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RFD-TV, LLC v. Wildopenwest Fin., LLC

Supreme Court of Nebraska

June 13, 2014

RFD-TV, LLC, APPELLANT,
v.
WILDOPENWEST FINANCE, LLC, DOING BUSINESS AS WOW! CABLE, AND KNOLOGY, INC., APPELLEES

Page 108

[Copyrighted Material Omitted]

Page 109

Appeal from the District Court for Douglas County: J. MICHAEL COFFEY, Judge.

AFFIRMED AS MODIFIED.

Steven D. Davidson and Krista M. Eckhoff, of Baird Holm, L.L.P., for appellant.

Megan S. Wright, of Cline, Williams, Wright, Johnson & Oldfather, L.L.P., and Vince M. Roche, of Davenport, Evans, Hurwitz & Smith, L.L.P., for appellees.

HEAVICAN, C.J., STEPHAN, MCCORMACK, and CASSEL, JJ., and INBODY, Chief Judge.

OPINION

Page 110

[288 Neb. 319] Heavican, C.J.

I. INTRODUCTION

RFD-TV, LLC (RFD), filed a complaint against WildOpenWest Finance, LLC, doing business as WOW! Cable (WOW), and Knology, Inc., for breach of contract related to the termination of a cable television affiliation agreement. The defendants moved to dismiss the complaint for lack [288 Neb. 320] of personal jurisdiction. After a hearing, the district court dismissed the case with prejudice. RFD appeals. We affirm as modified.

Page 111

II. BACKGROUND

Appellant, RFD, is a television programming service focused on the interests of rural and agricultural counties. RFD is a Delaware limited liability company that claims Omaha, Nebraska, as its principal place of business. Knology and WOW are cable television providers operating in several locations, including Kansas and South Dakota. Knology is a Delaware corporation with its principal place of business in Georgia. WOW is a Delaware limited liability company with its principal place of business in Colorado. Neither Knology nor WOW has subscribers in the State of Nebraska, and neither company maintains a physical presence in Nebraska.

On December 14, 2009, RFD executed an affiliation agreement (Sunflower Agreement) with The World Company, doing business as Sunflower Broadband Corporation (Sunflower). The Sunflower Agreement granted Sunflower a nonexclusive right and license to distribute RFD programming to Sunflower's subscribers in Lawrence, Kansas, in exchange for a monthly per-subscriber license fee. The Sunflower Agreement was for an initial term of 5 years, expiring on December 13, 2014. The Sunflower Agreement provides that it " shall be governed by, construed, and enforced in accordance with the laws of the State of Nebraska" and states that " [a]ny dispute arising in or relating to this Agreement shall be resolved by binding arbitration in Omaha, Douglas County, Nebraska . . . ." Knology purchased Sunflower's assets in August 2010. Prior to acquiring Sunflower, Knology was providing cable service to subscribers in Sioux Falls and Rapid City, South Dakota.

In June 2012, Knology became a wholly owned subsidiary of WOW. In October, Knology and WOW informed RFD that as of December 1, 2012, they no longer intended to provide RFD programming to their subscribers. Knology and WOW ceased distribution of RFD programming and did not pay fees to RFD in December 2012.

[288 Neb. 321] On December 28, 2012, RFD filed a complaint alleging that Knology had ratified and adopted the Sunflower Agreement by distributing RFD programming to its subscribers in both Kansas and South Dakota and paying RFD the monthly fee according to the pricing structure provided in the Sunflower Agreement. In its complaint, RFD alleges Knology breached the Sunflower Agreement when it stopped making monthly fee payments to RFD before the contract expired.

Knology and WOW (hereinafter collectively appellees) filed a motion to dismiss under Neb. Ct. R. Pldg. § 6-1112(b)(2), alleging that the district court did not have personal jurisdiction over them and alternatively asking for a declaration regarding arbitration. The district court held a hearing on the motion. There was no oral testimony at the hearing, but the court received evidence in the form of an affidavit from each party.

Appellees offered into evidence an affidavit from Peter Smith, senior vice president of programming and advertising sales for WOW. In Smith's affidavit, he points out that RFD's production facilities and network operations are located in Nashville, Tennessee, and that the signal for RFD-TV is uploaded from Nashville. Smith also notes that under Knology's asset purchase agreement with Sunflower, Knology assumed only certain, specified contracts between Sunflower and programmers like RFD and that the Sunflower Agreement was not one of the contracts assumed by Knology.

Attempting to refute RFD's claim that Knology assumed the Sunflower contract by performing under its terms, Smith states ...


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