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Idearc Media, LLC v. Palmisano & Associates, P.C.

United States District Court, D. Arizona

March 5, 2013

Idearc Media, LLC, Plaintiff,
v.
Palmisano & Associates, P.C., an Arizona professional corporation and Palmisano Law, PLLC, an Arizona professional limited liability company, Defendants

Page 940

For Idearc Media LLC, Plaintiff: Cory L Braddock, Robert Arthur Henry, Snell & Wilmer LLP - Phoenix, AZ, Phoenix, AZ.

For Palmisano & Associates PC, Palmisano Law, PLLC, Defendants: James E Brown, James E Brown PC, Phoenix, AZ.

OPINION

James A. Teilborg, Senior United States District Judge.

Page 941

ORDER

Pending before the Court is Plaintiff's Motion for Summary Judgment (Doc. 48). The Court now rules on the Motion.

I. BACKGROUND

Plaintiff Idearc Media, LLC, now known as SuperMedia, LLC (hereinafter " Plaintiff" or " SuperMedia, LLC" ) publishes the Verizon Yellow Pages and White Pages telephone directories and Superpages.com. (Plaintiff's Statement of Facts (" Doc. 49" ) at ¶ 1 and Defendants' Responses to Plaintiff's Separate Statement of Facts (" Doc. 52" ) at ¶ 1). Defendant Palmisano & Associates, P.C. is an Arizona professional corporation and is solely owned by Joseph Palmisano. (Doc. 32 at ¶ 2; Doc. 34 at ¶ 2; Doc. 49 at ¶ 17; Doc. 52 at ¶ 17). Defendant Palmisano Law is a single member Arizona professional limited liability company wholly owned by Joseph P. Palmisano. (Doc. 32 at ¶ 3; Doc. 34 at ¶ 3 Doc. 49 at ¶ 18; Doc. 52 at ¶ 18).

A. The Contracts

On April 20, 2007, Joseph P. Palmisano executed an Application for Directory Advertising on behalf of Palmisano & Associates, P.C. to purchase advertising in the Greater Tucson directory to be published in November 2007. (Doc. 49 at ¶ 2; Doc. 49-1 at Exhibit A; Doc. 52 at ¶ 2). On September 28, 2007, Palmisano & Associates executed an Application for Directory Advertising to purchase advertising in the Phoenix South Valley directory to be published in February 2008. (Doc. 49 at ¶ 3; Doc. 49-1 at Exhibit B; Doc. 52 at ¶ 3). On December 14, 2007, Palmisano & Associates executed an Application for Directory Advertising to purchase advertising, including back cover, in the Greater Phoenix directory to be published in June 2008. (Doc. 49 at ¶ 4; Doc. 49-1 at Exhibit C; Doc. 52 at ¶ 4). On July 22, 2008, Palmisano & Associates executed an Application for Directory Advertising to purchase advertising in the Greater Tucson directory to be published in November 2008. (Doc. 49 at ¶ 5; Doc. 49-1 at Exhibit D; Doc. 52 at ¶ 5). On December 3, 2008, Palmisano & Associates executed an Advertising Agreement to purchase advertising in the Phoenix-North Valley and Phoenix-South Valley directories to be published in February 2009. (Doc. 49 at ¶ 6; Doc. 49-1 at Exhibit E; Doc. 52 at ¶ 6).

It is undisputed that, in each contract, Palmisano & Associates agreed to pay the monthly rate listed in each Application for Directory Advertising. (Doc. 49 at ¶ 10; Doc. 52 at ¶ 10). It is further undisputed that SuperMedia published all of the contracted-for advertisements for Palmisano & Associates and Palmisano Law. (Doc. 49 at ¶ ¶ 12-13; Doc. 52 at ¶ ¶ 12-13).

It is likewise undisputed that: (1) Plaintiff invoiced Palmisano & Associates, (2) Plaintiff received payment, in whole or in part, on some of the invoices; (3) Plaintiff did not receive payments after November 2008; (4) Plaintiff accelerated the remaining balance due under the Agreements upon Defendants' failure to pay the invoices; (5) Palmisano & Associates failed to pay $187,068.00 in advertising charges; (6) on September 16, 2009, interest in the amount of $12,501.54 had accrued on the past due amount and interest continues to

Page 942

accrue at a rate of 18% per annum until judgment is entered; and (7) the Agreements' Terms and Conditions require Palmisano & Associates to pay all collection costs and attorneys' fees. (Doc. 49 at ¶ ¶ 19-26; Doc. 52 at ¶ ¶ 19-26).

Plaintiff argues that each contract incorporated a set of standard Term and Conditions which governed the relationship between the Parties. (Doc. 49 at ¶ 7). Indeed, each contract from April 2007 to July 2008 contained the following language: " This application is subject to the Application for Directory Advertising Terms and Conditions" and " Advertiser has received a duplicate copy of the cover section of this Application and the attached Terms and Conditions, which are hereby incorporated in the cover section of this Application, and has read and understands same." (Doc. 49-1 at Exhibits A-D). The December 2008 contract contained the following language: " By signing this Agreement I acknowledge that I have received, read and agree to the Terms and Conditions that are part of this Agreement." (Doc. 49-1 at Exhibit E). Defendants deny that the Application included a Standard Set of Terms and Conditions and deny ever reading such Terms and Conditions. (Doc. 52 at ¶ ¶ 8-9).

B. Procedural History

On October 1, 2009, Plaintiff filed a Complaint against Defendants alleging four counts, specifically, breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, and open account. (Doc. 1). On November 17, 2009, Defendant Palmisano & Associates filed for bankruptcy. Thereafter, the Parties stipulated to dismiss Defendant Palmisano Law without prejudice based on the Declaration of Joseph Palmisano that Palmisano Law was not an operating entity and had no assets or revenue. (Doc. 14; Doc. 14-1). The case was then stayed pending the outcome of the bankruptcy. On November 14, 2011, when the bankruptcy case was dismissed, the stay was lifted.

Thereafter, Plaintiff moved to vacate the Order dismissing Palmisano Law or, alternatively, to amend the Complaint, because Palmisano Law was an operating entity with assets and revenue. (Doc. 22). The Court granted the Motion to Amend the Complaint and Plaintiff filed an amended Complaint re-alleging its claims of breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, and open account against Palmisano Law and Palmisano & Associates. (Doc. 30 and Doc. 32).

Plaintiff now moves for summary judgment on its claims against Defendants Palmisano & Associates, P.C. and Palmisano Law PLLC. (Doc. 48 at 1). Plaintiff specifically requests that the Court enter judgment in its favor on its breach of contract claim or, in the alternative, on its unjust enrichment claim. (Doc. 48 at 12). Defendants claim that there are disputed issues of material fact preventing summary judgment in Plaintiff's favor.

II. LEGAL STANDARD

Summary judgment is appropriate when " the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). " A party asserting that a fact cannot be or is genuinely disputed must support that assertion by . . . citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits, or declarations, stipulations . . . admissions, interrogatory answers, or other materials," or by " showing that materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Id. at

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56(c)(1)(A)& (B). Thus, summary judgment is mandated " against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

Initially, the movant bears the burden of pointing out to the Court the basis for the motion and the elements of the causes of action upon which the non-movant will be unable to establish a genuine issue of material fact. Id. at 323. The burden then shifts to the non-movant to establish the existence of material fact. Id. The non-movant " must do more than simply show that there is some metaphysical doubt as to the material facts" by " com[ing] forward with 'specific facts showing that there is a genuine issue for trial.'" Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (quoting Fed.R.Civ.P. 56(e) (1963) (amended 2010)). A dispute about a fact is " genuine" if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In the summary judgment context, the Court construes all disputed facts in the light most favorable to the nonmoving party. Ellison v. Robertson, 357 F.3d 1072, 1075 (9th Cir. 2004).

III. ANALYSIS

A. The Existence of a Contract

Plaintiff first argues that it is entitled to summary judgment on its breach of contract claim. To succeed on its breach of contract claim, Plaintiff must prove " the existence of a contract, breach of contract, and resulting damages." Chartone, Inc. v. Bernini, 207 Ariz. 162, 83 P.3d 1103, 1111 (Ariz. Ct. App. 2004) (internal citation omitted).

Plaintiff argues that it is entitled to summary judgment on its breach of contract claim because there were contracts (the April 20, 2007, September 28, 2007, December 14, 2007, and July 22, 2008 Applications for Directory Advertising and the December 3, 2008 Advertising Agreement); Plaintiff performed all its obligations under the contracts, including publishing the advertisements; Defendants breached their obligations under the contracts by failing to pay the amount due for the advertising; and Plaintiff has been damaged in the amount of $187,068.00 plus interest.

Defendants argue that Palmisano & Associates did not breach any contract because no contract was ever formed and, if a contract was formed, Plaintiff breached the contract. Defendants further argue that, if there was a breach of contract, only Palmisano & Associates is liable for such breach. The Court will first consider whether valid contracts were formed between Plaintiff and Palmisano & Associates and whether Defendants have raised any viable defenses to a breach of contract claim.

1. Whether the Terms and Conditions were Incorporated into the Contract

Defendants claim they are not bound by the terms and conditions of ...


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