Touch Air Inc. v Launch 3 Communications Inc.
Annotate this CaseDecided on April 18, 2005
Supreme Court, Nassau County
Touch Air Inc. and Andrew Wolf, Plaintiffs,
against
Launch 3 Communications Inc. and Ari Zoldan, Defendants.
4084-01
Counsel for Plaintiffs
Gary S. Rosen Law Firm, P.C.
249-2 Jericho Turnpike
Floral Park, New York 11001
Counsel for Defendants
Daniel B. Faizakoff, P.C.
150 Broadway - 14th Floor
Leonard B. Austin, J.
Defendants, Launch 3 Communications Inc. ("Launch 3") and Ari Zoldan ("Zoldan"), move for an order pursuant to CPLR 3212 granting them summary judgment dismissing Plaintiffs' complaint and for sanctions.
Plaintiff, Andrew Wolf ("Wolf"), is the President of Touch Air Inc. ("Touch Air"). Zoldan is the sole principal and Chief Executive Officer of Launch 3, a telecommunications company.
BACKGROUND
Plaintiffs commenced this action seeking to recover damages based upon breach of an oral joint venture agreement and unjust enrichment.
Defendants seek summary judgment claiming that the within action is governed by a written co-broker agreement that was executed by Wolf on behalf of Touch Air and by Zoldan on behalf of Launch 3 on August 3, 2002. Pursuant to the co-broker agreement, Defendants claim that Touch Air was merely a "broker" entitled to receive compensation or a commission based upon introductions to Launch 3. In other words, Defendants contend that the parol evidence rule bars the introduction of any extrinsic evidence which seeks to vary, alter or contradict the terms of the written co-broker agreement
In opposition, Plaintiffs concede that there was a written co-broker agreement between the parties hereto. Plaintiffs, however, allege that they are not seeking to enforce this agreement. Rather, Plaintiffs assert that "there was a partnership/joint venture between Plaintiffs and Defendants based on an oral agreement, confirmed by an e-mail from Zoldan and that the course of conduct of the parties dictates the affirmance of th[is] agreement." (Wolf aff. ¶ 7 ). This alleged oral joint venture agreement was entered into and confirmed by e-mail in October, 2002. It purportedly included purchasing equipment from Winstar, selling the items and then dividing the profits equally between these two parties.
DISCUSSION
As a preliminary matter, the second cause of action predicated upon unjust enrichment must be dismissed inasmuch as Plaintiffs have not opposed this portion of the motion. In any event, the allegations in the second cause of action are insufficient to support a claim for unjust enrichment which is based on quasi-contract. Waldman v. Englishtown Sportswear, Ltd., 92 AD2d 833 (1st Dept. 1983). To sustain a claim for unjust enrichment, Plaintiffs must prove that it performed services at the request or behest of Defendants that resulted in Defendants receiving an unjust benefit. See, Clark v. Daby, 300 AD2d 732 (3rd Dept. 2002), lv. app. den., 100 NY2d 503 (2003); and Prestige Caterers v. Kaufman, 290 AD2d 295 (1st Dept. 2002). No such showing has been made here.
To obtain summary judgment, the proponent of the motion must make a prima facie showing of entitlement to judgment as a matter of law offering sufficient evidence to demonstrate the absence of any material issues of fact. Alvarez v. Prospect, 68 NY2d 320, 324 (1986); and Zuckerman v. City of New York, 49 NY2d 557, 567 (1980). Moreover, in deciding a motion for summary judgment, the evidence must be viewed in a light most favorable to the party opposing the motion. Matter of Benincasa v. [*2]Garrubbo, 141 AD2d 636, 637 (2nd Dept. 1988). Of course, summary judgment is a drastic remedy which should be granted only when there is no clear triable issue of fact presented. Andre v. Pomeroy, 35 NY2d 361, 364 (1974). Indeed, "[e]ven the color of a triable issue forecloses the remedy." Rudnitsky v. Robbins, 191 AD2d 488, 489 (2nd Dept. 1993).
It is axiomatic that, "when parties set down their agreement in a clear, complete document, their writing should as a rule be enforced according to its terms. Evidence outside the four corners of the document as to what was really intended but unstated or misstated is generally inadmissible to add to or vary the writing." W.W.W. Associates, Inc. v. Giancontieri, 77 NY2d 157, 162 (1990), citing, Mercury Bay Boating Club, Inc. v. San Diego Yacht Club, 76 NY2d 256, 269-270 (1990); Judnick Realty Corp. v. 32 West 32nd Street Corp., 61 NY2d 819, 822 (1984); Long Island R. Co., v. Northville Industries Corp., 41 NY2d 455 (1977); and Oxford Commercial Corp. v Landau, 12 NY2d 362, 365 (1963). This proposition of law imparts "stability to commercial transactions by safeguarding against fraudulent claims, perjury, death of witnesses, . . . infirmity of memory . . . [and] the fear that the jury will improperly evaluate the extrinsic evidence." W.W.W. Associates, Inc. v Giancontieri, supra at 162, quoting Fisch, New York Evidence § 42 at 22 (2nd ed.).
It is equally true that "extrinsic and parole evidence is not admissible to create an ambiguity in a written agreement which is complete and clear and unambiguous upon its face." W.W.W. Associates, Inc. v. Giancontieri, supra at 163. See also, Mercury Bay Boating Club v San Diego Yacht Club, supra, at 269-70). Initially, the court must determine whether or not a writing is ambiguous. W.W.W. Associates Inc. v. Giancontieri, supra at 162, citing Van Wagner Advertising Corp. v. S & M Enterprises, 67 NY2d 186, 191 (1986).
In this case, the parties' conflicting allegations generate a triable issue of fact as to whether they entered into an oral joint venture agreement which was separate and apart from the co-broker agreement. In so holding, this Court concludes that Defendants' reliance upon the parol evidence rule to preclude introduction of any extrinsic evidence which would modify, amend or alter the fully integrated co-broker agreement is misplaced here.
Plaintiffs assert that a separate and distinct joint venture agreement was entered into between the parties subsequent to the execution of this written co-broker agreement. Specifically, Wolf alleges that "the course of conduct of Ari Zoldan on behalf of Defendants and me on behalf of myself and Touch Air clearly evidenced that there was a partnership agreement to purchase (not broker) the equipment from Winstar." Given this scenario, Plaintiffs are not seeking to modify, alert or contradict the terms of the co-broker agreement. Rather, they are claiming that an oral joint venture agreement was formed.
A joint venture agreement is generally defined as "a special combination of two or more persons where in some specific venture a profit is jointly sought." Gramercy Equities Corp. v Dumont, 72 NY2d 560, 565 (1980), quoting Forman v. Lumm, 214 App. Div. 579, 583 (1925). The essential elements of a joint venture are (i) acts manifesting the intent of the parties to be associated as joint venturers; (ii) a contribution by the coventurers to the joint undertaking through a combination of property, financial [*3]resources, effect, skill or knowledge; (iii) a degree of joint proprietorship and control over the enterprise; and (iv) a provision for the sharing of profits and losses. Richbell Information Services, Inc. v. Jupiter Partners, L.P., 309 AD2d 288, 298 (1st Dept. 2003); Tilden of New Jersey, Inc. v. Regency Leasing Systems, Inc., 230 AD2d 784, 785-86 (2nd Dept. 1996); and Ackerman v. Landes, 112 AD2d 1081, 1082 (2nd Dept. 1985).
Viewing the evidence in the light most favorable to Plaintiffs, the indicia of the existence of a joint venture has been presented here. It is undisputed that the parties agreed to act as co-brokers in connection with the sale of Winstar equipment and that they would each be entitled to receive 50% of any commission or compensation paid by Winstar. (Co-broker agreement ¶1.2.) In addition, the e-mail upon which Plaintiff relies states, in relevant part, that,
"5) Sharing profits and expenses: Unless otherwise noted, we will share profits and expenses equally. This includes profits from sales of the equipment in Nyack, and profits from equipment in which either of us act as a broker from the Nyack and Delaware locations.
6) Equal ownership of equipment: We have equal ownership of the equipment located in the Nyack warehouse which we obtained as a result of the bulk purchase from Winstar, as well as anything else which we purchase together."
At this stage of the litigation, Plaintiffs have alleged that a successful venture that netted profits for the parties from the sale of Winstar equipment existed. Dundes v Fuersich, 8 Misc 3d 882 (Sup Ct., NY Co. 2004). Under these circumstances, an issue of fact has been raised as to whether the parties intended to and did, in fact, form a joint venture by agreement separate and distinct from the co-broker agreement. Such issue must be resolved by the trier of the facts.
Defendants seek sanction claiming that the commencement and prosecution of this action is frivolous as defined under 22 NYCRR 130-1.1(c). Based upon the outcome of this motion, sanctions would be inappropriate. Indeed, even if the motion were granted, sanctions would not be warranted. Not every unsuccessful claim is frivolous. Here, Plaintiffs have presented a colorable claim which precludes summary judgment and sanctions.
Accordingly, it is,
ORDERED, that Defendants' motion for summary judgment is granted to the extent that the cause of action based upon unjust enrichment is hereby dismissed, and is otherwise denied; and it is further,
ORDERED, that Defendants' motion for sanctions is denied.
This constitutes the order and judgment of this Court.
Dated: Mineola, NY ____________________________
April 18, 2005 Hon. LEONARD B. AUSTIN, J.S.C.
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