Innovative Legal Marketing, LLC, a Virginia Beach company, provides attorney and law firm marketing through various media. In 2009, the company entered into a spokesperson agreement with actor Corbin Bernsen, one of the stars of the popular television series, L.A. Law. The agreement gave Innovative the right to use Bernsen's likeness, voice and image to market the company and its clients. Innovative was to pay him $1,000,000 over five years in increments of $200,000 annually under a defined formula.
The parties fulfilled their advertising roles for almost two years with Innovative paying a total of $331,818.12 to the actor. But in June 2011, Bernsen said Innovative's managing director orally terminated the contract. The company stopped paying Bernsen but, as late as September 2011, continued airing certain Bernsen television commercials and featuring his photographs, recorded messages and video clips on the internet.
Bernsen sued the company for breach of contract and unjust enrichment, seeking the remaining balance, $668,181.88, along with incidental and consequential damages, interest, fees and costs.
Innovative moved for summary judgment, arguing that Bernsen violated the contract's morality clause by publicly discussing his sex life, drug use, and involvement in a bar altercation. Bernsen responded that the company knew about these things and, by saying nothing and continuing to use his services for over a year thereafter, waived the right to later terminate the contract based on the morality clause. Innovative then pointed to the contract's non-waiver clause.
The court agreed with Bernsen that non-waiver clauses, like any other contract provision, can themselves be waived. Waiver can occur through acts, conduct, or a course of dealing. While the presence of a non-waiver clause is evidence that Innovative did not intend to waive its rights, the clause was not conclusive evidence of non-waiver. Because a factual dispute remained with respect to Innovative's intent to waive the non-waiver provision, the court denied Innovative's motion for summary judgment.