Ousley v. Krasnow

Court of appeals affirms summary judgment in favor of defendant on plaintiff's breach of implied contact and breach of confidence claims, finding no evidence to support the inference that plaintiff's disclosure to defendant of concept for a television Bingo show was made based on a mutual understanding with defendant that the concept was confidential or that its disclosure was predicated on a promise to pay for any subsequent use.

Plaintiff, Mike Ousley, a television producer, brought suit against a number of defendants, including claims against defendant Stuart Krasnow, an independent television executive producer, for breach of implied contract and breach of confidence. Plaintiff alleged he created, developed and sought to market the concept for a national Bingo television show and that he “pitched” the concept to defendant at a conference at which defendant was a keynote speaker, and that, based on defendant’s statements during his speech and the subsequent conversation, that defendant impliedly agreed not to divulge, use, or exploit the concept, except upon paying compensation to plaintiff. More than two years later, American Broadcasting Companies, Inc., Game Show Network, and Andrew Glassman, and Glassman Media, Inc., produced and broadcast a television program called National Bingo Night that plaintiff alleges was derived from his concept – but without having paid him any compensation.

Plaintiff asserted that he provided – and defendant accepted – written materials about the concept during a five-minute conversation after the end of defendant’s presentation at the conference, and that defendant said that he would read the treatment on the plane. Plaintiff did not raise the subject of confidentiality or request an agreement for payment for using his idea. He alleged that defendant stated he would be in touch, but plaintiff made no effort to contact Krasnow after the conference. Krasnow gave deposition testimony that while he attended the conference and spoke to attendees after his presentation, he did not recall speaking to plaintiff or receiving his written materials.

Defendant Glassman was credited as the creator and executive producer of the game show television series National Bingo Night, which aired on ABC in 2007. After six episodes, ABC did not renew the program, but a new version of the show called Bingo America ran on GSN with Glassman as creator and executive producer. Glassman and others presented evidence that he conceived the idea for those bingo programs without any knowledge or involvement of Ousley or his concept. Krasnow had no involvement in the creation, development, or production of National Bingo Night or Bingo America, nor did he receive any screen credit or compensation for those shows. At the time that plaintiff allegedly pitched the concept to defendant, Krasnow was under contract to NBC as an executive producer and had no authority to buy television programming ideas.

The connection between Krasnow and Glassman is that they had worked together on other television shows, although the evidence is unclear whether they were working together on a show at the time that plaintiff alleges that he pitched the idea to Krasnow, and that the two had traveled together on business. The evidence is unclear whether the two traveled together to Hawaii after the conference at which defendant presented and plaintiff allegedly pitched his concept. Krasnow testified that he would not have shared the concept with Glassman, however.

The lower court granted summary judgment in favor of Krasnow on plaintiff’s breach of implied contract and breach of confidence, finding no triable issues of fact as to the elements of the two causes of action, including the absence of evidence that plaintiff communicated to defendant that disclosure of his idea for a bingo-for-television program was conditioned on the mutual understanding that it was for sale or that its disclosure was based on a mutual understanding of confidentiality. Plaintiff appealed, asserting that summary judgment was improperly granted as to both causes of action because the evidence raised genuine issues of material fact as to the existence of an implied-in-fact contract. After de novo review, the court of appeals affirmed the decision of the lower court, finding no evidence to support a reasonable inference that plaintiff’s disclosure of his television Bingo concept was made upon a mutual understanding with Krasnow that the concept was confidential or that his disclosure was predicated on a promise to pay for any subsequent use.

Under the seminal California Supreme Court decision Desny v. Wilder, to establish an implied-in-fact contract, the plaintiff must show: that he prepared the work, that he disclosed the work to an offeree for sale, that under all circumstances attending disclosure the offeree voluntarily accepted the disclosure knowing the conditions on which it was tendered (i.e., the offeree must have the opportunity to reject the attempted disclosure if the conditions were unacceptable) and the reasonable value of the work.

Plaintiff argued the evidence supported a reasonable inference of an implied agreement based on the circumstances preceding and attending his disclosure, together with the conduct of the offeree – Krasnow – acting with knowledge of the circumstances. Specifically, plaintiff pointed to the following as asserting sufficient evidence to support the reasonable inference that Krasnow understood plaintiff was making an offer and expected compensation for subsequent use: (1) he made his "pitch" to defendant in the context of the conference, which had a "pitch pit" component; (2) defendant effectively solicited offers for programming ideas when he stated to the audience during his presentation that he was "always looking for projects and ideas"; and (3) Krasnow told plaintiff that he was interested in the bingo-for-television idea, took his business plan, and said they would be in touch.

The court of appeals disagreed, finding that, even taking the evidence in the light most favorable to plaintiff, it fell “far short” of showing communication of an offer to sell, much less of a mutual understanding to that effect, or of a voluntary acceptance of the implicit terms of nondisclosure and compensation for use. The fact that the conference was intended to draw participants who hoped to sell their ideas did not support a reasonable inference that defendant, by being a speaker, had any intention to solicit ideas. Defendant not only presented strong evidence to the contrary, but his presentation was not advertised as having anything to do with solicitations – and the conference included a “Pitch Pit" session that specifically offered participants the opportunity to sell their ideas, scheduled for a different day and in which Krasnow had no involvement. Defendant’s statement about "looking for ideas" in his speech could not reasonably be interpreted as soliciting ideas from participants, and without any indication from the circumstances and nature of his presentation that he was inviting business offers, defendant’s expression of general interest to plaintiff in the course of greeting him and others after the presentation did not support a reasonable inference that defendant understood he was receiving an offer, much less that he implicitly accepted one based on unstated commercial terms. In addition, plaintiff’s evidence concerning his own perceptions and understandings could not serve to create a disputed issue of material fact without evidence that this information was communicated to defendant. Without substantial evidence to support a reasonable inference of a commercial solicitation of the concept of bingo for television, or of defendant’s voluntarily acceptance of the idea with knowledge that plaintiff had tendered it for a price, summary judgment in defendant’s favor was appropriate.

The court concluded that plaintiff’s claim for breach of confidence failed for similar reasons – a lack of evidence that defendant had actual knowledge that plaintiff was disclosing his concept on the condition of confidentiality.

A claim for breach of confidence is based on an understanding between the parties that an idea is offered upon a condition of confidentiality. Plaintiff must establish defendant’s actual knowledge of the condition of confidentiality by actual notice – merely showing that defendant should have known of the confidential nature of the disclosure is insufficient – and knowledge of the confidential nature of information must also precede its disclosure.

Plaintiff asserted that defendant’s statements and actions in response to his pitch, interpreted in light of the surrounding circumstances during their conversation after defendant’s presentation, together supported a reasonable inference of a mutual understanding that plaintiff conveyed his television bingo concept upon a condition of confidentiality. The court disagreed, finding no evidence that plaintiff mentioned or implicitly referred to confidentiality at any time during his short, unsolicited pitch. Their discussion did not take place within the conference session reserved for the purpose of pitching ideas, and defendant’s expressions of interest were entirely vague as to the existence of any commercial purpose or confidentiality preconditions. Plaintiff sought to rely on evidence as to his own expectations concerning confidentiality, but never communicated those thoughts to defendant, and nothing concerning an understanding of confidence can be inferred from defendant’s conduct. The evidence did not raise a triable issue of fact as to the existence of an essential element of breach of confidence—an understanding between the parties that the confidential nature of the information will be maintained.