Court Opinion

ID: 2778164
Source: CourtListenerOpinion
Date Created: 2015-02-10 17:01:10.01406+00
Date Added: 2024-06-11T10:53:42.386018
License: Public Domain

FILED
                                                  United States Court of Appeals
                     UNITED STATES COURT OF APPEALS       Tenth Circuit

                           FOR THE TENTH CIRCUIT                      February 10, 2015

                                                                     Elisabeth A. Shumaker
                                                                         Clerk of Court
GENERAL CHARLES E. “CHUCK”
YEAGER, (Retired), an individual,

             Plaintiff - Appellant,
                                                          No. 14-4011
and                                               (D.C. No. 2:11-CV-00091-TS)
                                                            (D. Utah)
PMN II, a Delaware limited liability
company,

             Plaintiff,

v.

FORT KNOX SECURITY PRODUCTS,
a Utah corporation,

             Defendant - Appellee.

                            ORDER AND JUDGMENT*

Before HARTZ, McKAY, and McHUGH, Circuit Judges.

*
      After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of this
appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and collateral
estoppel. It may be cited, however, for its persuasive value consistent with
Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
      General Charles E. Yeager brought this action against Fort Knox Security

Products (“Fort Knox”) asserting various claims under Utah law as well as the

Lanham Act to redress the alleged misuse of his name and likeness in connection

with the sale of Fort Knox products. The district court granted summary judgment

for Fort Knox based on the doctrine of laches, and General Yeager has appealed. On

de novo review, see Jacobsen v. Deseret Book Co., 287 F.3d 936, 948 (10th Cir.

2002), we affirm in part, reverse in part, and remand for the reasons stated below.

          I. BASIC FACTUAL AND PROCEDURAL BACKGROUND

      Fort Knox manufactures and sells gun safes and other security products. In the

mid-1980s, General Yeager and Thomas James, who founded Fort Knox, met at a

Safari Club International (“SCI”) Convention and entered into an oral agreement

allowing the use of General Yeager’s name and likeness to promote Fort Knox

products in return for free safes for General Yeager and members of his family. The

substance of that agreement is now disputed in certain respects, but the parties agree

that it could be terminated by General Yeager at any time.

      Fort Knox began producing advertising materials on the basis of the

agreement. It even called a product line the “Yeager safes,” an arrangement it asserts

General Yeager also agreed to orally. In the later 1980s, Fort Knox also started

purchasing copies of a book written by General Yeager, for him to sign and return to

Fort Knox for use in promoting its safes. In 1989, General Yeager toured the Fort

Knox facility, staying at the home of Mr. James. For many years, General Yeager

                                         -2-
did not voice any concerns over how Fort Knox was effectuating their oral

agreement.

       In 2008 or early 2009, however, General Yeager’s current wife, Victoria

Yeager, who manages his proprietary rights and commercial endorsements, began

inquiring about the agreement between Fort Knox and her husband. Fort Knox

asserts that these inquiries led it to be concerned about the potential for difficulties

arising over the continuing use of General Yeager’s name and likeness, which it

ceased with one exception. That exception was the display of a poster of General

Yeager at a SCI Convention in January 2009, attended by General Yeager. This

action was commenced two years later.

       General Yeager’s claims are rooted in two basic allegations: (1) Fort Knox

exceeded the terms of the oral agreement, which limited use of his name and likeness

to the annual SCI convention, thereby unjustly enriching Fort Knox and depreciating

the value of his proprietary rights; and (2) Fort Knox continued to use his name and

likeness despite outright termination of the agreement sometime in 2008. Fort Knox

moved for summary judgment on the bases of the statute of limitations and laches.

The district court chose not to rely on the limitations defense but did agree with Fort

Knox that the action was barred by laches.

                           II. DISTRICT COURT ORDER

       The district court identified and analyzed the two basic elements of laches

under Utah law: the plaintiff’s lack of diligence and prejudice to the defendant from

                                           -3-
the resultant delay.1 See Fundamentalist Church of Jesus Christ of Latter-Day Saints

v. Horne, 289 P.3d 502, 510 (Utah 2012). General Yeager emphasizes the losses he

claims to have suffered as a result of Fort Knox’s alleged invasion of his legal rights,

but as the district court explained, consideration of harm to the dilatory plaintiff—in

particular harm based on the asserted merit of his belated claims—“is not merely

unnecessary; it is forbidden.” Id.; see also id. at 512 (explaining that a different rule,

“one where a court’s recognition of meritorious claims could defeat a laches

defense[,] would be antithetical to the whole point of the doctrine of laches”).

      As to diligence, the district court held that General Yeager should have known

from the promotional arrangement regarding the use of his autographed books, which

began in 1987, that Fort Knox’s implementation of their oral agreement had clearly

gone beyond the limited rights to which he now alleges the agreement was restricted.

While Fort Knox points to additional incidents that it insists would have contributed

to putting General Yeager on notice of its broader understanding and implementation

of the agreement, the district court focused on the book-signing arrangement, noting

that “once Yeager began autographing a large number of books for Defendant, it

1
       The parties have not challenged the district court’s application of Utah law to
this case, nor have they indicated that federal law (for the Lanham Act claim) would
be different in any material respect. Indeed, the same elements of diligence and
prejudice drive the laches inquiry under federal law. See F.D.I.C. v. Hulsey, 22 F.3d
1472, 1491 (10th Cir. 1994). Under the circumstances, we likewise apply Utah law.
See, e.g., Mullin v. Travelers Indem. Co. of Conn., 541 F.3d 1219, 1222 (10th Cir.
2008); MidAmerica Fed. Sav. & Loan Ass’n v. Shearson/American Express Inc.,
962 F.2d 1470, 1475 n.7 (10th Cir. 1992).

                                           -4-
would have become clear to Yeager that his relationship with Defendant had moved

beyond Plaintiffs’ claimed understanding of the original agreement.” R. Vol. 8 at

337. The court went on to elaborate:

               Even if the Court accepts Plaintiffs’ position that Yeager’s
       relationship with Defendant was originally confined to Defendant’s
       advertising at the SCI Convention, that relationship had fundamentally
       changed once Yeager signed a significant number of books for
       Defendant to use as a way of boosting sales. Yeager began signing
       books for Defendant twenty-four years before the Complaint was filed
       in this case. Morever, even if Yeager was [subjectively] unaware of his
       rights until [as he claims] September 2007, he exercised no diligence to
       inquire with Defendant once he was on notice that Defendant was
       operating under a belief that the parties’ relationship was more
       expansive than Plaintiffs assert in this suit. At that point in the parties’
       relationship, Yeager was in frequent contact [with] Defendant through
       his shipments of signed books and Yeager was in a position to inquire
       quite easily about the nature of his relationship with Defendant.
       Therefore, the Court finds that Plaintiffs lacked diligence in inquiring
       into the nature of the parties’ relationship and the terms of their
       agreement, and in bringing the claims in this suit.

Id. at 337-38.

       As to prejudice, the district court cited authority establishing that

“[u]navailable or long-lost evidence and witnesses are long recognized as

prejudice-causing results of delay,” id. at 339 (brackets and internal quotation

marks omitted), and that “laches is appropriate where a plaintiff’s delay is so

substantial that the transaction has faded from memory,” id. (internal quotation

marks omitted). The court went on to identify just such prejudice evident in

this case:

       First, it is undisputed that Yeager’s first wife, Glennis, took care of his
       business interests during the 1980s and passed away in 1990. Glennis

                                           -5-
      would have been a critical witness to the key events at issue in this case.
      Similarly, employees who worked for Defendant during the relevant
      period are no longer with the company and may be difficult to locate.
      Second, the initial oral agreement took place nearly a quarter century
      ago and the two men who made the agreement are now both in their
      eighties. After more than two decades, the parties’ memories of their
      transaction have faded. Consequently, the Court finds that Plaintiffs’
      decades-long delay in bringing this suit has allowed memories to dim
      and prejudiced Defendant’s ability to defend against the claims.

Id. at 339-40.

      The district court also addressed General Yeager’s contention that the

“unclean hands” doctrine precluded Fort Knox’s reliance on laches. It began

by citing authority explaining that the doctrine “expresses the principle that a

party who comes into equity for relief must show that his conduct has been

fair, equitable, and honest as to the particular controversy in issue.” Id. at 334

(brackets, ellipses, and internal quotation marks omitted). That is, “[e]quity

does not reward one who has engaged in fraud or deceit in the business under

consideration, but reserves its rewards for . . . those who have come into court

with clean hands.” Id. (internal quotation marks omitted). The court then

explained why this doctrine had no application here:

              The Court cannot find that Defendant acted deceitfully in its
      dealing with Plaintiffs. Rather, the evidence before the Court indicates
      that Defendant branded and marketed its products using Yeager’s name
      or likeness based on its understanding that this was acceptable to
      Yeager. Plaintiff has not demonstrated that Defendant undertook any
      effort to hide the extent to which Yeager’s name and image were used to
      brand and market Defendant’s products. To the contrary, when Yeager
      visited Utah in 1989, Defendant provided Yeager with a tour of its
      facilities and arranged for a professional photographer to photograph
      Yeager posing before one of Defendant’s safes. . . . [W]hether or not

                                          -6-
         Defendant in fact breached its agreement with Yeager, Defendant did
         not act deceitfully or fraudulently in doing so. Therefore, the unclean
         hands doctrine does not bar Defendant from asserting laches.

    Id. at 334-35.

         Based on the foregoing analysis, the district court held that General

Yeager’s action was barred by laches and dismissed it accordingly.

                            III. ISSUES ON APPEAL

         General Yeager’s pro se briefing purports to raise fourteen issues on

appeal. Many of these do not relate to the district court’s dispositive laches

determination and are immaterial to our review. Such issues include factual

and legal arguments regarding General Yeager’s claims on the merits, which

the district court did not reach, and Fort Knox’s statute of limitations defense,

upon which the district court did not rely.2 There is also a great deal of

redundancy with respect to the issues that are properly directed at the

correctness of the laches determination. We collect and distill these scattered

contentions into the several distinct issues addressed below.

A. Material Fact Disputes

         General Yeager begins his appellate argument with the general

objection that the district court failed to properly account for material fact

disputes. In most instances, the asserted disputes are not in fact material to the

2
       As explained later, there is one narrow respect in which the limitations period
is relevant to the laches defense, and we consider it for that purpose.

                                            -7-
district court’s dispositive ruling on laches, and we explain that immateriality

in the sections below where the points arise in connection with particular

objections raised on appeal.

      There is, however, one factual point emphasized by General Yeager

here and throughout his briefing that (1) is clearly material to the laches issue,

(2) was deemed undisputed in his favor, and yet (3) was left unaccounted for

in the district court’s analysis. This point concerns the termination of the oral

agreement in 2008 or 2009—after which any claim regarding the unauthorized

use of his name or likeness would turn not on decades-old events involving

formation and implementation of the agreement, but on distinct events

occurring very recently in relation to the filing of this action. Indeed, this

point leads us to partially reverse the grant of summary judgment, as explained

in the relevant portion of section E below.

B. Elements of Laches

      General Yeager challenges the district court’s ruling as to both the

diligence and prejudice prongs of the laches defense. With regard to diligence,

he repeatedly insists there was no evidence that he actually knew Fort Knox

was acting in a manner contrary to his understanding of their agreement. This

argument stems from an erroneous legal premise. Laches does not require

actual knowledge on the part of the dilatory party. Rather, “[l]imitations and

laches begin to run from the time [the party] knew or by reasonable inquiry

                                           -8-
might have known the relevant facts.” Ruthrauff v. Silver King W. Min. & Mill

Co., 80 P.2d 338, 346 (Utah 1938) (emphasis added); see also Bingham

Consolidation Co. v. Groesbeck, 105 P.3d 365, 373 (Utah App. 2004) (framing

laches inquiry in terms of whether party “knew or should have known”

operative facts). We agree with the district court that, whether or not General

Yeager actually knew the extent to which Fort Knox was making use of his

name and likeness beyond his asserted understanding of their agreement, he

knew enough about its promotional activities, particularly relating to the

extensive use of his autographed books to sell safes, to put him on notice to

inquire into the matter decades before this suit was filed.

      General Yeager also criticizes the district court’s conclusion regarding

evidentiary prejudice to Fort Knox as a result of his extended delay in filing.

He contends that the only essential witnesses are the parties to the original oral

agreement (he and Thomas James) and that, despite the intervening decades,

they were able to offer their conflicting memories of the agreement. While

they did offer their different views of the agreement, faded memories have also

been evident. As just one telling example, Fort Knox points to General

Yeager’s inability to remember an incident when he posed for a photograph in

front of one of Fort Knox’s Yeager safes. Obviously this incident could have

lent significant support to Fort Knox’s position that General Yeager had

agreed to promotional activities beyond simply using his name and likeness at

                                          -9-
the yearly SCI convention. In addition, evidence from other contemporary

witnesses about communications and course-of-dealing between Fort Knox

and General Yeager, particularly from General Yeager’s first wife3 and Fort

Knox staff in the 1980s and 1990s, could also be important. Such practical

considerations are “long recognized as prejudice-causing results of delay,”

Horne, 289 P.3d at 512, and their import is not undercut by General Yeager’s

conclusory judgment that such prejudice is “a stretch,” Aplt. Opening Br. at

13.

C. Unclean Hands

      The district court properly rejected General Yeager’s argument that Fort

Knox did not have the “clean hands” required for assertion of a laches defense.

Basically, General Yeager invoked his claims that Fort Knox had exceeded its

rights under their agreement and then cited this “misconduct” as the reason

Fort Knox had unclean hands. This argument misconceives the nature of the

clean-hands requirement and interjects a categorically inappropriate

consideration into the laches analysis. As the district court noted, the

clean-hands inquiry looks for fraudulent and deceitful conduct, and General

3
       General Yeager notes that his wife was not present when the oral agreement
was made and objects that it was therefore improper for the district court to consider
her a material witness—an objection he characterizes as a factual dispute. Given her
marital relationship with General Yeager and her role in overseeing his business
affairs in the 1980s, we see nothing improper in the district court’s assessment of her
potential importance as a witness.

                                         - 10 -
Yeager’s claims against Fort Knox, even if assumed to be meritorious, are not

based on fraud.4 In essence, General Yeager’s assertion of unclean hands was

just an effort to interject his arguments regarding the merits of his claims into

the laches analysis. As noted earlier, this “is forbidden,” because looking to

the merits of belated claims to defeat a laches defense “would be antithetical to

the whole point of the doctrine of laches.” Horne, 289 P.3d at 510, 512.

      On appeal, General Yeager raises allegations of concealment by Fort

Knox. In his opening brief, he contends that Fort Knox’s refusal of his wife’s

request for an accounting in 2007 shows it was hiding information about its

profitable use of his name and likeness. Leaving aside questions regarding

preservation of this contention,5 it does not show concealment. General

Yeager does not point to evidence suggesting Fort Knox had some obligation

to do an accounting upon his request, and he cites no authority for the facially

dubious notion that a company must voluntarily perform such an undertaking

or be charged with hands equitably soiled by “concealment.” In any event,

4
        On appeal General Yeager alludes to a misrepresentation by Fort Knox about
profits going to religious charity, made to induce his acceptance of the agreement. If
this is meant as a fraud claim, it was not alleged in General Yeager’s pleadings nor
raised in his unclean-hands argument in opposition to summary judgment. We
therefore do not consider it further here.
5
      General Yeager specifically sought such an accounting in his complaint,
though he did not mention it in his unclean-hands argument in opposition to summary
judgment.

                                          - 11 -
this allegation of concealment in 2007 is hardly material to a defense of laches

arising from legal inaction beginning decades earlier.

      In the same vein, General Yeager notes that Fort Knox did not send him

its marketing materials over the years, and he insists that this creates a fact

dispute regarding concealment. Again, he cites no evidence to indicate Fort

Knox obligated itself to send him its marketing materials (or that he asked for

such materials), nor does he cite authority holding the failure to voluntarily

undertake such action constitutes concealment.

      In his reply brief, General Yeager introduces additional allegations of

concealment. Fort Knox has moved to strike his reply brief due to the belated

nature of such contentions. We see no reason to strike the brief in its entirety,

but we do agree with Fort Knox that these new matters raised for the first time

therein are not properly before us. See United States v. Watson, 766 F.3d
1219, 1230 n.8 (10th Cir.), cert. denied, 135 S. Ct. 735 (2014).

D. Events within Four-Year Statute of Limitations Period

      General Yeager notes that at least two relevant events indisputably

occurred within the four-year look-back period preceding the filing of this

action in January 2011: (1) Fort Knox uploaded a promotional video to the

internet that referred to the Yeager line of safes; and (2) Fort Knox displayed

his name and likeness at the 2009 SCI convention. He contends that any bases

for applying laches to the rest of his case do not apply to these events. In this

                                          - 12 -
regard, he notes in his reply brief that the Supreme Court recently held in a

copyright case that claims arising within the limitations period cannot be

barred by a laches defense. See Petrella v. Metro-Goldwyn-Mayer, Inc.,

134 S. Ct. 1962, 1967 (2014). He contends Petrella is particularly relevant to

his federal Lanham Act claim.6

      By its own terms Petrella’s holding does not apply to the Lanham Act

claim in this case. Petrella sharply distinguished between the proper use of

laches to bar claims for which Congress has provided no fixed time limitation,

where the doctrine performs a gap-filling function, and its improper use to bar

claims timely raised within a limitations period Congress has specified (as in

the Copyright Act). See id. at 1973-75. As Petrella itself pointed out, “[i]n

contrast to the Copyright Act, the Lanham Act . . . contains no statute of

limitations, and expressly provides for defensive use of . . . laches.” Id. at

1974 n.15 (internal quotation marks omitted). Thus, we must look to other

authority to guide our analysis of laches here.

      In dealing with Lanham Act claims courts have looked to analogous

state limitation provisions and invoked presumptions in favor of (or against)

laches defenses to claims brought outside (or inside) the analogous limitations
6
       Again, Fort Knox has moved to strike the reply brief on the ground that it
raises new matters not included in General Yeager’s opening brief. In this instance,
we disagree. Petrella is relevant to arguments made in his opening brief and we see
no injustice in his bringing this previously overlooked authority to our attention. In
any event, the case does not control our disposition, as explained above.

                                          - 13 -
period. See, e.g., Herb Reed Enters., LLC v. Florida Entm’t Mgmt., Inc.,

736 F.3d 1239, 1246-47 (9th Cir. 2013), cert. denied, 135 S. Ct. 57 (2014);

PBM Prods., LLC v. Mead Johnson & Co., 639 F.3d 111, 121 (4th Cir. 2011);

see also Maloney-Crawford Tank Corp. v. Rocky Mt. Natural Gas Co.,

494 F.2d 401, 404 (10th Cir. 1974) (noting presumptions favoring/disfavoring

laches by reference to analogous state limitations period in patent infringement

case). This authority favors General Yeager with respect to the two claims

noted above.

      As a countervailing principle, Fort Knox invokes the “single publication

rule,” under which relief for tort claims (like defamation) premised on mass

communications is unavailable for later re-publications if a claim with respect

to an initial publication would be stale. See, e.g., Yeager v. Bowlin, 693 F.3d
1076, 1081 (9th Cir. 2012). In this regard, the parties spar over such unsettled

legal issues as whether this rule is available in Lanham Act cases and whether

the Utah courts would recognize it for the type of state torts alleged here.

They also contest whether, if otherwise available, the rule is properly applied

to the particular claims noted above.

      Although these matters were discussed in the parties’ summary

judgment materials, the district court did not address any of these questions.

We think it appropriate to reverse the grant of summary judgment with respect

to the two claims noted above and allow the district court to address these

                                         - 14 -
unresolved laches issues in the first instance. We note that Fort Knox is free to

challenge these claims on the basis of any other defenses it has preserved.7

E. Unauthorized Use after Termination of Agreement

       Application of laches is doubly problematic with respect to General

Yeager’s claim for unauthorized promotional activities following termination

of his agreement with Fort Knox (as in its alleged use of his name and likeness

at the 2009 SCI convention). That claim not only falls squarely within the

limitations period, but it is not tied to any stale disputes over the nature of the

1980s agreement. It depends solely on recent events—termination of the

agreement and subsequent use of General Yeager’s name and likeness—for

which witnesses are available and memories are not dim. For much the same

reason, invocation of the single-publication rule in this regard would be inapt;

the alleged wrongful conduct in 2009—acting in the complete absence of

contractual authorization—is not a continuation or repetition of the earlier

alleged wrongful conduct—acting in excess of authorization given by the

1980s agreement—to which laches applies.

       Despite explicitly characterizing the critical fact of termination of the

agreement as “undisputed,” R. Vol. 8 at 336, the district court did not explain
7
       We note that Fort Knox has argued in its appellate briefing for affirmance on
statute of limitations grounds in the event its laches defense is deemed problematic.
With respect to the two facially timely claims discussed here, however, an affirmance
on such grounds would only be possible if its position on the single-publication rule
were definitively adopted, which just brings us back to the reasons for remand.

                                          - 15 -
how a claim premised on that recent fact could possibly be barred by laches.

On appeal, Fort Knox contends there is no evidence, or at least no evidence

cited by General Yeager, showing that the agreement was terminated as he has

alleged. But Fort Knox did not challenge that allegation in its motion for

summary judgment, so it would be unfair to hold any evidentiary deficiency in

this regard against General Yeager. See Evers v. Regents of Univ. of Colo.,

509 F.3d 1304, 1309-10 (10th Cir. 2007). That unfairness is only amplified by

the fact that the district court took the lack of factual challenge by Fort Knox

on this point to mean termination of the agreement was actually undisputed.

F. Fed. R. Civ. P. 56(d) Objection

      Finally, General Yeager contends the district court should have delayed

ruling on summary judgment, under Rule 56(d), until he obtained additional

discovery he was pursuing through several third-party subpoenas. But the

magistrate judge quashed the subpoenas in question, and then denied General

Yeager’s subsequent motion to reopen discovery for the same purpose, months

before the district court ruled on summary judgment, and General Yeager

never sought review of the magistrate judge’s rulings. Thus, when the district

court decided summary judgment, the specific discovery underlying General

Yeager’s invocation of Rule 56(d) was no longer pending. Under the

circumstances, the district court did not err in proceeding to rule on summary

judgment.

                                         - 16 -
                                 IV. CONCLUSION

      We affirm the district court’s grant of summary judge to Fort Knox with

respect to General Yeager’s stale claims (falling outside the four-year limitations

period) for use of his name and likeness contrary to the limited authority granted

under their 1980s agreement. As for his claims relating to conduct within the

limitations period, and particularly relating to the use of his name and likeness

following termination of the original agreement, we reverse and remand for further

proceedings consistent with the analysis herein.

      The judgment of the district court is affirmed in part, reversed in part, and

remanded as explained above. Appellant’s motion to file a reply brief out of time is

granted. Because our consideration of the reply brief has not affected the outcome of

this appeal, as a practical matter appellee’s motion to strike is moot and we deny it.

                                                  Entered for the Court

                                                  Monroe G. McKay
                                                  Circuit Judge

                                         - 17 -