Ledo Pizza System, Inc. v. Ledo Restaurant, Inc.
407 F. App'x 729
4th Cir.2011Background
- Bealls filed suit against Marcos parties for breach of contract, trademark violations, and unfair competition.
- District court awarded nominal damages for two minor contract breaches and ruled for Marcos on other claims.
- Bealls appealed challenging the license-agreement interpretation and other issues.
- Court analyzed Maryland-law objective contract interpretation and the license terms governing use of the Ledo mark.
- Court held Marcoses were not limited to advertising inside four walls; addressed co-promisor liability and Expressions’ use of the Ledo mark; reviewed attorney-client privilege ruling.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| License scope for advertising | Bealls: Marcoses limited to in-store advertising; websites violate license | Marcoses: license focuses on product sale restrictions and mark styling, not geographic advertising | Advertising not restricted to four walls |
| Co-promisor liability of Marcos, Sr. | Marcos, Sr. liable as co-promisor under joint-and-separate indemnity language | District court correct; no merit to co-promisor claim | Affirmed; no error in dismissing Sr. |
| Expressions’ use of Ledo mark | Expressions’ use violated agreements via Ledo mark outside permitted retail context | Arguments about Expressions’ use insufficient to breach; limited to Bowie area operations | Expressions’ use constitutes breach; vacated and remanded for damages |
| Attorney-client privilege ruling | Privilege determination error favored Bealls | No prejudice from ruling; proper grounds | Affirmed; no relief for Bealls |
Key Cases Cited
- Robinson v. Clipse, 602 F.3d 605 (4th Cir. 2010) (summary judgment de novo standard and factual/inference review)
- Seabulk Offshore, Ltd. v. American Home Assur. Co., 377 F.3d 408 (4th Cir. 2004) (contract interpretation; de novo review)
- Washington Metro. Area Transit Auth. v. Potomac Inv. Prop., Inc., 476 F.3d 231 (4th Cir. 2007) (objective interpretation of contracts; extrinsic evidence)
- Walton v. Mariner Health of Md., Inc., 894 A.2d 584 (Md. 2006) (objective contract interpretation in Maryland)
- Traylor v. Grafton, 332 A.2d 651 (Md. 1975) (joint and several liability for multiple promisors)
- Roanoke Cement Co. v. Falk Corp., 413 F.3d 431 (4th Cir. 2005) (bench-trial findings reviewed de novo; contract construction)
- Hawkins v. Stables, 148 F.3d 379 (4th Cir. 1998) (attorney-client privilege standard of review)
- United States v. Roe, 606 F.3d 180 (4th Cir. 2010) (harmless error analysis for evidentiary rulings)