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Grunley Walsh U.S. LLC v. Raap, 09-1613 (2010)

Court: Court of Appeals for the Fourth Circuit Number: 09-1613 Visitors: 2
Filed: Jun. 30, 2010
Latest Update: Feb. 21, 2020
Summary: UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 09-1613 GRUNLEY WALSH U.S., LLC; KENNETH M. GRUNLEY; GRUNLEY CONSTRUCTION COMPANY, INCORPORATED, Plaintiffs - Appellants, v. LOREN RAAP; G-W MANAGEMENT SERVICES, LLC, Defendants – Appellees, and UNITED STATES GENERAL SERVICES ADMINISTRATION, Defendant. Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria. Liam O’Grady, District Judge. (1:08-cv-00446-LO-JFA) Argued: May 13, 2010 Decid
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                              UNPUBLISHED

                   UNITED STATES COURT OF APPEALS
                       FOR THE FOURTH CIRCUIT


                              No. 09-1613


GRUNLEY WALSH U.S., LLC; KENNETH            M.   GRUNLEY;    GRUNLEY
CONSTRUCTION COMPANY, INCORPORATED,

                 Plaintiffs - Appellants,

           v.

LOREN RAAP; G-W MANAGEMENT SERVICES, LLC,

                 Defendants – Appellees,

           and

UNITED STATES GENERAL SERVICES ADMINISTRATION,

                 Defendant.



Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria.   Liam O’Grady, District
Judge. (1:08-cv-00446-LO-JFA)


Argued:   May 13, 2010                           Decided:   June 30, 2010


Before NIEMEYER, GREGORY, and SHEDD, Circuit Judges.


Affirmed by unpublished opinion.       Judge Gregory wrote             the
opinion, in which Judge Niemeyer and Judge Shedd joined.


ARGUED: Michael Jay Schrier, K&L GATES, LLP, Washington, D.C.,
for   Appellants.    Brian  Lawrence  Schwalb,  VENABLE,  LLP,
Washington, D.C., for Appellees.   ON BRIEF: Kara A. Elgersma,
K&L GATES, LLP, Washington, D.C., for Appellants.    Damon W. D.
Wright, VENABLE, LLP, Washington, D.C., for Appellees.


Unpublished opinions are not binding precedent in this circuit.




                                2
GREGORY, Circuit Judge:

     The United States District Court for the Eastern District

of Virginia entered summary judgment in favor of the defendants,

Loren Raap (“Raap”) and G-W Management Services, LLC, in a suit

alleging      trademark   infringement       and    unfair    competition       under

federal and common law.         The court based its grant of summary

judgment on a release signed in November 2007 when The Grunley

Walsh, LLC sold its international construction segment.                          The

plaintiff, Grunley Walsh U.S. (“GW”), now argues that the court

erred in considering the release when the defendants failed to

plead    it   as   an   affirmative   defense,        and    that   even   if   such

consideration was proper, the court erred on the merits of the

release defense.        For the reasons set forth below, we affirm.



                                        I.

    In     1998,    Grunley   Walsh   Joint        Venture,   LLC    (“GWJV”)    was

formed     when    Kenneth    Grunley        (“Grunley”)      and    James      Walsh

(“Walsh”) merged their construction companies.                      GWJV earned a

reputation as a premier construction company in the Washington,

D.C. area, acting as a full-service general contracting firm. 1

     1
       Notable projects include the World War II Memorial on the
National Mall, the stabilization and preservation of the
Washington   Monument,  Washington   Metropolitan  Area  Transit
Authority Metro escalator canopy construction, and work on a
number of Smithsonian Institution properties.



                                        3
Raap       was   involved    in   the    creation   of    GWJV    and     was   named

President/General Manager of the company, a position he held

from 1998 until his termination on May 31, 2007.                        GWJV changed

its name to The Grunley Walsh, LLC in 2004.

       Meanwhile, in June 2000, Grunley, Walsh, and Raap created

Grunley Walsh Management Services, LLC to handle mainly small

business set-aside projects.             Grunley and Walsh each owned 24.5%

of   Grunley      Walsh     Management    Services,      with    Raap    owning   the

remaining 51%.        In 2002, Grunley and Walsh sold their interests

to Raap.         Raap later changed company’s name to G-W Management

Services, LLC (“GWMS”) to avoid name confusion and potential

small business regulation violations.                 However, Raap continued

to act as President and General Manager of the Grunley Walsh

entity while owning and operating GWMS.               During this time, “with

the consent of Mr. Grunley and Mr. Walsh, Mr. Raap ran GWMS out

of the Grunley Walsh office, utilizing Grunley Walsh personnel

and office equipment.”             J.A. 422. 2      “GWMS and Grunley Walsh

executed a contract to govern this dynamic,” which lasted until

Raap moved GWMS to a different location in January 2007.                          
Id. During this
close relationship, Grunley and Walsh knew confusion

among users of their construction services was likely because of


       2
       Citations herein to “J.A. __” refer to the contents of the
Joint Appendix filed by the parties in this appeal.




                                           4
the continuing similarity in company names but admitted that

getting Raap to again change GWMS’s name was “not the highest

priority.”      
Id. at 681-83,
719-21.

      Aside from its domestic business, The Grunley Walsh, LLC

performed     international          construction               work.         On    December      23,

2006,   the    owners    of     The       Grunley         Walsh,        LLC    entered       into   a

Membership      Interest       Purchase          Agreement         (“MIPA”)          with     Robert

Farah for the sale of the international segment of the Grunley

Walsh entity and the retention of the domestic segment.                                       As the

district      court      found,       “[i]n           order        to     accommodate            this

international and domestic division of property, Mr. Grunley and

Mr. Walsh restructured their corporate framework.                                        First, they

changed the name of The Grunley Walsh, LLC to Grunley Walsh

International [(‘GWI’)].”                 
Id. at 423.
            Grunley and Walsh then

used their separate construction companies to create GW.                                          The

international       business        was     to       go    to    GWI,     and       the     domestic

business      was   to   go    to     GW.            To    accomplish         this,        the   MIPA

expressly     transferred       everything            to    GW     except          for    enumerated

“Retained Property” such as certain international construction

contracts, international past performance, facility clearances,

and   other    information          related          to    international            work.        Such

retained property was to remain with GWI.

      Significantly,          the    MIPA        contained         a     liability          release,

called the “Sellers’ Release,” (“the Release”) which was signed


                                                 5
by   Grunley     and   Walsh    in   November   2007.       The   sellers    were

identified as Kenneth M. Grunley Construction Co. and James V.

Walsh     Construction    Co.        The   release   also   named    these   two

identities as sole owners of the “Company,” which was GWI.                    The

buyer was Farah.       In pertinent part, the Release states:

            Each Seller, on behalf of itself and each of its
      legal    representatives,    affiliates,   successors   and
      assigns, and each of such legal representatives’,
      affiliates’, successors’ and assigns’ Representatives
      (collectively, the “Related Parties”), hereby releases
      and forever discharges Buyer, the Company and each of
      their respective individual, joint or mutual, past,
      present     and    future   Representatives,    affiliates,
      stockholders, members, controlling persons, successors
      and    assigns      (individually,   a    “Releasee”    and
      collectively, “Releasees”), from any and all claims,
      demands,     Proceedings,   causes   of  action,    Orders,
      obligations,      contracts,    agreements,    debts    and
      liabilities whatsoever, whether known or unknown,
      suspected or unsuspected, both at law and in equity,
      which such Seller or any of its Related Parties now
      has, has ever had or may hereafter have against the
      respective Releasees arising at any time prior to the
      Closing, . . . .

Id. at 2877.
3

      Grunley    and   Walsh    “eventually     became   concerned    that    Mr.

Raap was engaging in improper conduct while operating GWMS, such

      3
       As defined in the MIPA, “‘Representative’ means with
respect to a particular Person, any director, officer, employee,
agent, consultant, advisor, or other representative of such
Person, including legal counsel, accountants, and financial
advisors.”     J.A. 3006.     “‘Person’ means any individual,
corporation (including any non-profit corporation), general or
limited partnership, limited liability company, joint venture,
estate, trust, association, organization, labor union, or other
entity or Governmental Body.” 
Id. at 3005.



                                           6
as using the GRUNLEY-WALSH mark without permission to acquire

government       construction      projects   for   GWMS”    and     “divert[ing]

business opportunities from Grunley Walsh to GWMS.”                  
Id. at 422.
Therefore, Grunley and Walsh fired Raap in May 2007, and GW

commenced this suit against Raap and GWMS.              On August 15, 2008,

GW filed an Amended Complaint asserting trademark and unfair

competition claims under both federal and common law. 4

       The parties then filed lengthy cross-motions for summary

judgment.       GWMS and Raap argued that GW did not exist during the

relevant time period and thus had no damages or standing.                    GWMS

and Raap also claimed that the close relationship over the years

between GWMS and GWI barred GW’s claims.              Although they did not

plead “release” as an affirmative defense, in their motion, GWMS

and Raap emphasized that with the sale of their ownership in

GWI,       Grunley   and   Walsh   executed   the   MIPA,    which    included   a

release from any claims arising before the MIPA’s execution.

This release, GWMS and Raap argued, applied to Raap.                  GW, on the

other hand, argued that the release did not apply to Raap or

GWMS and that GWMS’s frequent use of “Grunley Walsh Management


       4
       GW also asserted claims for unjust enrichment and breach
of contract. The parties stipulated to dismissal of the common
law fraud and negligent misrepresentation claims.

     Raap and GWMS filed               counterclaims,       which    were   later
dismissed without prejudice.




                                         7
Services” in correspondence constituted trademark infringement

and created confusion about the relationship between GWMS and

GWI.

       The     district      court,       after     hearing   argument,       denied       GW’s

motion and granted the summary judgment motion filed by Raap and

GWMS.        The court first considered whether the Release was a

proper       basis    for      summary       judgment.        The    court     found       that

although Raap or GWMS did not plead “release” as an affirmative

defense, GW knew about, and was therefore not prejudiced by,

consideration of the Release.                       Although no parol evidence was

offered, the court stated it would not consider such evidence in

interpreting         the    Release         because    its    terms    were        clear    and

unambiguous.         
Id. at 432.
       After examining the Release, the court found GW to be a

releasor       because      it    is   an    “affiliate”      of    sellers    Kenneth       M.

Grunley Construction Co. and James V. Walsh Construction Co.

using a control-based definition of “affiliate.”                            
Id. at 433-34.
The court next found GWMS to be a releasee because “it is a

‘past affiliate’ of ‘the Company’ [GWI].”                      
Id. at 435.
         Finally,

Raap     was    found       to    be   a     releasee     because      he     is    a   “past

Representative”          “of     all   three        Grunley   Walsh    iterations          that

existed       between      1998     and      2007,    including      [GWI]     (i.e.       ‘the

Company’)” based on his service as President of the respective

Grunley Walsh entity until May 30, 2007.                      
Id. at 437.

                                                8
     Because the Release discharged the releasees “from any and

all claims” arising from facts occurring before the closing date

of November 6, 2007, the court “[held] that [GW] released GWMS

and Mr. Raap from the claims it filed in this suit, to the

extent those claims arose from facts occurring on or before the

closing date of November 6, 2007.”    
Id. at 438.
  Additionally,

because the court found “none of the infringing uses that [GW]

accuses Mr. Raap and GWMS of committing occurred after November

6, 2007,” it concluded that “the ‘use’ element common to the

trademark and unfair competition claims in this case are not

met” and granted summary judgment on this ground as well.     
Id. at 440
(emphasis added).   GW timely appealed.



                                II.

     Whether the district court erred in considering the release

defense when it was not affirmatively pled in the answer is a

question of law that we review de novo.   See Eriline Co. S.A. v.

Johnson, 
440 F.3d 648
, 653 (4th Cir. 2006). 5    If the court did



     5
       Our precedent is less than clear on the standard of review
in this situation.    Compare Eriline Co. 
S.A., 440 F.3d at 653
(“Whether a district court has properly considered a statute of
limitations defense sua sponte is a question of law that we
review de novo.”), with Polsby v. Chase, 
970 F.2d 1360
, 1364
(4th Cir. 1992) (holding the district court did not abuse its
discretion by allowing the defendant to raise an affirmative
defense after answering), vacated and remanded on other grounds,
(Continued)


                                 9
not   err    in   such   consideration,             we   then     review    its   grant    of

summary judgment de novo.                Synergistic Intern., LLC v. Korman,

470 F.3d 162
, 170 (4th Cir. 2006).



                                              III.

                                               A.

      GWMS    and   Raap     had       the    burden     of     affirmatively     pleading

“release.”        See Fed. R. Civ. P. 8(c).                   Yet, neither party pled

this affirmative defense in their answer.                           The district court

found     that     despite    this           failure,     the     pleaded     affirmative

defenses of “accord and satisfaction” and “Plaintiff’s common

law tort claims are barred by contract” put GW on notice of a

possible release defense and that even if “release” was not pled

properly, GW was not prejudiced or unfairly surprised by the

court’s     consideration         of    the     defense.          GW   argues     that    the

failure of GWMS and Raap to affirmatively plead release resulted

in waiver of the defense such that the court’s reliance on it as

the basis for summary judgment constitutes reversible error.                               We

disagree.

      As this Court has found, “it is well established that an

affirmative       defense    is    not       waived      absent    unfair    surprise      or



507 U.S. 1048
(1993).    However, because the question of waiver
is one of law, a reviewing court should apply de novo review.




                                               10
prejudice.”     Patten Grading & Paving, Inc. v. Skanska USA Bldg.,

Inc., 
380 F.3d 200
, 205 n.3 (4th Cir. 2004); see also Brinkley

v. Harbour Recreation Club, 
180 F.3d 598
, 612 (4th Cir. 1999)

(“[T]here is ample authority in this Circuit for the proposition

that absent unfair surprise or prejudice to the plaintiff, a

defendant’s affirmative defense is not waived when it is first

raised in a pre-trial dispositive motion.”), overruled on other

grounds by Desert Palace, Inc. v. Costa, 
539 U.S. 90
(2003).

This is because “[t]he Supreme Court has held that the purpose

of    Rule   8(c)   is    to   give    the       opposing   party   notice   of    the

affirmative defense and a chance to rebut it.”                        Moore, Owen,

Thomas & Co. v. Coffey, 
992 F.2d 1439
, 1445 (6th Cir. 1993)

(citing Blonder-Tongue Labs., Inc. v. Univ. of Ill. Found., 
402 U.S. 313
, 350 (1971)).          “Thus, if a plaintiff receives notice of

an affirmative defense by some means other than pleadings, ‘the

defendant’s failure to comply with Rule 8(c) does not cause the

plaintiff any prejudice.’”             Grant v. Preferred Research, Inc.,

885 F.2d 795
,   797    (11th      Cir.   1989)     (quoting     Hassan   v.   U.S.

Postal Serv., 
842 F.2d 260
, 263 (11th Cir. 1988)).

       In this case, the district court properly found that GW was

not     unfairly     surprised         or        prejudiced    by     the    court’s

consideration of the release defense as to Raap.                        Courts have

found that affirmative defenses raised for the first time in

summary judgment motions may provide the required notice.                         See,


                                            11
e.g.,   
Brinkley, 180 F.3d at 612-13
       (affirming       the    district

court’s    order     of    summary     judgment         based    on   an    affirmative

defense first raised in the defendant’s summary judgment motion

after noting the plaintiff had “ample opportunity to respond”);

Coffey, 992 F.2d at 1445
(finding that the opposing party was

put on notice of the affirmative defense of fraud when raised in

response    to   a    motion     for    summary         judgment);    Kleinknecht       v.

Gettysburg Coll., 
989 F.2d 1360
, 1373-74 (3d Cir. 1993) (holding

that the plaintiff received sufficient notice of the affirmative

defense    because        it   was    raised      in     the    defendant’s       summary

judgment motion).          Here, Raap specifically raised the Release in

the   summary    judgment      motion.           J.A.    339    (subsection       entitled

“GWUS Released Mr. Raap From All Claims”).                         Additionally, the

parties    fully     briefed    and     argued      the    merits     of    the   release

affirmative defense before the district court.                             We therefore

find that GW has shown no unfair surprise or prejudice from

consideration of an issue GW itself fully argued.

      However, the summary judgment motion and the reply filed by

Raap and GWMS reference the Release applying only to Raap.                             The

district court appears to have sua sponte considered whether the

Release applied to GWMS.             Although a closer case, whether GW was

unfairly     surprised         or      prejudiced         remains      the        relevant

consideration.        Because the Release was GW’s own document, GW

did argue to the court that the Release did not apply to GWMS,


                                            12
and GWMS and Raap pled affirmative defenses that highlighted the

relevance    of   the   Release,        we   find    that     GW   was   not   unfairly

surprised    or   prejudiced       by    the      court’s   consideration       of   the

release defense as to GWMS.

       At the beginning of discovery, Raap and GWMS requested the

MIPA’s production.           GW then produced the documents, including

the Release.      Thereafter, GW, along with GWMS and Raap, included

the MIPA and the Release in their respective exhibit lists filed

with   the   court.      Thus,     GW    simply      was    not    surprised    by   the

court’s consideration of documents which GW’s principals signed

and which GW itself was asked about and produced.                        See Jones v.

Miles, 
656 F.2d 103
, 108 (5th Cir. 1981) (“[I]n practice[,] an

affirmative defense is not waived to the extent . . . that the

opposing party’s own evidence discloses the defense, necessarily

indicating his express consent.                   Neglect to affirmatively plead

the defense is simply noncompliance with a technicality and does

not constitute a waiver where there is no claim of surprise.”

(citation omitted)).

       Furthermore,     at   the   summary         judgment    hearing,    the    court

specifically asked whether GWMS was covered by the terms of the

Release.     J.A. 395.       GW replied that the Release did not apply

to GWMS “[b]ecause G-W Management Services was never an agent or

an officer or representative of Grunley Walsh in any way, shape

or form.     They were two separate entities, they always were two


                                             13
separate    entities.”              
Id. at 395-96.
          When    the    court     stated

“Although    Grunley          and    Walsh       were      owners        at   one      time,”    GW

responded,    “At       one     time.      . . .      I    don’t    think        there    is    any

reasonable way to interpret that release language to include

that because at no point was G-W Management Services an agent,

representative or . . . had any other relationship with Grunley-

Walsh International.”               
Id. at 396.
           Thus, beyond being aware of

the Release, GW specifically addressed whether it applied to

GWMS.

      GWMS and Raap additionally argue that the pled affirmative

defenses of “accord and satisfaction” and “Plaintiff’s common

law tort claims are barred by contract” put GW on notice of a

possible     release      defense.              The    district          court    agreed,       and

adopted    this    as     one       rationale        for    its    consideration          of    the

Release.          While       “release”         is        unquestionably          a     different

affirmative defense, which should have been pled, we believe the

district     court      correctly           noted         that    the     pled        affirmative

defenses “convey[ed] to [GW] that Mr. Raap and GWMS believed a

contract existed that barred the claims filed in this suit.”

Id. at 428.
       This notice precludes GW from now showing that it

was   unfairly     surprised          by    the       court’s      consideration          of    the

Release, and this preclusion applies equally to both Raap and

GWMS.




                                                14
                                              B.

       GW argues that even if the district court did not err in

considering the Release, the court erred in concluding that it

barred the suit from proceeding.                   Preliminarily, GW claims that

the court committed legal error in declining to consider parol

evidence     in    interpreting         the   Release,      which    was    the    court’s

basis for dismissing GW’s claims to the extent they arose from

facts occurring on or before November 6, 2007. 6                           However, GW’s

argument     is    a   bit    of    a   red   herring.        GW    offered       no    parol

evidence      to    demonstrate         any   contrary      interpretation         of     the

Release and never indicated an intention to do so.                            Indeed, GW

conceded at oral argument that no such parol evidence is in the

record.      As the party arguing that parol evidence should have

been   considered,       GW   had       the   burden   to   proffer    such       evidence

before      the    district       court.       Therefore,     absent       any    evidence

demonstrating that the Release means anything other than what it

says, we find the court’s statement that it would not consider

parol evidence immaterial.

       We   next    turn     to    GW’s    argument    that    the    court       erred    in

interpreting the plain language of the Release to include Raap




       6
       GW does not contest the portion of the summary judgment
order dispensing with claims arising from facts occurring on or
after November 6, 2007.




                                              15
and GWMS. 7      As to Raap, GW has always asserted that he was a past

employee       or    agent      of   GWI.     
Id. at 20-21.
       Based    on   this

uncontested fact and the definitions section of the MIPA which

defined     “Representative”           as   “any    director,    officer,       employee,

agent, consultant, advisor or other representative” of GWI, 
id. at 3006,
       the    court     determined       that      Raap    was     a     “past

Representative”:

       Mr.   Raap   unquestionably   qualifies  as   a  “past
       Representative” of all three Grunley Walsh iterations
       that existed between 1998 and 2007, including [GWI]
       (i.e. “the Company”).     Specifically, Mr. Raap began
       working as President of [GWJV] in 1998 and was serving
       in this same capacity when [GWI] was formed on
       December 15, 2006.     Mr. Raap continued working as
       President of [GWI] for over five months until he was
       fired on May 30, 2007.

Id. at 437.
         We agree with the straight-forward analysis of the

district court.

       GW   repeats        an   argument     rejected     by    the    district     court,

claiming that the term “Representative” covers only employees

acting      in       their      professional        capacity.          This,     however,

contradicts the plain language of the Release, which refers to

“any director, officer, employee, agent, consultant, advisor, or

other representative” as well as “any and all claims.”                              
Id. at 2877
   (emphasis         added).      As   the    district     court    found,     “[t]he


       7
       All parties agree that GW is a releasor under the terms of
the Release.




                                             16
Sellers [sic] Release contains no language supporting, or even

hinting, that the Sellers [sic] Release should be restricted in

this manner.”         
Id. at 438.
    We agree, and GW offers no evidence

to support a departure from the Release’s plain meaning.                     See

Bridgestone/Firestone,        Inc.    v.    Prince   William   Square   Assocs.,

463 S.E.2d 661
, 664 (Va. 1995) (“When contract terms are clear

and unambiguous, a court must construe them according to their

plain meaning.”).         We cannot allow GW to rewrite the Release’s

broad      language    with   an    unsupported      contention.    Thus,   the

district court committed no error in finding that Raap is a

releasee. 8

       As to GWMS, GW concedes that “[w]hile GWMS was owned by the

owners of GW, from 2000 until June 2002, it was an affiliate of

GW.”       Petr.’s Br. 42.    GW made similar admissions below, and the

district court accordingly found that

       between 2000 and 2002, it is indisputable that Mr.
       Grunley and Mr. Walsh had significant ownership in and
       control over GWMS, in addition to co-owning [GWJV].
       Even more, GWMS and [GWJV] had a unique and close
       connection,   since   they  both   operated   in   the
       construction field and shared office space.        The

       8
       In an argument made for the first time on appeal, GW
asserts that the Release cannot apply to Raap because he is not
on a November 2007 list of “current employees” of GWI. See J.A.
3069-70. GW seems to ignore the word “past” from the Release’s
use of the term “past Representative.”    Thus, GW’s argument is
unavailing, as the Release includes not only “current” or
“present   Representatives,”   but    expressly   covers   “past
Representatives” as well. 
Id. at 2877.



                                           17
     common ownership and close working connection between
     these two companies compel the Court to conclude that
     GWMS was, between 2000 and 2002, an affiliate of
     [GWJV].    It necessarily follows, then, that GWMS
     qualifies as a “past affiliate” of “the Company”
     [GWI], since [GWJV] and [GWI] are the same corporate
     entity. 9

J.A. 436-37.    We again agree with the court’s application of the

plain meaning of the Release.

     Despite    the   uncontested       facts    and   admissions,    GW     now

advances new arguments.          First, GW argues that because Grunley

and Walsh sold their interests in GWMS to Raap in June 2002,

GWMS ceased being an affiliate of GW.            Therefore, GW claims that

GWMS is only a “past affiliate” to the extent any claims covered

by the Release arose on or before June 2002.              The Release does

not contain a June 2002 date restriction, however.                   In fact,

such restriction contradicts the plain language of the Release,

which    releases   “any   and    all   claims   . . .   whether     known   or

unknown, suspected or unsuspected . . . which such Seller or any

of its Related Parties now has, has ever had or may hereafter

have against the Releasees arising at any time prior to Closing”

on November 6, 2007.       
Id. at 2877.
     Because it is clear that all


     9
       The court concluded that Grunley and Walsh “maintained co-
ownership of the Grunley Walsh entity until they resigned from
[GWI] on November 6, 2007,” and that despite the various company
names, GWJV, The Grunley Walsh LLC, and GWI is “one continuous
corporate entity having the same corporate identity.”      
Id. at 435-36.
The parties do not dispute this conclusion.




                                        18
claims arising before November 6, 2007, were released, we reject

GW’s manufactured date restriction.

     Second,      GW   claims    that   GWMS    disclaimed    being     a    “past

affiliate” of GW from June 2002 through May 2007 because it

qualified    as   a    small    business     under   the   applicable       federal

regulations, which determine company size by adding affiliated

companies.     This argument is fatally flawed.              As we previously

found, the Release does not contain a date restriction, and the

fact remains that GW concedes GWMS is a “past affiliate” prior

to June 2002.      This is sufficient in and of itself to find that

the Release applies to GWMS.               Indeed, Grunley and Walsh sold

their interest in GWMS out of concern that GWMS was an affiliate

of their other companies.           
Id. at 911.
       Moreover, whether GW

believes GWMS should have qualified as a small business under

federal regulations is irrelevant to whether GWMS was a “past

affiliate” of GWI.        The control-based definition of “affiliate”

used by the court in no way depends on federal regulation of

small business set-asides.          See 
id. 433-34. This
is evidenced

by the second ground the district court provided for finding

GWMS to be an affiliate:

     Between December 15, 2006, the date that [GWI] was
     formed, and May 30, 2007, the date Mr. Raap was fired,
     Mr. Raap served simultaneously as the owner of GWMS
     and President of [GWI]. Therefore, it is indisputable
     that a single individual possessed significant amounts
     of control over both companies during that span of
     time.


                                        19

Id. at 437.
  We therefore find that district court committed no

error in finding that GWMS is a releasee. 10



                                IV.

     Because the court properly found that both Raap and GWMS

come within the terms of the Release, this Court affirms the

decision of the district court. 11

                                                         AFFIRMED




     10
       We also reject GW’s final argument against application of
the Release – that the claims at issue were not released because
they are unrelated to the sale of the international business,
the transaction during which the Release was created.        Once
again, GW ignores the broad plain language of the Release, which
releases “any and all claims” without qualification.      
Id. at 2877.
     11
       In affirming summary judgment in favor of the defendants,
we necessarily reject GW’s additional argument that it should
have been awarded summary judgment on its Lanham Act claims.

     Additionally, because we affirm the court’s grant of
summary judgment, we do not reach GW’s argument that the court
erred in excluding GW’s duty of loyalty damages as a discovery
sanction.




                                 20

Source:  CourtListener

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