BARNES, Judge.
Alan R. Brill, Business Management Consultants, LP, f/k/a Brill Media Company, LP, and the Non-Debtor Companies (collectively "Brill") appeal the trial court's order granting summary judgment in favor of Regent Communications, Inc., n/k/a Townsquare Media, Inc., ("Regent") in an action for breach of contract and fraud. Regent cross-appeals, claiming that the trial court erred in denying its motion to dismiss Brill's second amended complaint as untimely under Virginia's statute of limitations.
The dispositive issue we address is whether the trial court properly denied Regent's motion to dismiss Brill's complaint.
Brill was the owner of radio stations and newspapers in medium markets such as Evansville. In 2000, Brill sought to sell the radio stations and began negotiating with Regent, a publicly-held company that owned and operated radio stations throughout the country. At that time, the parties understood that Regent was interested in purchasing all of Brill's radio stations. During the course of the negotiations, Brill submitted financial and other confidential information to Regent. On June 16, 2000, Brill drafted a confidentiality agreement ("2000 Agreement"), pursuant to which Regent agreed in pertinent part:
Appellants' App. pp. 1443-44. The 2000 Agreement defines "Proposed Transaction" as Regent's expressed "interest in purchasing certain radio station assets and/or stock from [Brill]...." Id. at 1443.
By the end of 2001, Brill's bondholders ("Bondholders") and creditors formed a committee ("Creditors Committee") to investigate filing an involuntary Chapter 7 bankruptcy against some of Brill's radio stations and newspapers (respectively "Debtor Stations" and "Debtor Newspapers," collectively "Debtor Affiliates"). The Creditors Committee sought Regent's help in devising a plan to stave off bankruptcy or in working out an arrangement wherein Regent would purchase Brill's Debtor Affiliates. On January 11, 2002, investment banking firm Jefferies & Co. made a presentation to Regent called "Project Hoosier," which outlined a two-step procedure where "Alan Brill transfers his radio assets for cancellation of intercompany obligations plus assumption of the exercise option[,]" and Brill's radio assets are sold to Regent Id. at 1569. No pre-bankruptcy agreement was reached, and on January 17, 2002, the Bondholders filed an involuntary Chapter 7 petition against the Debtor Affiliates in the United States Bankruptcy Court for the Southern District of Indiana.
During the spring of 2002, Brill and Regent continued to negotiate a possible sale concerning Brill's radio stations. Meanwhile, investment banking firm Robertson Stephens prepared for Regent a report titled "Brill Media Co LLC Meeting Notes." Id. at 1590. The report was a financial model containing Brill's income statement, cash flow, and balance sheet, along with a debt overview and revenue breakdown by radio station. At the same time, the bankruptcy court adopted a plan to liquidate the Debtor Affiliates at auction ("the Auction"). In preparation for the August 2002 Auction, the Bankruptcy Administrative Officer ("BAO") sought information from Brill to be made available to potential bidders as part of their due diligence. In May 2002, Regent submitted its bidder's request for that information from the BAO. Shortly thereafter, Brill provided
In June 2002, Brill and Regent negotiated concerning a potential bidding partnership at the upcoming Auction. On July 8, Brill requested another confidentiality agreement ("2002 Agreement") with Regent that Regent signed on July 11, 2002. The 2002 Agreement states in pertinent part:
Id. at 1008-10.
Throughout July 2002, Brill and Regent exchanged emails concerning the upcoming Auction. By the end of July, negotiations had stalled. Regent eventually partnered with 21st Century for the Auction, and Brill partnered with Cumulus Media ("Cumulus"). Regent and 21st Century submitted the highest bid at Auction, with Regent acquiring the Debtor Stations and 21st Century acquiring the Debtor Newspapers.
On August 20, 2008, Brill filed an action in the trial court against Regent and numerous other defendants for breach of contract, fraud, and other enumerated acts of malfeasance.
In January 2013, Regent filed a motion for summary judgment. In March 2013, Brill filed a brief in opposition, claiming that Regent breached the Agreements by engaging in contacts with third parties. Brill also filed a motion to strike the portions of Regent's brief in support of summary judgment that referenced parol evidence. Regent filed motions to strike new claims of breach of contract advanced in Brill's brief in opposition to summary judgment and a new damage claim for lost rental income outlined in Brill's expert report. In April 2013, the trial court held a hearing on all pending motions and eventually denied Brill's motion to strike and granted both Regent's motion to strike and its motion for summary judgment. This appeal and cross-appeal ensued.
We first address Regent's cross-appeal contention that the trial court erred in denying its Indiana Trial Rule 12(B)(6) motion to dismiss Brill's second amended complaint as time-barred by Virginia's statute of limitations. See Va.Code § 8.01-246(2) ("In actions on any contract which is not otherwise specified and which is in writing and signed by the party to be charged thereby, or by his agent, [the action shall be brought] within five years whether such writing be under seal or not."); but cf. Ind.Code § 34-11-2-11 (requiring that an action on written contract other than for payment of money must be commenced within ten years of accrual).
Here, the 2000 Agreement and 2002 Agreement contain nearly identical choice of law provisions: "This Agreement shall be interpreted and the rights of the parties determined under the laws of the Commonwealth of Virginia without regard to the conflict of law provisions thereof." Appellants' App. p. 1444 (2000 Agreement). "This Confidentiality Agreement shall be governed by and construed in accordance with the internal laws of the Commonwealth of Virginia (without regard to any conflict of law provisions thereof)." Id. at 1010 (2002 Agreement). The parties agree that Virginia law controls the substantive issues; however, they disagree concerning which state's law controls procedural
Interpretation and construction of contract provisions are questions of law. Fischer v. Heymann, 943 N.E.2d 896, 900 (Ind.Ct.App.2011), trans. denied. We review the contract as a whole, ascertaining the parties' intent, and making every attempt to construe the contract's language "so as not to render any words, phrases, or terms ineffective or meaningless." Id. (quotation omitted). Generally, Indiana courts will give effect to the parties' agreement as to controlling law. JKL Components Corp. v. Insul-Reps, Inc., 596 N.E.2d 945, 950 (Ind.Ct.App.1992), trans. denied; see also TM Delmarva Power, L.L.C. v. NCP of Va., L.L.C., 263 Va. 116, 557 S.E.2d 199, 200 (2002) ("[N]o word or clause in a contract will be treated as meaningless if a reasonable meaning can be given to it, and parties are presumed not to have included needless words in the contract.").
In arguing that that the choice of law provision applies only to substantive law, Brill relies on JKL, which states, "[A] contract provision that an agreement is to be governed by the law of another state operates only to import the substantive law of that state; the procedural law of the forum state applies to procedural issues." JKL, 596 N.E.2d at 950.
In OrbusNeich, the United States District Court for the District of Massachusetts interpreted a contract containing a choice of law provision nearly identical to the one contained in Regent and Brill's Agreements, namely, "`Agreement is governed by the Laws of the Commonwealth of Massachusetts, USA, without regard for the conflicts of law provisions.'" OrbusNeich, 694 F.Supp.2d at 113 (citation omitted) (emphasis added). As in this case, at issue in OrbusNeich was whether the choice of law provision covered only substantive matters or whether it also applied to the statute of limitations, a procedural matter. The OrbusNeich court concluded that the choice of law provision governed the statute of limitations, reasoning in part:
Id. at 114 (internal quotation marks and footnotes omitted).
Regent also cites American Insurance Co. v. Frischkorn, 173 F.Supp.2d 514, 520 (S.D.W.Va.2001), where the district court concluded that a choice of law provision applied not only to substantive matters but also to the statute of limitations. There, the provision stated, "`This Agreement shall be governed by and construed in accordance with the laws of the State of California applicable to disputes occurring entirely within such State.'" Frischkorn, 173 F.Supp.2d at 520 (citation omitted). The Frischkorn court interpreted the highlighted phrase to include all of California law, whether substantive or procedural. Id.
In denying Regent's motion to dismiss, the trial court found in part,
Appellants' App. pp. 35-36.
The trial court aptly stated that Indiana follows lex fori, the law of the forum, and has rejected the circularity that results from the ancient renvoi doctrine. However, the Maroon case cited in the trial court involved a tort claim, with the question being whether to apply Illinois law or the Indiana Tort Claims Act. Maroon, 411 N.E.2d at 413. As such, unlike the present case, Maroon was not a contract dispute.
Here, the Agreements included the phrase, "without regard to [any/the] conflict of law provisions thereof," and as matter of contract interpretation, we must read the phrase in such a way as to avoid rendering it meaningless. Appellants' App. pp. 1010, 1444. We agree with the OrbusNeich court's reasoning that, where contracting parties intend to include a choice of law phrase merely pertaining to substantive law, they accomplish that end simply by stating that their agreement will be interpreted and the rights of the parties governed by the law of the specified state. OrbusNeich, 694 F.Supp.2d at 114. In such a case, the lex fori rule would dictate that the forum's procedural law would automatically govern. Id. What the additional phrase accomplishes is to place not only the substantive matters but also the procedural matters under the law of the specified state. We are persuaded by the reasoning in OrbusNeich and conclude that, in adherence to the foundations of contract interpretation, the additional phrase "without regard to conflict of law provisions thereof" must be given meaning. In other words, we deem its inclusion to be an indication of the parties' intent. This is not to say that we take the general position of reverting to the ancient renvoi doctrine; it is merely to say that the parties, as they did here, may by contract dictate an override of lex fori for purposes of a dispute arising out of their particular contract.
Based on the language used by the parties in the Agreements, we conclude that Virginia law governed both the substantive issues and the procedural issues. As such, the parties were subject to Virginia's five-year statute of limitations. Because Brill failed to timely file its complaint, the trial court should have granted Regent's motion to dismiss.
Even if we were to conclude that the trial court properly denied the motion to dismiss, we would affirm the grant of summary judgment in favor of Regent. In reviewing a trial court's decision to grant or deny summary judgment, we use the same standard as the trial court. Worman Enters., Inc. v. Boone Cnty. Solid Waste Mgmt. Dist., 805 N.E.2d 369, 373 (Ind.2004). A motion for summary judgment is properly granted only when the
Where the parties' disputes concern matters of contract interpretation, they are questions of law. Westfield Cos. v. Knapp, 804 N.E.2d 1270, 1274-75 (Ind. Ct.App.2004), trans. denied; PBM Nutritionals, LLC v. Lexington Ins. Co., 283 Va. 624, 724 S.E.2d 707, 712 (2012). Cases involving contract interpretation are particularly appropriate for summary judgment. Knapp, 804 N.E.2d at 1274. When interpreting a written contract, we attempt to determine the intent of the parties at the time the contract was made. Dave's Excavating, Inc. v. City of New Castle, 959 N.E.2d 369, 376-77 (Ind.Ct.App.2012), trans. denied; Eure v. Norfolk Shipbuilding & Drydock Corp., 263 Va. 624, 561 S.E.2d 663, 668 (2002).
Both Indiana and Virginia courts apply the four corners rule, which states that, where the language of a contract is unambiguous, the parties' intent is to be determined by reviewing the language contained within the "four corners" of the contract and "parol or extrinsic evidence is inadmissible to expand, vary, or explain the instrument unless there has been a showing of fraud, mistake, ambiguity, illegality, duress or undue influence." Adams v. Reinaker, 808 N.E.2d 192, 196 (Ind.Ct. App.2004) (quotation omitted); Pocahontas Min. LLC v. CNX Gas Co., LLC, 276 Va. 346, 666 S.E.2d 527, 531 (2008) ("When the writing, considered as a whole, is clear, unambiguous, and explicit, a court asked to interpret such a document should look no further than the four corners of the instrument."). "[T]he prohibition against the use of parol evidence is by no means absolute. Parol evidence may be considered if it is not being offered to vary the terms of the written contract, and to show that fraud, intentional misrepresentation, or mistake entered into the formation of a contract." America's Directories Inc. v. Stellhorn One Hour Photo, Inc., 833 N.E.2d 1059, 1066 (Ind.Ct.App.2005) (citation omitted), trans. denied.
Brill drafted and both parties signed two confidentiality agreements — the 2000 Agreement and the 2002 Agreement. Throughout the proceedings, Brill has characterized Regent's participation in the Auction as a breach of those agreements.
Brill contends that the 2002 Agreement prohibited Regent from attending and bidding against it at the bankruptcy Auction. As support, Brill refers to the 2002 Agreement's broad definition of "Transaction" and Regent's agreement "not to use ... any of the Information in a manner detrimental to [Alan Brill] or for a purpose other than for an evaluation of Regent involvement in the Transaction, whatever form that may take." Appellants' App. p. 1009. Notwithstanding the seemingly broad definition of "Transaction," the Agreement defined "Company" narrowly as, "[Alan Brill], Brill Media Company, LP and the Non-Debtor Affiliates" collectively. Id. at 1008 (emphasis added). The 2002 Agreement explained that the Company would be disclosing "confidential propriety information regarding the Company's non-public affairs," and Regent agreed to maintain the confidentiality of that information. Id. The 2002 Agreement also specifically stated that Regent was subject to a separate confidentiality agreement regarding the Debtor Affiliates. Id.
Thus, despite the breadth of the definition of "Transaction," the 2002 Agreement applied to the information about the Company, not the Debtor Affiliates. In short, the subject matter of the 2002 Agreement and the subject matter of the Auction are distinct as a matter of law. Brill's reliance on the 2002 Agreement is misplaced.
Brill also cites the 2000 Agreement, emphasizing its unspecified duration and maintaining that its prohibition against Regent's use of Brill's proprietary information "to make contact with, solicit or enter into a business relationship with any other person or entity not a party to the Proposed Transaction" effectively prohibited Regent from attending and bidding at the August 2002 Auction. Id. at 1444. In contravention, Regent submits that, at the time the parties executed the 2000 Agreement, they could not have intended that the "Proposed Transaction" would include a bankruptcy auction because there was no evidence of any impending bankruptcy. Regent also notes that the proprietary information obtained in 2000 was stale and cumulative and thus of no efficacy in August 2002. See id. at 305-07 (referring to Alan Brill's deposition testimony that it sent the BAO the information it requested, that the BAO had discretion concerning what information to send to potential bidders, and that the information was "much the same" as information given pursuant to the confidentiality agreements already in place). Additionally, Regent emphasized the 2000 Agreement's allowance for use of confidential information obtained from another source. Id. at 1443. In this vein, Regent asserts that the BAO was its
Throughout the proceedings, Regent has steadfastly claimed that it did not use the confidential information it received from Brill in making its bid at the Auction. Instead, it purportedly used only the information provided by the BAO to all potential bidders in the form of the Debtors Agreement. Notably, this is the only agreement that specifically prohibits disclosure of confidential information concerning the Debtor Affiliates. Brill was not a party to this agreement; its signatories were Regent and the BAO. To the extent that the Debtors Agreement affects Brill as owner of the Debtor Affiliates, we note that it explicitly states, "This Agreement... supersedes all prior agreements, correspondence, arrangements and understandings relating to the subject matter hereof."
Brill claims that an issue of material fact exists concerning what information Regent actually used in formulating its bid. It relies on PepsiCo, Inc. v. Redmond, 54 F.3d 1262, 1269 (7th Cir.1995), for the proposition that Regent could not possibly have compartmentalized all the confidential information that it had received from Brill over years of negotiations to the point that it did not use any of that information to Brill's detriment when bidding at the Auction. In PepsiCo, Redmond, a high-level manager overseeing about twenty percent of PepsiCo's business, was courted away to Quaker, a competitor. PepsiCo sought an injunction to prevent Redmond from misappropriating trade secrets, divulging confidential information, and assuming any duties related to pricing, marketing, and distribution. PepsiCo, 54 F.3d at 1263. In affirming the trial court's decision to grant a six-month injunction, the Seventh Circuit emphasized that PepsiCo had presented substantial evidence that Redmond possessed extensive and intimate knowledge concerning PepsiCo's strategic goals for the coming year. Id. at 1269. The PepsiCo court reasoned that "unless Redmond possessed an uncanny ability to compartmentalize information, he would necessarily be making decisions about [his new employer's competitive product line] by relying on his knowledge of [PepsiCo's] trade secrets." Id. The court concluded that it was not Redmond's general skills and knowledge acquired while at PepsiCo that PepsiCo sought to silence but rather his knowledge of its particularized plans and processes unknown to others in the industry. Id.
Relying on PepsiCo, Brill asserts that the breadth of the information that it provided to Regent far exceeded that which Regent acquired from the BAO, i.e., not merely facts and figures, but also Alan Brill's analysis of those figures as well as information concerning operations, personnel, and market history. Regardless, Brill relies only on speculation, surmising that Regent must have used the prohibited information because it could not have compartmentalized it and reasoning that it is as impossible to regain confidential information as it is to "unring" a bell. See Promatek Industries, Ltd. v. Equitrac Corp., 300 F.3d 808, 813 (7th Cir.2002) (affirming preliminary injunction where competitor misappropriated Promatek's trademark in a metatag, likening competitor's misappropriation of goodwill to an attempt to unring a bell).
Here, Brill has failed to designate any identifiable confidential information that Regent actually used at the Auction in contravention of either the 2000 Agreement or the 2002 Agreement. Instead, Brill merely speculates that Regent must have used the confidential information that it had provided. In his deposition, Alan Brill testified in part:
Appellants' App. pp. 315-318. In short, Brill attempts to create a question of fact based on mere speculation, which it may not do. See Beatty, 896 N.E.2d at 20.
In his deposition, Alan Brill also stated his belief that by signing the 2000 Agreement Regent was absolutely banning itself from bidding at the unforeseen Auction, even though the BAO released much of the same information to Regent (and all other potential bidders) that had previously been covered by the 2000 Agreement. Alan Brill was questioned:
Appellants' App. pp. 313-14.
Alan Brill's assertions would render meaningless a key provision of the 2000 Agreement that excluded information learned from other sources. The designated evidence shows that, through the Debtors Agreement, the BAO provided the due diligence information that Regent needed to prepare its Auction bid. During the three-day Auction, Regent combined its bid with 21st Century's at the behest of the bankruptcy court and, even in so doing, it was not violating any exclusive dealing agreement because none existed. In fact, Regent designated documents indicating that Alan Brill was previously aware of Regent's intent to attend and bid at the Auction.
In sum, the Agreements contained choice of law provisions, which encompassed both substantive and procedural law. As such, Virginia's statute of limitations barred Brill's claims as untimely. Therefore, we reverse the denial of Regent's motion to dismiss. We also conclude that, as a matter of law, the Agreements did not prohibit Regent from attending and bidding at the Auction, and Brill failed to identify any confidential information that Regent actually used in formulating its bid that resulted in a competitive disadvantage to Brill. Thus, the trial court properly granted Regent's motion for summary judgment.
Reversed.
BAKER, J., and NAJAM, J., concur.
