Court Opinion

ID: 182467
Source: CourtListenerOpinion
Date Created: 2011-01-07 20:28:58+00
Date Added: 2024-06-11T17:25:59.667875
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                            No. 10-1480

LEDO PIZZA SYSTEM, INCORPORATED; LEDO PIZZA CARRYOUTS,
LTD.; ROBERT M. BEALL; MARGARET K. BEALL; ROBERT G. BEALL;
TROY L. BEALL; JAMES B. BEALL; GARTH E. BEALL; ROBERT W.
BEALL; THELMA W. BEALL; MILDRED BEALL; THELMA B. BEALL,

                Plaintiffs – Appellants,

          v.

LEDO RESTAURANT, INCORPORATED; HUNTINGTON CITY RESTAURANT,
INCORPORATED, trading as T.J. Elliott’s; HUNTINGTON CITY
ENTERPRISES LLC, trading as Expressions Catering; THOMAS E.
MARCOS, JR.; THOMAS E. MARCOS, SR.; JAMES L. MARCOS; EILEEN
J. MARCOS,

                Defendants – Appellees.

Appeal from the United States District Court for the District of
Maryland, at Baltimore.    Deborah K. Chasanow, Chief District
Judge. (1:06-cv-03177-DKC)

Submitted:   November 24, 2010             Decided:   January 7, 2011

Before KING, KEENAN, and WYNN, Circuit Judges.

Affirmed in part, vacated in part, and remanded by unpublished
per curiam opinion.

Brent M. Ahalt, MCNAMEE, HOSEA, JERNIGAN, KIM, GREENAN & LYNCH,
P.A., Greenbelt, Maryland, for Appellants.     Cary J. Hansel,
Veronica   Byam  Nannis,   JOSEPH,  GREENWALD   &   LAAKE,   P.A.,
Greenbelt, Maryland, for Appellees.

Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:

            Ledo Pizza System, Inc., Ledo Pizza Carryouts, Ltd.,

Robert      M.        Beall,        Margaret       K.       Beall,      Robert G. Beall,

Troy L. Beall, James B. Beall, Garth E. Beall, Robert W. Beall,

Thelma     W.    Beall,        Mildred      Beall,      and     Thelma B. Beall         (“the

Bealls” or “the Appellants”), filed this lawsuit against Ledo

Restaurant,       Inc.,        Huntington        City    Restaurant,        Inc.,       d/b/a

T.J. Elliott’s             Restaurant,      Huntington        City     Enterprises      LLC,

d/b/a    Expressions          Catering,     Thomas      E.    Marcos     Jr.,    Thomas   E.

Marcos,    Sr.,       and     James    L.   Marcos      (“the    Marcoses”),       alleging

breach      of        contract,         trademark        violations,        and        unfair

competition.           The district court found two minor instances of

breach of contract and awarded the Bealls two dollars in nominal

damages.        The court found for the Marcoses on all other claims.

The Bealls noted a timely appeal.

            The        Bealls       first    challenge         the     district     court’s

interpretation         of     the   license      agreement      on    summary     judgment.

They argue that, under the terms of the agreement, the Marcoses

are   limited         to    advertising      within     the     four     walls    of    their

restaurants.           The     Bealls    point     to   the     Marcoses’    websites     in

particular       as    being    violative        of   the     license    agreement.       We

disagree.

            We        review    a     district     court      order     granting    summary

judgment de novo, viewing the facts and inferences drawn from

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them   in   the    light       most   favorable    to    the    nonmoving    party.

Robinson v. Clipse, 602 F.3d 605, 607 (4th Cir. 2010).                      Contract

construction is also a question of law that this court reviews

de novo.      Seabulk Offshore, Ltd. v. American Home Assur. Co.,

377 F.3d    408,    418    (4th Cir. 2004).            “[S]ummary     judgment   is

appropriate when the contract in question is unambiguous or when

an   ambiguity     can    be    definitively      resolved      by   reference   to

extrinsic evidence.”            Washington Metro. Area Transit Auth. v.

Potomac Inv. Prop., Inc., 476 F.3d 231, 235 (4th Cir. 2007).

            By their own terms, the agreements here are governed

by Maryland law.           We have recognized that “Maryland follows

‘the principle of the objective interpretation of contracts.’”

Potomac Inv. Prop., 476 F.3d at 235 (quoting Walker v. Dep’t of

Human Res., 842 A.2d 53, 61 (Md. 2004)).                  “Under the objective

theory of contracts [courts] look at what a reasonable person in

the same position would have understood as the meaning of the

agreement.”        Walton v. Mariner Health of Md., Inc., 894 A.2d

584, 594 (Md. 2006).

            The     relevant      provisions      of    the    license   agreement

provide that the Marcoses “shall not make use in any way of any

of the Marks, Recipes, or the ‘Ledo Pizza’ pizza [sic] in any

manner” except as specified.           The Marcoses are permitted to

       sell at retail from the Adelphi Location or from the
       Bowie Area Locations salad dressing, tomato sauce or
       any other finished retail food products under the

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      names “Ledo Restaurant” or “Original Ledo Restaurant”,
      provided that the term “Restaurant” in any logos,
      labelling, advertising or marketing materials . . .
      shall be featured at least as prominently and styled
      (if at all) in the same manner as the term “Ledo.”

The   license        agreement     also      permits     the    Marcoses        to    use

derivatives of the names “Ledo Restaurant” and “Original Ledo

Restaurant”         “in    connection       with   the    operation”       of        their

restaurants.

               We agree with the district court that the agreements

in question did not restrict the Marcoses to advertising within

the   four     walls      of   their   restaurants.       The    language       of    the

license agreement focuses on two issues:                 first, restricting the

Marcoses to selling products under the Ledo mark only at the

Adelphi and Bowie locations; and second, ensuring that the mark

is presented or “styled” in a particular way.                        The relevant

language does not support the Bealls’ attempt to enlarge the

geographic restrictions to encompass advertising. *

               Next, the Bealls argue that the district court erred

when it granted summary judgment as to Thomas Marcos, Sr., and

dismissed him from the case.                 They argue that Marcos, Sr. is

liable    as    a   “co-promisor”      on    the   agreements,    and   because         he

      *
       Because we agree with the district court’s conclusion that
the Marcoses’ advertising activities did not breach the
agreements, we decline to consider whether the Bealls’ claim is
barred by laches.

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expressly agreed to be held jointly and severally liable, citing

Traylor v. Grafton, 332 A.2d 651, 672 (Md. 1975).                                 (“When two or

more promisors agree to pay a sum of money under a contract the

amount    promised       is    the    promise          of    all     and    the    promisee   is

entitled to a joint judgment against them, or judgments against

them severally.”).             The Bealls also point to language in the

agreements that states that the “Marcoses jointly and severally

agree     to    indemnify       the       Bealls.”            Having       considered     these

arguments,       we     find   them       to    lack        merit,    and     we    affirm    the

district court on this issue as well.

               The Bealls next contend that the district court erred

in failing to find the Marcoses in breach of contract for the

actions    of        Expressions;      in      so     arguing      the     Bealls     point   to

articles 5.1(c) and 5.2(b) of the settlement agreement.                                 Because

this issue was decided after a bench trial, we review factual

findings       for    clear    error      and       “conclusions         of   law,    including

contract construction,” de novo.                         Roanoke Cement Co. v. Falk

Corp., 413 F.3d 431, 433 (4th Cir. 2005).

               Article 5.2 of the settlement agreement outlines the

restrictions         applicable      to     the       Marcoses’      business       activities.

Section (b) provides that

     none of the         Marcoses, Ledo Restaurant nor any of their
     successors          or assigns shall open or participate
     directly or          indirectly in any carryout or restaurant
     facility at          any location whatsoever utilizing in any

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       way the name “Ledo” or any derivative or expansion
       thereof or the Ledo Pizza recipe.

Article      5.2(a)     and   article    5.1(c)    limit   the     effect    of    this

restriction, permitting the Marcoses to use Ledo intellectual

property in connection with Ledo Restaurant and “one or more

restaurants, carryouts and/or any retail store” in the Bowie

area.       The trademark agreement permits use of the Ledo mark “for

direct retail sale . . . to the general public for sit-down or

carry-out restaurant sales” sold at Ledo Restaurant or at any

restaurant located in the Bowie area.

               There is no dispute that Expressions was not permitted

to use Ledo intellectual property.                 Together, the Marcoses own

sixty percent of Expressions and, with this ownership interest,

they have, at least indirectly, participated in a business using

the     Ledo     mark     without       authorization.            Moreover,       while

Expressions originally operated out of T.J. Elliott’s in Bowie,

it later moved to Owings, Maryland.                   Even if Expressions had

remained at the Bowie location, its catering operations would

violate the agreements whenever it used the Ledo mark, because

the products would not have been sold at a retail store for

“sit-down or carry-out.”            Accordingly, we find that Expressions’

use of the Ledo mark constituted a violation of the agreements

by    the    Marcoses.        Therefore,   we     vacate   this    portion    of    the

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district court’s decision and remand it to allow the district

court to consider damages on this claim.

               Finally, we address the Bealls’ contention that the

district       court       erred   in   concluding          that          communications            with

Garth    Beall       were    not    protected       by     attorney-client                 privilege.

“We review attorney-client privilege determinations by district

courts    under        a    two-fold       standard        of    review.”                Hawkins      v.

Stables, 148 F.3d 379, 382 (4th Cir. 1998).                                   When the district

court’s decision rests on legal principles, it is reviewed de

novo,    but    when        “the   district       court’s        ruling            below      rests   on

findings       of      fact,       we      review     for        clear             error.”            Id.

Additionally,          “[e]videntiary         rulings        are          .    .    .    subject      to

harmless error analysis.”                  United States v. Roe, 606 F.3d 180,

185    (4th Cir. 2010),            cert.     denied,       ___       S.       Ct.    ___,      2010    WL

4115418 (U.S. Nov. 15, 2010) (No. 10-7014).                                   Because the Bealls

have    given    no        indication      that     they    were          prejudiced           by   that

ruling, they are entitled to no relief on this claim.

               For    the     foregoing       reasons,          we    affirm            the   district

court    in     part,        vacate     in     part,        and       remand            for    further

proceedings consistent with this opinion.                            We dispense with oral

argument because the facts and legal contentions are adequately

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presented in the materials before the court and argument would

not aid the decisional process.

                                             AFFIRMED IN PART,
                                              VACATED IN PART,
                                                  AND REMANDED

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