and Bernal, however, further contend  and the district court found  that the names referred to in the License are unambiguously their legal names, not their radio names, and, thus, they were not in breach of the License by allowing SBS to use their radio names. Amigo, on the other hand, argues that the term names in Section 1.1 creates a latent ambiguity  as Garza and Bernal had legal names and radio names  and this latent ambiguity precluded the district court from granting judgment as a matter of law. Whether a contract is ambiguous is a question of law for the court to decide by looking at the contract as a whole in light of the circumstances present when the contract was entered. Coker, 650 S.W.2d at 394. A latent ambiguity exists if the meaning of language used in a written agreement becomes uncertain when applied to the subject matter of the contract. Loaiza v. Loaiza, 130 S.W.3d 894, 905 (Tex.App.2004), cited in Dell Computer Corp. v. Rodriguez, 390 F.3d 377, 389 n. 24 (5th Cir.2004) (emphasis added). The latent ambiguity, however, must become evident when the contract is read in the context of the surrounding circumstances, not after parol evidence of intent is admitted to create an ambiguity. Nat'l Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517, 521 (Tex.1995) (emphasis added). Thus, in determining whether a latent ambiguity exists, courts may examine surrounding circumstances and the subject matter of the contract. Loaiza, 130 S.W.3d at 905. Examining the surrounding circumstances and the subject matter of the contract, the License in Section 1.1 creates a latent ambiguity. Although only Garza's and Bernal's legal names were used in the text of the contract, the Employment Agreements concerned the employment of two radio personalities to perform their radio show entitled El Chulo y La Bola, [19] and the License concerned the promotion of KHHL and its programming, including the Show. Garza and Bernal have two sets of names  their legal names and their radio names  and their radio names were the names used to promote the Show. [20] Thus, when applying the word name in Section 1.1 to Garza and Bernal, it is uncertain whether name refers to Garza's and Bernal's legal or radio name, and a latent ambiguity exists. Because of this latent ambiguity and because SBS used Garza's and Bernal's radio names and likenesses while the License was in effect, the district court erred in determining that Amigo failed to produce sufficient evidence of breach of the License. See Dell Computer Corp., 390 F.3d at 388-89 & n. 25 (holding that where a latent ambiguity exists, interpretation of the contract becomes a question of fact).