Filed: Jan. 07, 2011
Latest Update: Feb. 21, 2020
Summary: UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 10-1480 LEDO PIZZA SYSTEM, INCORPORATED; LEDO PIZZA CARRYOUTS, LTD.; ROBERT M. BEALL; MARGARET K.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; T
Summary: UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 10-1480 LEDO PIZZA SYSTEM, INCORPORATED; LEDO PIZZA CARRYOUTS, LTD.; ROBERT M. BEALL; MARGARET K.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; TH..
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UNPUBLISHED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Affirmed in part, vacated in part, and remanded by unpublished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Unpublished opinions are not binding precedent in this circuit.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
3
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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