Security Bank & Trust Company v. Cook Group, Inc.

Background

Security Bank & Trust Company is the personal representative of the Estate of Kurt A. Amplatz. The estate sued Cook Inc. and Cook Medical LLC over two royalty agreements, continued use of Amplatz’s name, and related claims. The estate asserted breach of contract, right-of-publicity, and other claims. Cook counterclaimed for breach of contract and unjust enrichment.

The estate alleged that Cook owed royalties despite continuing to use Amplatz’s name after his death. Cook admitted that it stopped paying royalties but continued commercially using the name. Cook argued that the royalty agreements had expired, that the estate’s contract claims lacked consideration, and that the Amplatz name had become generic or descriptive. Cook also sought to recover royalty payments it allegedly made after the agreements expired.

Summary-judgment rulings on the estate’s claims

Both sides moved for summary judgment under Rule 56, which allows judgment without a trial when no genuine dispute over an important fact exists and the moving party is legally entitled to judgment.

The court denied both sides’ motions on the estate’s contract, unjust-enrichment, and breach-of-the-duty-of-good-faith-and-fair-dealing claims. The court said a jury must decide the disputed terms and duration of the alleged contracts, including whether they remained in force through Amplatz’s death. The court also rejected Cook’s arguments concerning assignment of the contracts, lack of consideration, and the statute of frauds at the summary-judgment stage.

The court granted Cook’s motion as to the estate’s promissory-estoppel and unfair-competition claims because the estate had withdrawn those claims. The court denied Cook’s motion on the estate’s right-of-publicity claim because factual disputes remained about whether “Amplatz” had become generic or descriptive. The court also denied Cook’s motion on punitive damages because factual issues remained.

Right of publicity

The court held that, under Minnesota law, an individual’s right to control commercial use of the individual’s name cannot be waived or abandoned by omission—meaning failure to enforce the right—during the individual’s lifetime. The court therefore granted the estate summary judgment against Cook on its waiver and abandonment defenses.

The court did not decide whether a name becoming generic or descriptive can serve as a defense to a right-of-publicity claim. It left for later the legal question whether that defense applies, after a jury decides whether “Amplatz” had actually become generic or descriptive.

Cook’s counterclaims and recoupment defense

The court granted the estate summary judgment on Cook’s counterclaims for unjust enrichment and breach of contract. It held that both claims were barred by Minnesota’s one-year limitations period for claims against a decedent’s estate because Cook first asserted them more than one year after Amplatz’s death. The court rejected Cook’s arguments that the probate exception prevented the federal court from applying that limitations period, that its communications with the estate’s attorneys presented a timely claim, and that it had shown sufficient cause for a late claim.

The court also granted the estate summary judgment on Cook’s recoupment defense. Recoupment is a defense seeking to reduce or offset a plaintiff’s recovery based on the same transaction. The court concluded that Cook could not use its unjust-enrichment theory to reduce the estate’s recovery and independently held that the theory failed on the merits because the evidence showed Cook deliberately continued making royalty payments and could not show that Amplatz was unjustly enriched.

Order

The defendants’ motion for summary judgment was GRANTED IN PART and DENIED IN PART. It was granted as to the estate’s promissory-estoppel and unfair-competition claims and denied in all other respects.

The plaintiff’s motion for partial summary judgment was GRANTED IN PART and DENIED IN PART. It was granted as to Cook’s counterclaims for unjust enrichment and breach of contract, Cook’s waiver and abandonment defenses to the right-of-publicity claim, and Cook’s recoupment defense. It was denied in all other respects.