United States District Court, D. Oregon
Katherine R. Heekin and Diana Fedoroff, THE HEEKIN LAW FIRM, 808 SW Third Avenue, Suite 540, Portland, OR 97204. Of Attorneys for Plaintiff.
Jonathan M. Radmacher, McEWEN GISVOLD LLP, 1100 SW Sixth Avenue, Suite 1600, Portland, OR 97204. Of Attorneys for Defendant.
OPINION AND ORDER
MICHAEL H. SIMON, District Judge.
Plaintiff Web Analytics Demystified, Inc. ("Demystified") brings a claim for breach of contract and, in the alternative, a claim for quantum meruit against Defendant Keystone Solutions, LLC ("Keystone"). Keystone brings two counterclaims for breach of contract and breach of the implied duty of good faith and fair dealing. Demystified seeks summary judgment in its favor on both of its claims and against Keystone on both of Keystone's counterclaims. For the reasons below, Demystified's motion is granted in part and denied in part.
A party is entitled to summary judgment if 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). The moving party has the burden of establishing the absence of a genuine dispute of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The court must view the evidence in the light most favorable to the non-movant and draw all reasonable inferences in the non-movant's favor. Clicks Billiards Inc. v. Sixshooters Inc., 251 F.3d 1252, 1257 (9th Cir. 2001). Although "[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge, " the "mere existence of a scintilla of evidence in support of the [non-movant's] position [is] insufficient" to avoid summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 255 (1986). "Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citation and quotation marks omitted).
Demystified and Keystone are both web consulting firms. Matthew Gellis is the manager and sole member of Keystone; Eric Peterson is the founder and senior partner of Demystified. The two firms specialize in different aspects of website analysis, but with some overlap. In January 2010, the two firms entered into the first of two agreements to refer clients to one another in return for a commission. The 2010 agreement was symmetric: both parties could make compensable referrals and both parties would be compensated on equal terms. It was also nonexclusive: both parties were permitted to refer clients to third parties. Further, neither party was obligated to make referrals at all.
By November 2010, the possibility of a merger was on the horizon, and Peterson and Gellis began negotiating a new agreement that would more tightly couple the two firms. This agreement was signed in January 2011 and is the contract at issue in this case. Dkt. 41-1 (hereinafter the "Contract").
The Contract differed from the 2010 agreement in two key regards. First, it provided for exclusivity: within each other's respective areas of expertise, the parties agreed to refer clients only to each other and not to any third parties. It expressly continued, however, to provide that neither party was obligated to make referrals. Second, the Contract introduced an asymmetry: it provided that Keystone would pay Demystified a percentage of its yearly revenue in exchange for "marketing support" from Demystified. The parties called this the "brand payment."
What constituted "marketing support" was not defined in the Contract. In 2011, however, Demystified wrote six blog posts promoting Keystone and invited Keystone representatives to a conference Demystified hosted in San Francisco. In early 2012, Keystone paid Demystified $78, 922 as a brand payment for marketing support in 2011. In 2012, Demystified invited Keystone representatives to two more conferences as well as six social-networking events.
According to its terms, the Contract expired on July 11, 2012-but several provisions, including the payment obligation, survived. The parties discussed continuing to operate under all of the terms of the Contract while they negotiated its formal renewal, but whether such an agreement was reached is disputed. In any case, by the end of 2012, it became clear that the parties could not reach a new agreement. On December 10, 2012, Demystified notified Keystone that it was terminating the Contract.
At some point in 2012, both Keystone and Demystified stopped paying commissions on referrals, but the record is devoid of evidence as to when that occurred. It is undisputed, however, that the brand payment for 2012 was due on January 31, 2013, and that Keystone did not pay it.
Demystified seeks summary judgment on its claim for breach of contract on two grounds: first, that Keystone failed to pay referral commissions, and second, that Keystone failed to pay the 2012 brand payment. In the alternative, Demystified seeks summary judgment on its quantum meruit claim for services rendered. Demystified also seeks summary judgment against Keystone's counterclaims.
A. Breach of Contract
For a contract to be breached, there must first exist a valid contract. It is undisputed that the Contract existed, was valid, and was in effect until at least July 11, 2012. Viewing the evidence in the light most favorable to Keystone, there was no agreement to continue operating under the terms of the Contract beyond that point. Thus, for purposes of summary judgment, the Contract terminated on July 11, 2012. Section 10(b) of the Contract, however, expressly provides that section 3, the payment obligation, ...