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Ormrod v. Hubbard Broadcasting, Inc.

United States District Court, D. New Mexico

August 6, 2018

DANIEL ORMROD, Plaintiff,
v.
HUBBARD BROADCASTING, INC., d/b/a KOB 4 and KOB-TV, LLC, Defendants.

          Sam Bregman The Bregman Law Firm, P.C. Attorneys for the Plaintiff

          Zachary R. Cormier Geoffrey D. Rieder Keleher & McLeod, P.A. and Meghan Dimond Stanford Jackson Loman Stanford & Downey, P.C. and Travis G. Jackson Foster, Rieder & Jackson, P.C. Attorneys for Defendant Hubbard Broadcasting, Inc.

          Patrick J. Rogers Patrick J. Rogers, L.L.C. and Zachary R. Cormier Geoffrey D. Rieder Keleher & McLeod, P.A. and Gregg D. Thomas Jon M. Philipson Thomas & LoCicero P.L. Tampa, Florida Attorneys for Defendant KOB-TV, LLC

          MEMORANDUM OPINION AND ORDER

         THIS MATTER comes before the Court on the Motion to Dismiss Defendant KOB-TV, LLC's Counterclaim for Promissory Estoppel and Breach of Contract, filed May 21, 2018 (Doc. 77)(“Motion”). The Court held a hearing on June 28, 2018. The primary issues are: (i) whether Plaintiff Daniel Ormrod's demand that, if Defendant KOB-TV, LLC (“KOB 4”) did not remove an allegedly defamatory news article from its website, then Ormrod would sue gave rise to a contractual obligation not to sue KOB 4; and (ii) whether the same demand also gave rise -- under the promissory estoppel doctrine -- to an enforceable promise not to sue KOB 4. The Court concludes that: (i) Ormrod's demand did not create a contract, so he did not incur a contractual obligation not to sue KOB 4; and (ii) Ormrod's demand was not a promise, so no legally enforceable promise not to sue exists. Accordingly, the Court will grant the Motion.

         FACTUAL BACKGROUND

         The Court draws its facts from KOB-TV, LLC's Answer, Defenses, and Counterclaim ¶¶ 1-29, at 8-13, filed April 30, 2018 (Doc. 66)(“Counterclaim”). The Court accepts KOB 4's factual allegations as true for the limited purpose of deciding the Motion. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)(clarifying the “tenet that a court must accept as true all of the [factual] allegations contained in a complaint”)(alteration added)(citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)); Archuleta v. Wagner, 523 F.3d 1278, 1283 (10th Cir. 2008)(concluding that a court must “accept as true all well-pleaded facts, as distinguished from conclusory allegations” when deciding a motion to dismiss).

         KOB 4 is a Delaware limited liability company whose sole member is Hubbard Broadcasting, Inc., a Minnesota corporation with its principal place of business in Minnesota. See Counterclaim ¶ 1, at 8. Ormrod is a citizen of New Mexico. See Counterclaim ¶ 2, at 8. The amount in controversy in this case exceeds $75, 000.00. See Counterclaim ¶ 4, at 9.

         On May 12, 2016, KOB 4 learned of a child abuse allegation involving Ormrod, a teacher at Dennis Chavez Elementary School in Albuquerque, New Mexico. See Counterclaim ¶ 6, at 9. Specifically, KOB 4 received a police report describing “the alleged completed commission of felony child abuse by Ormrod.” Counterclaim ¶ 7, at 9. Allegedly, Ormrod grabbed a student's arm, leaving multiple bruises. See Counterclaim ¶ 8, at 9. KOB 4 published an online news article saying that Ormrod had been charged with felony child abuse. See Counterclaim ¶¶ 7, 9, at 9-10.

         At approximately 3:56 p.m., Ormrod's attorney, Sam Bregman, called KOB 4, and said that he represented Ormrod and that Ormrod had not been charged. See Counterclaim ¶ 12, at 10. Bregman said that if KOB 4 did not remove the article, he would sue. See Counterclaim ¶ 12, at 10. After confirming with an Albuquerque Public Schools employee that Ormrod had not been charged, KOB 4 “at approximately 4:02 PM . . . updated the article to remove the ‘charged' language, and at approximately 4:08 PM . . . removed Ormrod's name from the article.” Counterclaim ¶ 14, at 11. KOB 4 also added an editor's note stating “‘[t]he name of the teacher being investigated has been removed as he does not currently face charges. APS has since clarified that there is only an investigation at this point. A letter home to parents named the teacher involved.'” Counterclaim ¶ 14, at 11 (quoting Article at 3, filed April 30, 2018 (Doc. 66-6)). Ormrod subsequently sued KOB 4. See Counterclaim ¶ 15, at 11.

         PROCEDURAL BACKGROUND

         Ormrod alleges a single count of defamation against KOB 4. See Amended Complaint for Defamation ¶¶ 22-30, at 3-4, filed March 20, 2018 (Doc. 42). KOB 4 later filed two counterclaims against Ormrod, alleging one count of promissory estoppel and one count of breach of contract. See Counterclaim ¶¶ 16-29, at 11-13. Ormrod subsequently filed the Motion. See Motion at 1.

         1. The Motion.

         Ormrod moves the Court to dismiss the two counterclaims. See Motion at 1. Ormrod first argues that KOB 4 “does not state that Plaintiff explicitly stated he would not file a lawsuit even if the defamatory story was taken down.” Motion at 3. According to Ormrod, “[i]t is not uncommon for an attorney, representing a client, to make a demand upon an opposing party to cease and desist from a certain action. The demand described under the auspices of [KOB 4's] counterclaim is insufficient to establish a contract.” Motion at 3. He also contends that KOB 4 has not stated a claim for breach of contract, “because it does not state there was any sufficient consideration to establish a contract or the specificity required under Hansen v. Ford Motor Co., ” 1995-NMSC-044, 900 P.2d 952. Motion at 4.

         Ormrod then asserts that KOB 4 has not pled facts sufficient to satisfy promissory estoppel's elements. See Motion at 3-4 (citing Eavenson v. Lewis Means, Inc., 1986-NMSC-097, 730 P.2d 464). Finally, Ormrod contends that the Counterclaim “fails to state whether the individual who spoke to Plaintiff's counsel possessed the legal authority to enter into a settlement and release agreement on its behalf.” Motion at 4. Ormrod concludes that the Court should grant the Motion. See Motion at 4.

         2. The Response.

         KOB 4 responds to the Motion. See KOB-TV, LLC's Response to Plaintiff Daniel Ormrod's Motion to Dismiss Defendant KOB-TV, LLC's Counterclaim for Promissory Estoppel and Breach of Contract, filed June 4, 2018 (Doc. 81)(“Response”). KOB 4 first contends that it has sufficiently pled a claim for breach of a unilateral contract. See Response at 5. According to KOB 4, a unilateral contract exists between itself and Ormrod, because Ormrod made an offer not to sue KOB 4 in exchange for KOB 4 removing from its website the news article, and KOB 4 accepted Ormrod's offer by removing the relevant language. See Response at 6. KOB 4 adds that “an agreement to forebear suit is sufficient consideration in a unilateral contract.” Response at 8.

         KOB 4 next argues that Ormrod breached the parties' alleged contract. See Response at 10. According to KOB 4, “despite accepting Ormrod's offer by removing the ‘charged' language, Ormrod has proceeded to sue KOB-TV, causing KOB-TV unnecessary harm.” Response at 11. According to KOB 4, “Ormrod had a duty not to sue KOB-TV. However, Ormrod breached his contractual obligation by filing his lawsuit against KOB-TV.” Response at 11.

         KOB 4 then contends that Ormrod's breach of the parties' alleged contract caused KOB 4 damages. See Response at 11. According to KOB 4, “but for Ormrod filing his suit against KOB-TV, KOB-TV would not be damaged.” Response at 11. Further, according to KOB 4, “as a result of Ormrod's breach, KOB-TV has suffered damages, including but not limited to, the attorneys' fees and costs of defending against the suit by Ormrod.” Response at 12. KOB 4 concludes that it has properly pled a breach of contract claim. See Response at 12.

         Turning to its promissory estoppel claim, KOB 4 asserts that it has properly pled all of that claim's elements. See Response at 12. First, KOB 4 avers that Ormrod made a promise inducing an action by promising not to sue if KOB 4 removed language from its news article. See Response at 14. According to KOB 4, “induced by that promise, KOB-TV took the action of removing the language . . . from the news article.” Response at 15. Second, KOB 4 contends that it reasonably relied on Ormrod's promise. See Response at 16. According to KOB 4, it “took the action of removing the language based on the promise by Ormrod and . . . the action was in direct response to Ormrod's promise not to sue if the language was removed.” Response at 16. Third, KOB 4 contends that it substantially changed its position by updating its news article and removing the “charged” language. Response at 17. Fourth, KOB 4 avers that it “has sufficiently pleaded foreseeability, noting that Mr. Bregman, on behalf of Ormrod, made a promise to induce KOB-TV to take a certain action.” Response at 17. Finally, KOB 4 contends that “the [e]nforcement of the promise is necessary to prevent injustice to KOB-TV, including its expense of its continued defense of Ormrod's lawsuit.” Response at 18. KOB 4 concludes that the Court should deny the Motion. See Response at 18.

         3. The Reply.

         Ormrod replies to the Response. See Plaintiff's Reply in Support of his Motion to Dismiss Defendant KOB-TV, LLC's Counterclaim for Promissory Estoppel and Breach of Contract, filed June 21, 2018 (Doc. 88)(“Reply”). Ormrod first contends that “the language plead by KOB in its Counterclaim falls short of creating a contract.” Reply at 1. According to Ormrod, “there is simply no legal precedent to support KOB's contention where a potentially defamed individual calls a newsroom complaining about an error in a story, convinces the news media entity to remove the story, then somehow claim[s] an unwritten contract was created to forego litigation.” Reply at 2. Ormrod continues that “there is nothing in the words plead[ed] in the counterclaim which explicitly state take down the false story and my client will not sue you if you do.” Reply at 3. According to Ormrod, KOB's characterization of his statement as a “‘promise not to sue' is simply self-serving commentary on the actual statement which KOB claims created the contract.” Reply at 3 (quoting Counterclaim ¶13, at 10).

         Ormrod next avers that KOB 4's promissory estoppel claim should fail, because “KOB does not plead anything in its counterclaim to substantiate a change in position.” Reply at 5. According to Ormrod, “all [KOB 4] appeared to do was remove the false claim that Plaintiff was charged with a felony. The story was not removed and [KOB 4] does not claim with any substance to have suffered a change in position by simply correcting a story.” Reply at 5. Ormrod concludes that the Court should dismiss KOB 4's counterclaims. See Reply at 6.

         4. The Hearing.

         The Court held a hearing on June 28, 2018. See Draft Transcript of Motion Hearing at 1:6-9 (taken June 28, 2018)(“Tr.”)(Court).[1] Ormrod first argued that the language “[r]emove from [KOB.com] within 10 minutes the article containing the statement that Ormrod had been charged or Ormrod would sue KOB-TV” does not create a contract. Tr. at 3:18-25 (Bregman). According to Ormrod, “I promised to them that I would sue them unless they did something. I didn't promise that I would never sue them.” Tr. at 3:25-4:3 (Bregman). Ormrod continued that “[n]owhere did they allege that I said . . . I promise not to sue you if you do this.” Tr. at 4:13-15 (Bregman).

         KOB 4 responded that Ormrod's words created a unilateral contract, because “[t]he language is important, it isn't take this down and I will sue you. It's take this down or I will sue you, ” Tr. at 9:6-8 (Rogers), and “what you're hearing now is, well, let's transform that [‘or'] into an ‘and, '” Tr. at 10:12-13 (Rogers). Ormrod replied that “there is no way that you can say positively to someone do something or I'm going to sue you and then say that that is somehow a ...


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