Opinion
ACTION NO. 4:01-CV-367-Y
June 25, 2003
ORDER PARTIALLY GRANTING MOTION FOR PARTIAL SUMMARY JUDGMENT
Pending before the Court is the Motion for Partial Summary Judgment filed by plaintiff Travelocity.Com LP ("Travelocity") on October 30, 2002. Defendant CGU Insurance Company ("CGU") filed a response in opposition to the motion on December 3, and Travelocity filed a reply to CGU's response on December 17. After consideration of the foregoing documents and the applicable law, the Court concludes that Travelocity's motion should be partially granted.
I. Facts
On March 22, 1999, Travelocity entered into a Procurement and Trafficking Agreement with third-party DoubleClick, Inc. ("Doubleclick"), under which DoubleClick agreed to act as Travelocity's agent to sell advertising on Travelocity's web site. On December 10, DoubleClick entered into a Sponsorship Agreement with CGU, under which Travelocity's web site would display advertisements for CGU's travel-protection insurance and provide links to a CGU-affiliated web site where customers could purchase that insurance. In return, CGU agreed to pay fixed monthly fees under a formula established in the agreement.
In April 2000, Travelocity and DoubleClick ended their relationship under the Procurement and Trafficking Agreement, and Travelocity began to handle its advertising accounts in-house. On April 4, 2000, representatives from Travelocity and DoubleClick met with representatives from CGU to discuss the transfer of the CGU account from DoubleClick directly to Travelocity. After this meeting, Travelocity and CGU began to deal directly with each other regarding advertising on Travelocity's web site, although a formal, written assignment of the Sponsorship Agreement was never executed. CGU paid Travelocity directly for Travelocity's services until September 2000, and CGU continued to accept advertisements and links from Travelocity through March 2001. CGU terminated the parties' relationship, however, by letter dated February 1, 2001.
Travelocity filed this suit for breach of contract and unjust enrichment, seeking to recover damages as a result of CGU's failure to pay the amounts required under the Sponsorship Agreement. Travelocity contends that under the agreement, CGU owes it $2,874,331, plus interest and attorney's fees. CGU filed an answer and counterclaim, asserting that Travelocity breached the parties' contract by failing to perform its obligations under the contract. Travelocity now seeks a summary judgment.
II. Summary Judgment Standard
Summary judgment is appropriate when the record establishes "that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." FED. R. CIV. P. 56(c). The party moving for summary judgment has the initial burden of demonstrating that it is entitled to a summary judgment. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Where, as here, the moving party bears the burden of proof on the claim upon which it seeks summary judgment, it must present evidence that establishes "beyond peradventure all the essential elements of the claim or defense." Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986). When the moving party has carried its summary judgment burden, the nonmovant must go beyond the pleadings and by its own affidavits or by the depositions, answers to interrogatories, or admissions on file set forth specific facts showing that there is a genuine issue for trial. FED. R. CIV. P. 56(e).
In making its determination on the motion, the Court must look at the full record in the case. FED. R. CIV. P. 56(c); see Williams v. Adams, 836 F.2d 958, 961 (5th Cir. 1988). Nevertheless, Rule 56 "does not impose on the district court a duty to sift through the record in search of evidence to support a party's opposition to summary judgment." Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 915-16 n. 7 (5th Cir.), cert. denied, 506 U.S. 825 (1992). Instead, parties should "identify specific evidence in the record, and . . . articulate the `precise manner' in which that evidence support[s] their claim." Forsyth v. Barr, 19 F.3d 1527, 1536 (5th Cir. 1994).
III. Analysis
A. Assignment of the Sponsorship Agreement
Travelocity contends that after it terminated DoubleClick, Travelocity stepped into DoubleClick's shoes under the Sponsorship Agreement. CGU disputes this, contending that the agreement was never formally assigned from DoubleClick to Travelocity. The Court concludes that despite the fact that a formal written assignment of the contract was never executed, CGU's conduct renders it bound to the Sponsorship Agreement's terms.
The evidence demonstrates that although there was no written assignment of the Sponsorship Agreement, the parties continued to operate as if the agreement were in full force and effect, with Travelocity assuming DoubleClick's role under the agreement. CGU did not voice any objections to the transfer at the April 4, 2000, meeting, nor did it raise any such objections for several months after that meeting. In fact, it appears that CGU's and Travelocity's representatives had numerous communications during the months following the April 2000 meeting regarding the parties' performance under the Sponsorship Agreement, including negotiations as to how to correctly calculate the amount of money CGU owed Travelocity under that agreement. As a result, because CGU failed to raise a timely objection to Travelocity's assumption of DoubleClick's role under the agreement and instead operated under the agreement for months after Travelocity assumed DoubleClick's role, the Court concludes that CGU is bound to the terms of the agreement.
As aptly noted in Travelocity's brief, CGU is bound to
the terms of the Sponsorship Agreement under numerous legal theories including: (1) general principles of contract law based upon CGU's acceptance of and consent to Travelocity's assumption of the Sponsorship Agreement, see e.g., Twelve Oaks Tower, Ltd. v. Premier Allergy, Inc., 938 S.W.2d 102, 110 (Tex.App.-Houston [14th Dist.] 1996, no writ); Rapid Transit Lines, Inc. v. Transit Aids, Inc., 401 S.W.2d 276, 284 (Tex.Civ.App.-Eastland 1966, no writ); Spengler v. Pitluk, 261 S.W.2d 470, 471-72 (Tex.Civ.App.-San Antonio 1953, writ dism'd); (2) estoppel and/or quasi-estoppel to challenge the substitution of Travelocity for DoubleClick based upon CGU's continued acceptance of benefits (i.e. advertisements and links) under the Sponsorship Agreement, see, e.g., Twelve Oaks Tower, Ltd., 938 S.W.2d at 111; and (3) waiver of any defects in the substitution of Travelocity for DoubleClick based upon the parties ['] continuing to proceed under the terms of the Sponsorship Agreement without raising a timely objection, see, e.g., Abraxas Petroleum Corp. v. Hornburg, 20 S.W.2d 741, 749-52 (Tex.App.-El Paso 2000, no pet.); Twelve Oaks Tower, Ltd., 938 S.W.2d at 113, Tenneco Inc. v. Enterprise Product Co., 925 S.W.2d 640, 643-44 (Tex. 1996); Marriott Corp. v. Azar, 697 S.W.2d 60, 65 (Tex.App.-El Paso 1985, writ ref'd n.r.e.).
(Pl.'s Br. at 7, n. 35.) CGU wholly fails to address these authorities in its response.
CGU contends that "the numerous complaints voiced by CGU" reflect CGU's objection to "continuing to do business under the terms of the Sponsorship Agreement." (Def.'s Resp. Br. at 4, ¶ 12.) The complaints GU lists, however, do not reflect that it voiced any objection to Travelocity's assuming DoubleClick's role under the agreement. Instead, CGU's alleged complaints further evidence the fact that CGU intended to remain bound by the Sponsorship Agreement, given that at least some of the complaints concern the adequacy of Travelocity's performance under that agreement. CGU has not presented any evidence tending to demonstrate that it voiced objections to the transfer of parties, as opposed to the parties' performance, under the Sponsorship Agreement. Consequently, the Court concludes that CGU has failed to demonstrate a genuine issue of material fact regarding whether it accepted the transfer of parties under the Sponsorship Agreement from DoubleClick to Travelocity.
B. Breach of the Sponsorship Agreement
Travelocity next contends that it is entitled to summary judgment on its breach-of-contract claim because CGU's only affirmative defense, failure of consideration, lacks merit. It appears to the Court, however, that Travelocity has put the cart before the horse. Travelocity carries the burden of proof on its breach-of-contract claim; as a result, to be entitled to summary judgment, it must present evidence demonstrating that it can prove "beyond peradventure all of the essential elements of th[at] claim." Fontenot, 780 F.2d at 1194. "The elements of a breach of contract claim are: (1)the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages to the plaintiff resulting from that breach." Wright v. Christian Smith, 950 S.W.2d 411, 412 (Tex.App.-Houston [1st Dist.] 1997, no pet.). The Court concludes the Travelocity has failed to sufficiently carry its burden as to the second element — performance — to warrant a summary judgment.
Regarding Travelocity's performance under the contract, Travelocity's brief alleges as follows: "Travelocity and DoubleClick began to perform their obligations under the Sponsorship Agreement. CGU received advertisements and links on the Travelocity [w]ebsite under the terms of the Sponsorship Agreement, and for several months CGU even paid for the services provided.14" (Pl.'s Br. at 3.) The only evidence cited in Travelocity's footnote fourteen is testimony regarding CGU's payments. No evidence is cited that supports Travelocity's contention that it performed its obligations under the Sponsorship Agreement.
Later in its brief, Travelocity contends that "[t]he undisputed facts show that CGU received millions of advertisements and links to its web site from Travelocity." (Pl.'s Br. at 8.) The evidence Travelocity cites in footnote forty-one does not, however, sufficiently demonstrate that Travelocity performed its obligations under the Sponsorship Agreement so as to warrant a summary judgment in Travelocity's favor. The evidence cited supports the proposition that Travelocity delivered numerous "`impressions" to CGU. After reviewing the Sponsorship Agreement, however, it does not appear to the Court that Travelocity's sole obligation under the agreement was to provide a certain volume of impressions; rather, the contract also requires that the CGU advertisements and links be placed in certain areas of Travelocity's web site. The Sponsorship Agreement is fairly specific regarding exactly where CGU's advertising was to appear within Travelocity's web site.fn4 Travelocity has failed to demonstrate that it complied with these provisions of the parties' agreement, nor has it shown that it is entitled to judgment on its breach-of-contract claim without making such a showing. Consequently, the Court concludes that Travelocity has failed to adequately demonstrate its performance under the contract for purposes of obtaining a summary judgment on its breach-of-contract claim.
Specifically, the agreement provides as follows: CGU shall have the right to the following Advertising units through the Term at the frequencies . . . set forth in Appendix 2a and 2b . . . :
(i) A Badge (120x60 pixels, 4k) on the Home Page of the Travelocity Web Site.
(ii) Text message and CGU URL on confirmation e-mails sent by Sabre.
(iii) Text message and CGU URL on the "Travelers' Check" newsletter.
(iv) A Tex Link for "Trip Protection" on the Home Page of the Travelocity Web Site,
(v) A rotating Badge (120x60 pixels, 4k), the majority of whose impressions will be on the "Vacation Cruises" and "Destination Guide" Pages of the Travelocity Web Site,
(vi) Rotating Banners (468x60 pixels, 12k) on the reservation/booking Pages of the Travelocity Web Site.
(vii) A Badge or text message (size and position to be determined) on the "Last Page" of the Travelocity Web Site.
(viii) An e-mail to Travelocity Web Site registered users which includes the announcement of the partnership between CGU and [Travelocity].
(ix) No later than May 16, 2000, a text message and/or Badge position (size to be determined) on the confirmation page of the Travelocity Web Site.
(Pl.'s App. at 28.)
"Impression" is defined in the Sponsorship Agreement "as occurring each time a[n] Advertisement appears on a Page, resulting from a user accessing or visiting such Page." (Pl.'s App. at 34.)
Indeed, the evidence cited by Travelocity in footnote forty-one supports the Court's conclusion that the number of impressions was not Travelocity's only obligation under the contract. Paul Nelson testified that the Sponsorship Agreement also dictated where the impressions were to appear on Travelocity's web site:
Q. And are impressions simply counted by the number, or are they also counted by where those impressions appear in a web site?
A. It was actually both. There were certain positions that they were going to be positioned in, and then there was a run of site impressions as well.
(Pl.'s App. at 155.)
III. Conclusion
For the foregoing reasons, Travelocity's Motion for Partial Summary Judgment [document number 60] is hereby PARTIALLY GRANTED, in that Travelocity is entitled to summary judgment to the extent CGU contends it is not bound to the Sponsorship Agreement because a formal, written assignment of the contract from DoubleClick to Travelocity was never executed; rather, the evidence demonstrates that CGU is bound to the agreement by its own conduct. Nevertheless, the motion is denied to the extent Travelocity seeks a summary judgment that CGU has breached the Sponsorship Agreement.