A party negotiating an agreement may employ leverage or “arm-twisting” to consummate a transaction. At some point, however, tough business tactics may result in a claim of duress, jeopardizing the validity of the agreement. In Cableview Communications of Jacksonville, Inc. v. Time Warner Cable Southeast, LLC, the Eleventh Circuit considered such a claim, ultimately finding in favor of the defendant and reaffirming that –under Florida law – duress cannot be predicated on “doing or threatening to do that which a party has a legal right to do.” Slip Op. 13.
In 2004, Cableview Communications of Jacksonville, Inc. (“Cableview”) entered into an installation agreement with Time Warner Cable Southeast, LLC, and Time Warner Entertainment (collectively, “Time Warner”). Cableview agreed to install and maintain Time Warner’s cables, which are attached to utility poles. In 2008, a Cableview employee sustained injuries when the utility pole he was working on collapsed. The employee sued the owner of the utility pole, Duke Energy Carolinas, LLC, who sought indemnity from Time Warner. Time Warner, in turn, tendered the claim to Cableview pursuant to an indemnity provision in the installation agreement. Cableview refused the claim, and Time Warner ultimately spent approximately $560,000 to defend and settle the injured worker’s suit.
During this same time, Cableview was negotiating to assign the installation agreement with Time Warner to FTS USA, LLC/Unitek Global Services, Inc. (“FTS”). Assignment of the installation agreement, however, required written consent from Time Warner, which Time Warner refused to give until its claim for indemnity was resolved. Ultimately, payment of the indemnity claim was worked into the agreement between Cableview and FTS. After paying Time Warner, Cableview filed suit to recoup these funds. Specifically, Cableview asserted claims of tortious interference with a business relationship, negligent misrepresentation, and violation of the Florida Deceptive and Unfair Trade Practices Act. Following discovery, the district court entered summary judgment in Time Warner’s favor, concluding Cableview had paid Time Warner pursuant to a valid settlement agreement.
On appeal, in an opinion authored by newly appointed Judge Elizabeth Branch, the Eleventh Circuit acknowledged the existence of disputed issues of fact but concluded that these facts were not material. Specifically, the court found that the evidence did not establish that Time Warner engaged in wrongful acts or threats in negotiating the settlement because it was merely exercising its lawful right to withhold consent to assignment of the installation agreement. Moreover, even assuming arguendo that Time Warner’s conduct was wrongful, the court held that Cableview failed to present evidence demonstrating it had “no alternative” to entering into the agreement, a prerequisite to a finding of duress under Florida law. Accordingly, the court affirmed summary judgment in Time Warner’s favor.
In a short dissent, Judge Anderson acknowledged that the case presented a “close” call but indicated his belief that material facts precluded summary judgment.
Posted by: John Sharpe