Opinion
4:04cv3001.
September 24, 2004
MEMORANDUM AND ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT
On January 1, 2004, the plaintiff, L.M. Berry and Co. (Berry), filed a complaint against the defendants, ALLTEL Communications Inc. and ALLTEL Communications Holdings of the Midwest, Inc. (collectively "ALLTEL"), seeking a declaratory judgment that,inter alia, its directory publishing agreement with ALLTEL will not be breached if Berry publishes a directory of Lincoln, Nebraska, telephone numbers in 2005. (See generally Compl., filing 1.) Now before me are the cross motions for summary judgment filed by Berry and ALLTEL. (See Pl.'s Mot. for Summ. J., filing 21; Defs.' Mot. for Summ. J., filing 26.) For the following reasons, I find that Berry's motion for summary judgment must be granted.
I. BACKGROUND
Berry "offers and provides to telephone companies a complete line of telephone directory services, including Yellow Pages advertising, sales, marketing, graphics, printing, publication, delivery, and distribution services." (See filing 25, Stipulation in Supp. of Cross-Mots. for Summ. J. (hereinafter "Stipulation"), ¶ 6.) On or about September 14, 1994, Berry entered into an agreement with The Lincoln Telephone Telegraph Company (LTT) to sell advertizing for and compile, produce, print, publish, and deliver six telephone directories, including one for the city of Lincoln, Nebraska. (See id. ¶¶ 7, 9.) The 1994 agreement states at paragraph 3,
The term of this Agreement shall be for a period of five (5) years encompassing the publication of five annual issues of each of the following Lincoln Telephone Directories: Wahoo, Lincoln, Nebraska City, York, Beatrice and Hastings, as more specifically provided in paragraph 1.A. hereinabove.
(Filing 25, Ex. A at LMB008.) Paragraph 1.A. states, in turn, as follows:
This Agreement states the general terms and conditions which shall govern the rights and duties of the parties in respect to the publication of the following telephone directories:Directory Initial Publication Final Publication
Wahoo October 1995 October 1999 Lincoln December 1995 December 1999 Nebraska City February 1996 February 2000 York April 1996 April 2000 Beatrice June 1996 June 2000 Hastings August 1996 August 2000
(the "Lincoln Telephone Directories"); and related services as hereinafter more fully described.
(Filing 25, Ex. A at LMB004.) The 1994 agreement also contains the following "competition and solicitation" provision:
During the term of this Agreement and for a period of one (1) year thereafter, Berry shall be prohibited from publishing any telephone directories primarily distributed in the exchange areas covered by the Lincoln Telephone Directories which are the subject of this Agreement. In no event shall Berry use Lincoln subscriber information provided to Berry pursuant to this Agreement.
During the term of this Agreement and for a one (1) year period thereafter, the parties agree not to solicit or accept for employment one another's management employees absent prior written consent.
(Filing 25, Ex. A at LMB009.)
In 1998, Berry and Aliant Communications Company (Aliant), which was LTT's successor in interest, agreed to extend the term of the 1994 agreement. (See filing 25, Stipulation ¶¶ 3, 12.) The 1998 agreement states,
The term of the [Directory Publishing Agreement] shall be extended for an additional four (4) years encompassing four (4) additional directory issues of the Aliant Directories: Wahoo, Lincoln, Nebraska City, York, Beatrice and Hastings therefore expiring, upon completion of the final issue of each directory as identified below:
Wahoo October, 2003 Lincoln December, 2003 Nebraska City February, 2004 York April, 2004 Beatrice June, 2004 Hastings August, 2004
(Filing 25, Ex. B at LMB031.) The 1998 agreement also states that "the parties . . . ratify the unchanged terms and conditions of the September 14, 1994[,] Directory Service Agreement." (See id. at LM032.) It appears that the "competition and solicitation" provision was not altered by the 1998 agreement.
ALLTEL is the successor in interest to Alliant. (See filing 25, Stipulation ¶ 3.) In a letter dated February 7, 2003, ALLTEL informed Berry that the directory publishing agreement would not be extended "beyond the current term." (See filing 25, Ex. C at LMB038.) ALLTEL's letter states, "Final directories to be published by The Berry Company are as follows . . . Lincoln 12/03. . . ." (Id.)
In a letter dated September 15, 2003, Berry replied to ALLTEL, confirming that the final Lincoln directory would be published in December 2003. (See filing 25, Ex. D at LMB039.) Berry's letter also states,
This letter is to advise you that, in accordance with Section 5 of the Directory Publishing Agreement, L.M. Berry and Company will not publish any telephone directory intended primarily for distribution in any exchange area covered by each identified directory for a period of one (1) year following publication of that directory. Upon expiration of that one-year period, L.M. Berry and Company is permitted to publish or have published a telephone directory for such exchanges. Accordingly, L.M. Berry and Company intends to publish a Lincoln directory for initial distribution no earlier than December, 2004.
We appreciate the opportunity to serve ALLTEL and look forward to doing so through completion of the final issue of each directory.
(Filing 25, Ex. D. at LMB039.)
Berry then began taking steps to "facilitate" publication of a 2005 telephone directory for Lincoln, Nebraska. (See filing 25, Stipulation ¶ 15.) For example, Berry prepared introductory marketing materials for the solicitation of advertisers, and in November 2003 Berry "acquired the necessary Directory Code Number from the Yellow Pages Integrated Media Association." (Id.)
In a letter dated December 13, 2003, ALLTEL informed Berry that if "Berry does proceed to solicit advertising for a new Lincoln directory prior to January 2005, or publish a new Lincoln directory prior to January 2006, it will be in beach of the agreement." (Filing 25, Ex. E at LMB041.) Berry then filed the instant action, seeking a declaration that a) it has not violated its agreements with ALLTEL by preparing to publish a 2005 telephone directory for Lincoln, and b) its publication of this directory will not violate these agreements. (See Compl., filing 1, ¶¶ 35-39.)
II. STANDARD OF REVIEW
A motion for summary judgment shall be granted by the court when "there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). A "material" fact is one "that might affect the outcome of the suit under the governing law. . . ."Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A genuine issue of material fact exists when there is sufficient evidence favoring the party opposing the motion for a jury to return a verdict for that party. Id. In determining whether a genuine issue of material fact exists, the evidence is to be taken in the light most favorable to the nonmoving party.Adickes v. S.H. Kress Co., 398 U.S. 144, 157 (1970). If the moving party meets the initial burden of establishing the nonexistence of a genuine issue, then the burden shifts to the nonmoving party to produce evidence of the existence of a genuine issue for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). The nonmoving party "must present affirmative evidence in order to defeat a properly supported motion for summary judgment," Anderson, 477 U.S. at 257, and "may not rest upon mere allegation or denials of his pleading, but must set forth specific facts showing that there is a genuine issue for trial,"id. at 256 (citing Federal Rule of Civil Procedure 56(e)).
"[T]he filing of cross motions for summary judgment does not necessarily indicate that there is no dispute as to a material fact, or have the effect of submitting the cause to a plenary determination on the merits." Wermager v. Cormorant Township Board, 716 F.2d 1211, 1214 (8th Cir. 1983) (citations omitted). If the materials submitted by the parties support conflicting inferences with respect to any material fact, summary judgment is not appropriate. See id.
III. ANALYSIS A. Berry's Motion for Summary Judgment
Berry's arguments in support of its motion for summary judgment address three separate issues: 1) whether the term of the 1994 agreement, as extended in 1998, expired in December 2003, such that the one-year limitation on competition began to run on that date; 2) whether the actions Berry has taken or is taking to prepare for its 2005 publication of a Lincoln telephone directory violate the agreement's non-competition provision; and 3) whether the non-competition provision is contrary to public policy, and is therefore void. (See filing 24, Pl.'s Br. in Supp. of Mot. for Summ. J. (Pl.'s Br.) at 7-15.) The resolution of these three issues hinges upon the meaning of the terms "publication" and "publishing" as they are used in the portions of the agreement that have been quoted above. These terms are not defined in the agreement; thus, I shall begin by analyzing the parties' arguments concerning the definitions of "publication" and "publishing."Both parties argue that the terms of the contract are not ambiguous. (See filing 24, Pl.'s Br. at 8; filing 32, Defs.' Br. in Opp'n to Pl.'s Mot. for Summ. J. (Defs.' Response Br.) at 4. See also filing 27, Defs.' Br. in Supp. of Mot. for Summ. J. (Defs.' Br.) at 6 ("Here, the 1994 Agreement is unambiguous. . . .").) However, each claims that the term "publication" has a different meaning. Berry argues, inter alia, that the word "publish" refers to the "act or process of bringing out printed material for distribution to the public," and the noun "publication" refers to "the thing that is published." (Filing 24, Pl.'s Br. at 10 (citing Webster's Third New International Dictonary 1201, 1836-37 (2002)).) ALLTEL responds that the act of "publishing" entails more than simply printing and distributing a directory, but also includes activities such as soliciting advertisers, providing advertising sales, providing customer service, and collecting advertising revenues. (See filing 32, Defs.' Response Br. at 4-5.)
"A contract is ambiguous when a word, phrase, or provision in the contract has, or is susceptible of, at least two reasonable but conflicting interpretations or meanings." Jensen v. Board of Regents of the University of Nebraska, 684 N.W.2d 537, 543 (Neb. 2004). "When the terms of a contract are clear, a court may not resort to rules of construction, and terms are accorded their plain and ordinary meaning as an ordinary or reasonable person would understand them." Misle v. HJA, Inc., 674 N.W.2d 257, 264 (Neb. 2004). "Whether a contract is ambiguous is a question of law, . . . as is the construction of a contract. . . ." Rains v. Becton, Dickinson Co., 523 N.W.2d 506, 509 (Neb. 1994).
My dictionary, which is Webster's Third New International Dictionary (1969), includes the following definition of "publication" at page 1836: "the act or process of issuing copies (as of a book . . .) for general distribution to the public." Among the several definitions given for the verb "publish," I find, "to produce for publication or allow to be issued for distribution or sale," and "to reproduce for public consumption."Id. at 1837. I conclude that the ordinary meaning of the terms "publication" and "publishing," as they appear in the relevant portions of the contract, are well-expressed by the foregoing definitions. I note too that acts such as the solicitation of advertisers and the collection of revenues are not included within these definitions.
ALLTEL derives its definition of the relevant terms not from a dictionary, but from their use in various contexts. This strategy is not problematic in and of itself, for the meaning of a term often depends upon its context. Indeed, I found it necessary to consider the context when selecting appropriate definitions of "publication" and "publishing" from my dictionary. However, it seems to me that a definition of these terms that includes "advertising sales," "customer service," and the like does not emerge from the contexts in which the terms are used in the agreement. The first provision cited by ALLTEL, which is found at paragraph 1.F. of the 1994 agreement, states,
Berry, as directory publisher, shall provide advertising sales and marketing, customer service, production, printing and delivery services for the Lincoln Telephone Directories issued during the term of this Agreement as well as billing and collecting foreign and national advertising revenues relating to such Directories.
(Filing 25, Ex. A at LMB005). This language plainly indicates that Berry is the "directory publisher," and that its contractual duties include providing services such as advertising sales, marketing, and revenue collection, along with production, printing, and delivery services. However, it does not follow that the terms "publication" and "publishing," which appear elsewhere in the agreement, mean advertising sales, marketing, or any other service listed in paragraph 1.F.
Next, ALLTEL refers me to paragraph 2.B.(3) of the 1994 agreement. This paragraph states,
B. As Lincoln's exclusive directory sales representative during the term of this Agreement, Berry agrees as follows:
. . . .
(3) To solicit potential advertisers in the Lincoln Telephone Directories in a processional and courteous manner subject to established sales and ethical guidelines.
(Filing 25, Ex. A at LMB006.) Again, this provision indicates that Berry is contractually obligated to solicit advertisers; however, this provision does not support ALLTEL's suggestion that the words "publishing" and "publication" plainly mean "soliciting advertisers."
Finally, ALLTEL cites paragraph six of the "Undisputed Facts" submitted by Berry. This paragraph states,
6. Berry offers and provides to telephone companies a complete line of telephone directory services, including Yellow Pages advertising, sales, marketing, graphics, printing, publication, delivery, and distribution services.
(Filing 24, Pl.'s Br. at 3-4.) This paragraph indicates that Berry provides a number of services, including advertising, marketing, and publication. It does not indicate that the terms "publication" and "publishing" mean advertising, marketing, and so forth.
In sum, ALLTEL's position is based upon the notion that since Berry is properly characterized as the "publisher" of the Lincoln directory, and since Berry has agreed to perform a "line" of telephone directory services, the meaning of "publication" or "publishing" includes the entire line of services that Berry agreed to provide. ALLTEL argues, "To `publish' the telephone directory and avoid breaching the Publishing Agreement, Berry was required to solicit advertisers, provide advertising sales, provide customer service and collect foreign and national advertising revenues related to publishing the directory." (Filing 32, Defs.' Response Br. at 4 (emphasis omitted).) This is true enough; however, it does not follow that the tasks listed by ALLTEL are synonymous with the task of "publication" or "publishing." In other words, although services such as "advertising sales" may be prerequisites to "the act . . . of issuing copies [of a telephone directory] . . . for general distribution to the public," I am not convinced that "the sale of advertisements" for a directory means "the publication" of a directory.
Moreover, it seems to me that ALLTEL's proposed definition of the words "publication" and "publishing" is inconsistent with the plain language of paragraph 1.A. of the 1994 agreement, which, according to paragraph 3, must be consulted to determine the duration of the agreement. Paragraph 1.A. states that the last "publication" of the Lincoln directory is to occur in December 1999. In this context it is apparent that the term "publication" refers not to the preliminary services that might be related to the production of the directory, but rather to "the act . . . of issuing copies . . . for general distribution to the public."Webster's Third New International Dictionary 1836 (1969). Also, I note that paragraph 1.A. contains the following language: "This agreement states the general terms and conditions which shall govern the rights and duties of the parties in respect to the publication of the following telephone directories . . . and related services as hereinafter more fully described." (Filing 25, Ex. A at LMB004 (emphasis added).) If the term "publication" were intended to encompass all of the duties that Berry agreed to perform, it seems to me that the "General Description" of the agreement would not use the words "publication . . . and related services as hereinafter more fully described." (Id.) In view of the foregoing, it is clear that within the context of paragraph 1.A, the word "publication" is to be given its plain and ordinary meaning, as opposed to the expansive meaning suggested by ALLTEL. Since paragraph 3, which describes the term of the agreement, refers specifically to paragraph 1.A., it would make little sense to attribute a different meaning to the term "publication" for the purposes of paragraph 3. Paragraph 5, which sets forth the competition prohibition, relies in turn upon the term of the agreement as defined in paragraph 3; thus, it is not reasonable to attribute a new, more expansive meaning to the term "publishing" for the purposes of paragraph 5. In short, the meaning of the terms "publication" and "publishing" that emerges from the context in which they are used is consistent with their plain, ordinary meaning as defined above, and does not include a broad list of "related services" described elsewhere in the agreement.
I conclude that the terms "publication" and "publishing," as they appear in the relevant portions of the agreement, are clear and unambiguous, and ALLTEL's interpretation, which conflicts with the plain and ordinary meaning of these terms, is not reasonable. Since the contract is not ambiguous, the intentions of the parties will be ascertained from the plain language of the contract, see Misle v. HJA, Inc., 674 N.W.2d 257, 264 (Neb. 2004), and no evidence of custom or industry practice need be considered, see Professional Business Services Co. v. Rosno, 680 N.W.2d 176, 188 (Neb. 2004); Rickertsen v. Carskadon, 108 N.W.2d 392, 395 (Neb. 1961). With the foregoing in mind, I shall now return to the issues raised by Berry in its motion for summary judgment.
1. The Expiration of the Agreement and the Running of the Competition Provision
Berry argues that "the parties' agreement for Berry to publish telephone directories for Lincoln, Nebraska expired in December 2003." (Filing 24, Pl.'s Br. at 8.) I agree.
The 1994 agreement states, "The term of this Agreement shall be for a period of five . . . years encompassing the publication of five annual issues of each of the following [directories]: Wahoo, Lincoln, Nebraska City, York, Beatrice and Hastings, as more specifically provided in paragraph 1.A. hereinabove." (Filing 25, Ex. A at LMB008 (emphasis added).) The agreement further specifies that the fifth and final annual issue of the Lincoln directory was scheduled for "publication" in December 1999. (See id. at LMB004.) Thus, given the ordinary meaning of the term "publication," the term of the 1994 agreement to publish a Lincoln directory was scheduled to expire in December 1999.
In 1998, the term of the prior agreement was "extended for an additional four . . . years encompassing four . . . additional directory issues" for Lincoln and the other five cities. (Filing 25, Ex. B at LMB031.) The extended agreement was scheduled to expire "upon the completion of the final issue of each directory," and the final issue of the Lincoln directory was to be completed in December 2003. (Id.; see also filing 25, Ex. C at LMB038.) There is no evidence that the Lincoln directory was not completed as scheduled. Therefore, I find that pursuant to the plain language of the 1998 agreement, the term of the parties' agreement expired in December 2003 (insofar as the Lincoln directory is concerned).
The parties agree that the "competition and solicitation" provision of the 1994 agreement was not eliminated when the agreement was extended in 1998. The competition provision prohibits Berry from "publishing" any directory that would be "primarily distributed" in any of the "exchange areas" covered by the agreement, and it remains in effect "[d]uring the term of [the] agreement and for a period of one . . . year thereafter." (Filing 25, Ex. A at LMB009.) The competition provision is clear, as is its meaning in light of the provisions discussed above: since the term of the agreement to publish directories in Lincoln expired in December 2003, Berry is prohibited from publishing a directory in Lincoln until December 2004. After December 2004, Berry may publish a Lincoln directory without violating the competition provision.
2. Acts That Do Not Amount to "Publishing," in the Plain and Ordinary Sense of the Term, Do Not Violate the Competition Provision
ALLTEL argues that the competition provision prohibits Berry from soliciting advertisers, providing advertising sales, providing customer service, and collecting advertising revenues for a Lincoln telephone directory until December 2004. (See filing 32, Defs.' Response Br. at 4, 8.) I disagree. The parties' intent is readily ascertained from the plain language of the agreement, which states, "During the term of this Agreement and for a period of one . . . year thereafter, Berry shall be prohibited from publishing any telephone directories primarily distributed in the exchange areas covered by the [directories] which are the subject of this Agreement." (Filing 25, Ex. A at LMB009 (emphasis added).) Obviously, the agreement does not state that Berry is prohibited from soliciting advertisers, providing advertising sales, providing customer service, collecting revenues, or providing other "related services" before the competition provision lapses. Also, as I explained above, the plain and ordinary meaning of the word "publishing," as it is used in the competition provision, does not include every activity that Berry agreed to perform for LT T and its successors in interest. Berry violates the competition provision only if it issues copies of a Lincoln telephone directory for general distribution to the public prior to December 2004. See Webster's Third New International Dictionary 1836, 1837 (1969).
3. Whether the Competition Provision Is Contrary to Public Policy
Berry argues that if ALLTEL's interpretation of the terms of the competition provision were adopted, the provision would be "unenforceable and void as against public policy." (Filing 24, Pl.'s Br. at 11.) Since I have rejected ALLTEL's interpretation of the agreement, Berry's argument is moot.
In sum, I conclude that the agreement between the parties is not ambiguous, and the relevant terms are to be "accorded their plain and ordinary meaning as an ordinary or reasonable person would understand them." Misle v. HJA, Inc., 674 N.W.2d 257, 264 (Neb. 2004). The agreement prohibits Berry from publishing a telephone directory for primary distribution in Lincoln, Nebraska, before December 2004. ALLTEL has argued, in essence, that when Berry solicits advertisers prior to December 2004, it publishes a telephone directory in violation of this prohibition. This interpretation of the agreement is not reasonable. When the term "publishing" is accorded its plain and ordinary meaning, it is clear that the agreement does not prohibit Berry from soliciting advertisers or taking other steps to prepare for the publication of a Lincoln directory after December 2004. In view of these findings, Berry's motion for summary judgment must be granted.
B. ALLTEL's Motion for Summary Judgment
In support of its motion for summary judgment, ALLTEL seeks to place before me evidence stating, "In the telephone directory industry, the terms `publish' or `publishing' are uniformly understood to include the concentrated selling effort, specifically including the solicitation of advertisers." (Filing 27, Defs.' Br. at 5 (citing filing 28, Index of Evid., Beach Aff. ¶ 4).) ALLTEL argues that in view of this evidence, Berry's interpretation of the 1994 agreement is not reasonable, and the competition provision "must be interpreted to preclude Berry from taking any steps toward publication, including, inter alia, the solicitation of advertisers." (Id. at 11.) However, it would be improper for me to consider ALLTEL's extrinsic evidence of custom or usage in this case.
In the interest of precision, I note that Mr. Beach's affidavit does not state that the relevant terms are "uniformly" understood to include "the concentrated selling effort," but rather states, "In the telephone directory publishing industry it is widely understood that `publishing' a telephone directory includes contacting and signing business advertisers up to a year in advance of the release date." (Filing 28, Index of Evid., Beach Aff. ¶ 4 (emphasis added).) I note too that Berry has submitted extrinsic evidence that contradicts Mr. Beach's affidavit. (See generally filing 31.)
The Supreme Court of Nebraska has stated that "when the terms of an express contract are clear and unambiguous, they cannot be varied or contradicted by evidence of custom or usage."Rickertsen v. Carskadon, 108 N.W.2d 392, 395 (Neb. 1961). See also Boutilier v. Lincoln Benefit Life Insurance Co., 681 N.W.2d 746, 750 (Neb. 2004) ("[A] contract written in clear and unambiguous language is not subject to interpretation or construction and must be enforced according to its terms.");Misle v. HJA, Inc., 674 N.W.2d 257, 264 (Neb. 2004) ("When the terms of a contract are clear, a court may not resort to rules of construction, and terms are accorded their plain and ordinary meaning as an ordinary or reasonable person would understand them. In such a case, a court shall seek to ascertain the intention of the parties from the plain language of the contract."). In this case, I have concluded that the relevant terms are clear and unambiguous; indeed, ALLTEL admits as much in its own motion for summary judgment. (See filing 27, Defs.' Br. at 6, 8). Therefore, ALLTEL's "custom and usage" evidence should not be considered.
ALLTEL relies upon Andrews v. Dehner, 24 N.W.2d 649, 651 (1946), in support of its argument that its extrinsic evidence should be taken into account. In Andrews, a contract for the sale of real estate contained no "agreement to divide commissions." Id. The court stated,
The rule is this, as we gather it from the texts and the cases: Where a contract exists regarding a subject matter, but is silent in its terms in one particular element, and where there exists a local custom known or which reasonably should be known to the parties, and where the custom is not unreasonable nor repugnant to the terms of the contract nor contrary to law or public policy, it is presumed that the parties contracted with a view to such custom, and the custom enters into and becomes a part of the contract.Id. (citations omitted) (emphasis added). The court considered the parties' evidence concerning the relevant customs in the Omaha real estate industry, and concluded that, based upon these customs, the defendant was entitled to an equal share of the commission. See id.
The rule described in Andrews is not applicable in this case. Quite simply, ALLTEL has not argued, and the evidence does not establish, that the agreement was "silent in its terms" and that evidence of custom must therefore be considered. On the contrary, the agreement specifies clearly and unambiguously the duration of its term and the conduct that Berry is prohibited from undertaking.
Other authorities cited by ALLTEL in support of its position are similarly unpersuasive and merit little comment. First among these is Coppi v. West American Insurance Co., 524 N.W.2d 804 (1994), which is plainly distinguishable in view of my finding (and ALLTEL's admission) that the relevant language is not ambiguous. See id. at 815. ALLTEL also refers me to Arkoosh v. Dean Witter Co., Inc., 415 F. Supp. 535, 544 (D. Neb. 1976), in support of its position. Arkoosh involved the alleged unconscionability of an arbitration clause, and I find it to be inapposite.
The remaining authorities cited by ALLTEL are secondary or are not based upon Nebraska law. (See filing 27, Defs.' Br. at 9-10.) Of these, one merits additional comment. United States Naval Institute v. Charter Communications, Inc., 875 F.2d 1044 (2nd Cir. 1989), involved a dispute between two book publishers. The plaintiff planned to publish the hardcover edition of a book in October 1984 and granted a license to issue paperback reprints to the defendant. See id. at 1045. The license agreement provided that the defendant was to "publish the . . . paperback edition not sooner than October 1985." Id. at 1046. In accordance with its usual practice, the defendant "calculated backward from the `pub date' of October 1985 to establish its production, promotion, and distribution schedule." Id. The defendant began to organize its promotional campaign in January 1985, and certain solicitations and trade advertising commenced in April 1985. See id. However, after the hardcover edition proved to be a best-seller, the defendant "accelerated its procedures" to ensure that its version of the book would be available in retail outlets across the country on October 1, 1985. See id. The defendant advised the plaintiff that the paperback would be distributed by September 15, and certain retail sales would begin as early as August 31, 1985. See id. The plaintiff filed suit, arguing that the defendant's "promotional activities and shipping plans" violated the license agreement. See id. The trial court agreed with the defendant's argument that "its scheduling of the shipment and sale of its paperback edition was in accordance with the trade usage of the term `publish' and with industry custom concerning the scheduling of the shipment and the sale of books." Id. at 1047. The court of appeals agreed with the trial court's finding that "the Agreement permitted [the defendant] to perform preparatory acts that would allow it to have the paperback edition available for sale to the public on October 1." Id. at 1049. However, the court of appeals reversed the district court's finding that "substantial pre-October 1985 retail sales" were not prohibited by the licensing agreement, stating that the paperback edition "was `publish[ed]' within the meaning of the Agreement when significant retail sales of that edition were made to the public." Id. at 1051. In reaching this conclusion, the court noted first that the meaning of the term "publish" must be analyzed "as a question of fact rather than a question of law," because the meaning of the term "publish" was ambiguous. U.S. Naval Institute, 875 F.2d at 1048. The court stated,
Though Naval urges us to rule that the Agreement's use of the term "publish" was clear and unambiguous and that the court therefore should not have admitted any extrinsic evidence as to its meaning, we disagree. While the Agreement uses the terms "publish" and "publication" repeatedly, it does not define them, nor does a precise meaning emerge from the contexts in which the terms are used. As the district court noted, the Agreement's prohibition on publishing sooner than October might reasonably be read to preclude a publisher from taking any steps toward publication, including printing and trade advertising, prior to October; or to bar any public revelation of the contents before October, as in the technical copyright sense; or to preclude any pre-October shipments; or to prohibit only pre-October retail sales. The interpretation most strongly urged by Naval was that the Agreement precluded pre-October shipping. Though the parties could have so agreed, we hardly think such a restriction, which would have precluded even shipping with the understanding that the containers could not be opened until October 1, was the necessary implication of the term "publish." While the interpretation urged by Naval was perhaps a permissible one, the other interpretations hypothesized by the court were also reasonable, and we therefore agree with the district court that the term "publish" was ambiguous.Id. In this case, as in U.S. Naval Institute, the terms "publication" and "publishing" are not defined. However, as I have explained above, the context in which these terms appear indicates plainly that "publication" and "publishing" do not encompass all "related services," such as advertising sales, marketing, revenue collection, and so forth. U.S. Naval Institute is therefore distinguishable. Parenthetically, I note too that U.S. Naval Institute clearly does not support the proposition that the meaning of the term "publish" includes such services; on the contrary, "preparatory acts" that would allow the defendant to publish the paperbacks on October 1 were not prohibited by the agreement.
In sum, although evidence of custom or usage "is admissible where there is a conflict as to the terms of the contract to explain the meaning of the words or phrases used, or where the contract is silent as to certain points which may be inherent in the nature of the contract," Rickertsen v. Carskadon, 108 N.W.2d 392, 395 (Neb. 1961) (citations omitted), neither condition has been shown to exist in this case. Therefore, ALLTEL's extrinsic evidence is not admissible, and its motion for summary judgment must be denied.
IT IS ORDERED that:
1. L.M. Berry and Company's motion for summary judgment, filing 21, is granted; and
2. ALLTEL's motion for summary judgment, filing 26, is denied.
JUDGMENT
IT IS ORDERED that in accordance with my Memorandum and Order on Cross Motions for Summary Judgment, judgment be entered in favor of L.M. Berry and Company, (Berry), along with the following declaration and injunction:
1. Berry's publication of a directory of Lincoln, Nebraska telephone numbers for primary distribution in that city in the year 2005 will not violate its non-competition agreement with the defendants;
2. Actions taken by Berry to prepare for the publication of this directory are not prohibited by the non-competition agreement; and
3. ALLTEL is without right or authority to maintain suit against Berry for any alleged breach of contract as a result of Berry's performance of necessary steps in anticipation of, solicitation for, and publication of its 2005 Lincoln, Nebraska, directory, or otherwise to interfere with such efforts;
4. ALLTEL, its agents, attorneys, and all persons in active concert or participation with ALLTEL are permanently enjoined and restrained from initiating litigation against Berry or any of its representatives, based upon Berry's performance of necessary steps in anticipation of, solicitation for, and publication of its 2005 Lincoln, Nebraska, directory, or otherwise to interfere with such efforts; and
5. The plaintiff is awarded taxable costs, to be determined in accordance with Rule 54.1(b) of Nebraska Civil Rules.