Court Opinion

ID: 1028163
Source: CourtListenerOpinion
Date Created: 2013-07-05 07:36:06.858672+00
Date Added: 2024-06-11T09:18:33.747247
License: Public Domain

UNPUBLISHED

                   UNITED STATES COURT OF APPEALS
                       FOR THE FOURTH CIRCUIT

                              No. 08-1478

LINCOLN FINANCIAL MEDIA COMPANY,

                Plaintiff − Appellee,

           v.

CBS BROADCASTING, INCORPORATED, f/k/a CBS, Incorporated,

                Defendant − Appellant.

Appeal from the United States District Court for the Western
District of North Carolina, at Charlotte. Martin K. Reidinger,
District Judge. (3:07-cv-00062-MR-CH)

Argued:   January 28, 2009                    Decided:    March 10, 2009

Before WILLIAMS,    Chief    Judge,   and   MOTZ   and   SHEDD,   Circuit
Judges.

Affirmed by unpublished per curiam opinion.

ARGUED: G. Scott Humphrey, OGLETREE, DEAKINS, NASH, SMOAK &
STEWART, P.C., Charlotte, North Carolina, for Appellant. Daniel
R. Taylor, Jr., KILPATRICK & STOCKTON, L.L.P., Winston-Salem,
North Carolina, for Appellee.      ON BRIEF: Susan H. Boyles,
Bradley A. Roehrenbeck, KILPATRICK & STOCKTON, L.L.P., Winston-
Salem, North Carolina, for Appellee.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

       In 1996, CBS Broadcasting Incorporated (“CBS”) entered into

Affiliation         Agreements         with        Jefferson-Pilot           Communications

Company          (“Jefferson-Pilot”).                The      Affiliation        Agreements

provided         that   CBS    would      supply        network     television       to   two

Jefferson-Pilot stations.                 The parties also executed a Letter

Agreement in which CBS agreed to provide an annual promotional

payment of $400,000 to Jefferson-Pilot.                            In 2005, Jefferson-

Pilot’s parent corporation, Jefferson-Pilot Corporation, entered

into    a    merger     agreement       with       Lincoln        National    Corporation.

After    the      merger   was    approved         by   the    Federal       Communications

Commission (“FCC”), Jefferson-Pilot changed its name to Lincoln

Financial Media Company (“Lincoln Financial”).                               Following the

merger, CBS ceased making the $400,000 promotional payment, and

Lincoln     Financial         responded    by      filing     a    declaratory       judgment

action      in    the   United    States      District        Court    for     the   Western

District of North Carolina, alleging that the Letter Agreement

remained     binding       between     the     two      parties.       Following      cross-

motions for summary judgment, the district court granted Lincoln

Financial’s         motion,      concluding          that     the     Letter     Agreement

remained binding on CBS.               The district court accordingly issued

a declaratory judgment to that effect and ordered CBS to pay

$800,000 in past promotional payments plus prejudgment interest.

                                               2
CBS noted a timely appeal and, for the following reasons, we

affirm the well-reasoned opinion of the district court.

                                                 I.

     On    April        23,    1996,       CBS,       one    of    the     nation’s       largest

operators     of     radio          and    television          networks,         entered        into

Affiliation        Agreements             with    Jefferson-Pilot.                 Under        the

Affiliation        Agreements,            CBS     agreed          to     provide       television

programming       for    two    Jefferson-Pilot              stations,       WBTV,      operating

out of Charlotte, North Carolina, and WCSC-TV, operating out of

Charleston, South Carolina, for a period of fifteen years.                                       As

part of the Affiliation Agreements, CBS agreed to make monthly

payments     to     Jefferson-Pilot               and       Jefferson-Pilot            agreed    to

“notify CBS forthwith if any application is made to the Federal

Communications Commission relating to a transfer of control of

Broadcaster or the transfer of Broadcaster’s license for [the]

Affiliated    Station.”              (J.A.       at     94.)           Section   3(b)     of    the

Affiliation Agreements further provided that if CBS “reasonably

disapprove[d]”       of       the    transfer,        it    “shall       have    the    right    to

terminate” the Agreements.                 (J.A. at 94.)

     On that same date, CBS and Jefferson-Pilot entered into the

Letter Agreement which serves as the impetus for the current

litigation.       In relevant part, the Letter Agreement provides:

                                                  3
      CBS will make a promotional contribution to Jefferson-
      Pilot of . . . $400,000 in each of Years 2-15, to be
      allocated between WBTV and WCSC as directed by
      Jefferson-Pilot . . . CBS will include such amount in
      a lump sum payment allocated between the stations as
      directed by Jefferson-Pilot in the following month’s
      compensation checks, as separately itemized entries.
      This paragraph shall be of no further force and effect
      in the event that Jefferson-Pilot assigns or transfers
      any interest in either Station.

(J.A. at 209) (emphasis added).                      The Letter Agreement further

defines      “Jefferson-Pilot”           as     “Jefferson-Pilot             Communications

Company”.     (J.A. at 205.)

      Pursuant to this Letter Agreement, CBS made the $400,000

promotional        payment        from   1996       to    2002.         In    March        2002,

Jefferson-Pilot           created        a     new        wholly-owned          subsidiary,

Jefferson-Pilot Communications/WBTV, Inc., and notified CBS of

its   intention      to    transfer      the       broadcast     license      for    WBTV    in

Charlotte     as    well     as    the   Affiliation        Agreement         to    this    new

subsidiary.        CBS sent Jefferson-Pilot a letter dated April 10,

2002, noting that although “[c]onsent from CBS is not required

for   this    pro    forma        transfer,”        CBS    did    not    object       to    the

assignment.        (J.A. at 20)              The FCC approved Jefferson-Pilot’s

request to transfer the broadcast license on August 22, 2002,

and   Jefferson-Pilot             completed        this   business       transaction         on

January 1, 2003.           CBS thereafter continued to make the $400,000

promotional payment for the years 2003, 2004, and 2005.

                                               4
       In October 2005, Jefferson-Pilot Corporation entered into a

merger agreement with Lincoln National Corporation.                          Under the

planned         merger,   Jefferson-Pilot        Communications/WBTV,        Inc.   and

WCSC, Inc., retained the 100% ownership interests and broadcast

licenses for their respective stations.                      And, Jefferson-Pilot

retained         its   100%   stake     in       both   of   those    subsidiaries.

Jefferson-Pilot           Corporation        would      transfer     its     ownership

interest in Jefferson-Pilot to a holding company, “Merger Sub,”

which was later named Lincoln JP Holdings, LP.                     Lincoln National

Corporation held a 99.9% interest in Lincoln JP Holdings LP as a

limited partner; a wholly-owned subsidiary of Lincoln National

Corporation, Lincoln JP Company, LLC, held the remaining 0.1%

interest. 1

       On December 14, 2005, Jefferson-Pilot, pursuant to Section

3(b)       of    the   Affiliation      Agreements,       notified     CBS     of   the

contemplated merger.           In February 2006, CBS informed Jefferson-

Pilot Communications/WBTV, Inc. and WCSC, Inc., that CBS “has

not objected to the planned change in control and has no issues

with the merger proceeding as planned.”                  (J.A. at 25.)

       The merger closed on April 3, 2006, and Jefferson-Pilot

Corporation became Lincoln JP Holdings, LP and transferred its

       1
       Both Lincoln JP Holdings, LP and Lincoln JP Company, LLC,
were ultimately absorbed into Lincoln National Corporation in
March 2007.

                                             5
indirect control of the licenses for WBTV and WCSC to Lincoln

National.               Jefferson-Pilot        likewise            became         a   subsidiary       of

Lincoln       JP    Holdings,         LP,    but        continued           to    retain     its     100%

interest in the stations.                     Jefferson-Pilot Communications/WBTV,

Inc., and WCSC, Inc., retained their interests in the television

stations and continued operating them.                                 No change occurred with

respect       to    Jefferson-Pilot’s             business             location,        officers,      or

assets.            Jefferson-Pilot           did,       however,         change        its    name     to

Lincoln            Financial.                As          a        result,             Jefferson-Pilot

Communications/WBTV, Inc. likewise changed its name, settling on

WBTV, Inc.

       After Lincoln Financial requested the $400,000 promotional

payment    for          2006,   CBS    responded,            by    letter         dated     January    4,

2007, that it was refusing to make the payment.                                         According to

CBS,    the    merger          agreement      resulted            in    the      transfer     of     “any

interest” in the stations and permitted CBS, under the Letter

Agreement,          to     terminate        the     promotional               arrangement.            CBS

declined      to        make    the   $400,000          payment        in     2007     as    well,    and

Lincoln Financial responded by filing an action against CBS in

the    Western          District      of    North       Carolina        on       February     6,   2007,

requesting          a    declaratory        judgment          that      the       Letter     Agreement

                                                    6
remained   binding   and   damages   for    CBS’s   failure    to      make   the

$400,000 promotional payment in 2006 and 2007. 2

     The   parties   agreed    to    file   cross-motions        for    summary

judgment without discovery in July 2007.            On March 3, 2008, the

district   court   granted   summary     judgment   in   favor    of    Lincoln

Financial, concluding that the merger agreement did not result

in the transfer of any interest in either WBTV or WCSC and,

accordingly, that the Letter Agreement remained binding. 3                     The

district   court   also    awarded   Lincoln   Financial      $800,000        plus

prejudgment interest for the 2006 and 2007 promotional payments.

CBS filed a timely appeal, and we possess jurisdiction under 28

U.S.C.A. § 1291 (West 2006).

     2
       Jurisdiction was proper under 28 U.S.C.A. § 1332 (West
2006): CBS is a New York corporation with its principal place of
business in New York; Lincoln National Corporation is an Indiana
corporation   with   its   principal  place   of   business   in
Pennsylvania; and Lincoln Financial is a North Carolina
corporation with its principal place of business in North
Carolina. The amount in controversy exceeded $75,000.
     3
        The parties disputed which state’s law applied in
interpreting the Letter Agreement, with CBS asserting that New
York law applied and Lincoln Financial asserting North Carolina
law applied. The parties did agree, however, that there was “no
substantive difference” between New York and North Carolina law,
and the district court declined to resolve the choice of law
dispute. (J.A. at 600.)

                                     7
                                               II.

      We   review      de     novo    a   district         court’s   grant     of    summary

judgment.       Wilmington Shipping Co. v. New England Life Ins. Co.,

496   F.3d      326,    331    (4th       Cir.       2007).      Summary     judgment      is

appropriate      “if     the    pleadings,           the   discovery     and   disclosure

materials on file, and any affidavits show that there is no

genuine issue as to any material fact and that the movant is

entitled to judgment as a matter of law.”                               Fed. R. Civ. P.

56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322

(1986).

      The Letter Agreement provided, in relevant part, that CBS’s

obligation      to     make    the    promotional          payment   “shall     be    of   no

further    force       and    effect      in     the    event    that    Jefferson-Pilot

assigns    or    transfers       any      interest         in   either   Station.”         In

concluding that the Letter Agreement remained binding upon CBS,

the district court summarized the case as follows:

      Boiled   to   their   essence,  the  facts    are   that
      [Jefferson-Pilot] was once a subsidiary of [Jefferson-
      Pilot     Corporation].        When    [Jefferson-Pilot
      Corporation]   was   purchased  by  Lincoln    National,
      [Jefferson-Pilot] became a subsidiary of Lincoln
      National. [Jefferson-Pilot’s] name was then changed .
      . . to Lincoln Financial. As a result of the merger,
      [Jefferson-Pilot Corporation] transferred everything
      it   owned.      [Jefferson-Pilot],  however,    neither
      transferred nor assigned anything as a result of the
      merger; it simply changed its name.

(J.A. at 606.)

                                                 8
        Thus, the district court correctly found that “[Jefferson-

Pilot] did not assign or transfer any of its interests in [WCSC

or WBTV] as a result of the merger.”                (J.A. at 607.)

        Perhaps recognizing that this argument is foreclosed by the

factual record, CBS alternatively contends that the change in

ownership of Jefferson-Pilot terminated the Letter Agreement’s

promotional payment.        CBS is correct that the merger changed

Jefferson-Pilot’s      parent    from     Jefferson-Pilot         Corporation       to

Lincoln National Corporation.                 But the plain language of the

Letter    Agreement   provides     that       the   promotional    payments     only

terminate if Jefferson-Pilot itself (not its corporate parent)

“assigns or transfer any interest in either station.”                   (J.A. at

209.)     CBS could have written the contract more broadly, but it

did not.        Because the contractual language is unambiguous, we

cannot accept CBS’s invitation to consider extrinsic evidence of

the parties’ intent.        Greenfield v. Philles Records, Inc., 780

N.E.2d 166, 170-71 (N.Y. 2002); Walton v. City of Raleigh, 467

S.E.2d 410, 411 (N.C. 1996).            But even if we were to do so, we

find    CBS’s   “common   sense”   argument         unconvincing.     CBS     had    a

longstanding      relationship     with       Jefferson-Pilot—not      Jefferson-

Pilot Corporation and CBS designed the promotional payments to

maintain this partnership.           That relationship did survive the

merger.

                                          9
     Accordingly, we conclude that the district court correctly

granted Lincoln Financial’s motion for summary judgment.

                                                           AFFIRMED

                               10