Lazzarino v Warner Bros. Entertainment, Inc.Annotate this Case
Decided on October 30, 2006
Supreme Court, New York County
Anthony Lazzarino, Individually and as Successor-in-Interest to Windwood/Glen Productions, Inc.
Warner Bros. Entertainment, Inc., Warner Bros. Pictures, Inc., Universal Studios, Inc., Universal Pictures Company, Inc., Hypnotic, The Kennedy/Marshall Company, Frank Marshall, Henry Morrison Douglas Liman, the Estate of Robert Ludlum, Jeffrey M. Weiner, as Personal Representative, Marcum & Kliegman, L.L.P., and Jeffrey M. Weiner, Individually, Defendants.
Pro Se Plaintiff:
390 West End Avenue
New York, NY 10024
Attorneys for Defendants:
Mitchell Schuster, Esq.
Thomas L. Friedman, Esq.
Meister Seelig & Fein LLP
Two Grand Central Tower
140 East 45th Street, 19th Floor
New York, NY 10017
Attorneys for the Ludlum Defendants
Yvonne Look, Esq.
Time Warner Inc.
One Time Warner Center
New York, NY 10019
Attorney for the Warner Bros. Defendants
Marshall Beil, Esq.
McGuire Woods LLP
1345 Avenue of the Americas, 7th Floor
New York, NY 10105
Attorney for Defendant Henry Morrison
Richard Dannay, Esq.
Cowan, Liebowitz & Latman, P.C.
1133 Avenue of the Americas
New York, NY 10036
Attorney for Universal, Marshall, Liman Defendants
Bernard J. Fried, J.
Before me is a motion to dismiss (Mot. Seq. No. 1) and a motion to withdraw as counsel by counsel for Plaintiff (Mot. Seq. No. 3). For the reasons that follow, I grant the motion to withdraw as counsel and grant the motion to dismiss in part.
Plaintiff Anthony Lazzarino, individually and as successor-in-interest to Windwood/Glen Productions, Inc., ("Lazzarino") filed this complaint on June 6, 2005 alleging breach of contract and tortious interference with contract against Defendants Warner Bros. Entertainment, Inc. and Warner Bros. Pictures, Inc. (collectively, "Warner"), Universal Studios, Inc. and Universal Pictures Company, Inc. (collectively, "Universal"), the Estate of Robert Ludlum, Jeffrey M. Weiner, Individually and as Personal Representative, and Marcum & Kleigman, L.L.P. (collectively, the Ludlum Defendants"), Hypnotic and Douglas Liman (collectively, the "Liman Defendants"), Kennedy/Marshall Company and Frank Marshall, (collectively, the "Marshall Defendants"), and Henry Morrison ("Morrison").
Universal, Liman, and the Marshall Defendants (the "non-moving Defendants") filed an Answer. Warner, Morrison, and the Ludlum Defendants (the "moving Defendants") moved to dismiss the complaint pursuant to C.P.L.R. §§ 3211(a)(7), (a)(5), and (a)(1), based on documentary evidence, failure to state a claim, and the statute of limitations.[FN1]
At the time his complaint was filed, Lazzarino was represented by the firms Robins, Kaplan, Miller & Ciresi LLP ("Robins, Kaplan") and Brief Justice Carmen & Kleiman, LLP ("Brief Justice"). After being served with the motion to dismiss, these firms discovered a conflict of interest and were granted permission to withdraw as counsel for Plaintiff. On January 9, 2006, Rheingold, Valet, Rheingold, Shkolnik, & McCartney LLP ("Rheingold") appeared as counsel for Plaintiff.
Around this time, Lazzarino began to seek to represent himself. By an Order dated February 28, 2006, I denied Lazzarino's request to file an answer to the motion to dismiss pro se, [*2]because he was then still represented by counsel. Soon afterward, Lazzarino terminated Rheingold and directed it not to appear on his behalf. By this time, however, Rheingold had already prepared a first draft of opposition papers. At my direction, Rheingold filed the opposition papers on Lazzarino's behalf on March 1.[FN2] The moving Defendants filed a timely reply, and oral argument took place on March 23, 2006.
At oral argument, Simcha Schonfeld, Esq. of Rheingold filed a motion to withdraw as counsel for Plaintiff. I did not grant his motion and required Mr. Schonfeld to appear on Plaintiff's behalf during the argument. I also permitted Lazzarino to speak on his own behalf, since none of the Defendants objected.
Mr. Schonfeld argued that Plaintiff would be significantly prejudiced if he were not permitted to file his own opposition papers, because he would file very different opposition papers than the kind prepared for him by Rheingold. Although I initially denied this request, I eventually granted it, once Lazzarino informed me that he intended to base his opposition to the motion on documents that were not before me. (Trans. at 49-51.) I permitted Lazzarino to submit a supplemental affidavit with the appropriate documents,[FN3] and I permitted the moving Defendants to file a response. (Trans. 51-52.)
In addition to this supplemental affidavit, Lazzarino has filed three additional unauthorized submissions on June 7,[FN4] July 18, and August 9, 2006, which the moving Defendants have asked me to disregard. Out of a concern for the equities of the situation, I have reviewed all of Lazzarino's submissions. In the latter two submissions, Lazzarino announced that he had filed a disciplinary complaint against his former Robins, Kaplan attorneys and Warner's attorney and requested a hearing concerning his request for discovery.
A brief introduction to the parties is in order. According to the complaint: Plaintiff Anthony Lazzarino ("Lazzarino") writes and produces screenplays and packages films. The late Robert Ludlum [FN5] ("Ludlum"), whose estate has been sued, was the author of novels including "The Bourne Identity" (the "book") and "The Bourne Supremacy." Henry Morrison ("Morrison") was Ludlum's literary agent. Jeffrey Weiner ("Weiner") is the managing partner of Marcum and Kliegman LLP, which provided accounting and contract services to Ludlum. Weiner is also the executor and personal representative of Ludlum's estate. Warner and Universal are well-known film production companies. Frank Marshall ("Marshall") was executive producer of the 2002 film, "The Bourne Identity," based on Ludlum's book, and is a principal of the Kennedy/Marshall Company. Douglas Liman ("Liman") is associated with a film production company called Hypnotic. Both Kennedy/Marshall Co. and Hypnotic were co-[*3]producers of the film.
The complaint alleges that, in 1980, Lazzarino, Morrison, and a third person named Elliot Blair entered into a joint venture called Windwood/Glen Productions, Inc. ("Windwood") in order to create, present, and commercialize screenplays. In particular, they intended to package and finance a film based on Ludlum's book, based on a screenplay written by Lazzarino. (Compl. ¶ 20.) Initially, Lazzarino, Morrison, and Blair were equal shareholders of Windwood.
On behalf of Windwood, Lazzarino wrote a screen treatment of the book and successfully negotiated its sale to Orion Pictures Company ("Orion"), a film producer. (Compl. ¶ 23.) On July 24, 1981, Orion entered into four concurrent agreements relating to the book. (the "1981 Orion agreements"). These agreements anticipated that Orion would produce a feature film based on the book using Lazzarino's screen treatment and starring the actor Burt Reynolds. All four agreements, which were executed on the same day, referred to the other concurrently-executed agreements and concerned the same film project.[FN6]
The first was between Orion and Windwood (the "Orion-Windwood agreement"), in which Orion bought "the motion picture and allied rights to The Bourne Identity' [the "film rights"] and Plaintiff Lazzarino's treatment of that book." (Compl. ¶ 24.) The Orion-Windwood agreement states that it was executed "[c]oncurrently" with three other agreements: the Orion-Ludlum agreement and those between Orion and Lazzarino and Reynolds's production company, respectively. It also provides in part that:
If Orion shall subsequently determine to sell its interest in said feature film project to a third party, [Windwood] shall have the right to match the sales price for which Orion is prepared to sell its interest in the project to said third party, and if [Windwood] should [sic] promptly pay said sales price to Orion, then Orion will promptly convey all of its interest in the project to [Windwood].[FN7][*4]
(Orion-Windwood Agt. ¶ 5.) The parties call this provision the "right to match" clause.
The second agreement was between Orion and Ludlum, in which Ludlum sold to Orion "all of the motion picture and allied rights" in the book. (Orion-Ludlum Agt. ¶ 1; see also Compl. ¶ 25.) As part of Ludlum's consideration for this agreement, the agreement provides that Orion would make various cash payments to Ludlum; these payments would be dependent on the "[c]oncurrent" execution of the other 1981 Orion agreements and on various actions taken by Windwood and other parties to the four agreements. (Orion-Ludlum Agt. ¶ 3.) The agreement also notes that it was executed concurrently with a letter agreement dated July 25, 1981 between Orion and Ludlum, which provided that Orion could only make one film from the book (as amended, the "Orion-Ludlum agreement").
These agreements do not define what they mean by "motion picture and allied rights"; for instance, they do not explain whether this term includes the right to make a television mini-series based on the book. But the parties evidently anticipated that Orion would make a feature film. It is not clear from the agreements whether Windwood or Ludlum was the owner of the film rights at the time of the 1981 Orion agreements; both Ludlum and Windwood transferred "motion picture and allied rights" in the book to Orion.
By July 28, 1981, Orion had become the exclusive owner of the film rights, subject to the agreements described above. (Compl. ¶ 28.) Under the Orion-Windwood agreement, Windwood had the right to match the sales price if Orion or its successor decided to sell the film rights to a third party.
Soon afterward, a dispute arose among the shareholders of Windwood. Lazzarino filed a lawsuit in September 1981 against Morrison, Blair, Ludlum, and Ludlum's attorney. This lawsuit ended with the execution of a Stipulation of Settlement dated April 27, 1982 (the "1982 settlement"), in which Morrison and Blair resigned from Windwood, leaving Lazzarino as the only remaining shareholder. The 1982 settlement also provided that Morrison and Blair "shall do nothing to interfere or diminish Orions [sic] obligations to [Windwood] and to Lazzarino." (1982 Sett. ¶ 22.) It further provided that "[t]he parties agree to perform any and all acts required to be performed to effectuate the terms of this Stipulation Agreement and the agreements with Orion Pictures Corporation." (1982 Sett. ¶ 23.) By "parties," the 1982 settlement included Morrison, Blair, Lazzarino, Ludlum, and Ludlum's then-attorney.[FN8]
In 1982, Warner succeeded to Orion's rights and obligations with respect to the 1981 Orion agreements.[FN9] (Compl. ¶ 2.) [*5]
Neither Orion nor Warner produced a feature film based on the book prior to June 2002, and neither offered to sell Lazzarino the film rights. Around June 14, 2002, Universal released the film, "The Bourne Identity," starring Matt Damon. It was a huge commercial success, grossing over $200 million. Its producers included Ludlum and the Liman and Marshall Defendants. Around July 23, 2004, Universal released a sequel, entitled, "The Bourne Supremacy." Its producers included Marshall, Liman, Weiner, and Morrison, and it was equally successful.
Lazzarino filed this complaint on June 6, 2005, alleging causes of action for breach of contract and tortious interference with contract. Lazzarino alleges that Warner breached the Orion-Windwood agreement when it "sold to a third party" the film rights without offering Windwood the right to match its price, sometime "prior to June 14, 2002 and after July 17, 1980."[FN10] (Compl. ¶ 36.) The complaint alleges that the buyer was some combination of the remaining Defendants. (Compl. ¶ 37.) Plaintiff has also alleged that Morrison and Ludlum breached their obligations under the 1982 settlement, in particular by negotiating agreements by which Ludlum obtained and then sold the film rights. (Compl. ¶¶ 1, 3, 46-51; Plf.'s Opp'n I at 10-12.) Lazzarino has alleged that the agreements in 1986 and 1987 between Ludlum and Warner were invalid and demonstrated "fraudulent intent." (Plf.'s Opp'n II at 15, 20.) Lazzarino has alleged that Warner's "fraudulent intent" towards him goes back almost 50 years. (Plf.'s Opp'n II at 3-4.)
The complaint also alleges that all Defendants (except Warner) tortiously interfered with Plaintiff's rights under the 1981 Orion agreements and the 1982 settlement.[FN11] In particular, Plaintiff alleges that Ludlum intentionally procured breaches of contracts between Lazzarino on the one hand and Morrison and Warner on the other, which "were the actual and proximate cause of damages to Plaintiff Lazzarino commencing on June 14, 2002." (Compl. ¶¶ 59-63.) Plaintiff also alleges that Morrison intentionally procured breaches of contracts between Lazzarino on the one hand and Ludlum and Warner on the other, which "were the actual and proximate cause of damages to Plaintiff Lazzarino, commencing on June 14, 2002." (Compl. ¶¶ 53-57.)
In his supplemental submissions, Plaintiff has generally alleged collusion and fraudulent [*6]concealment by all the Defendants to circumvent Windwood's right to match. (See generally Plf.'s Opp'n II at 23, 27; Plf.'s Opp'n III.)
Lazzarino charges that neither of the films based on Ludlum's book could have been made but for these breaches of contract and the alleged tortious interference.
Motion to Dismiss and Documentary Evidence
On a motion to dismiss, the facts pleaded in the complaint are presumed to be true and accorded every favorable inference, but "allegations consisting of bare legal conclusions, as well as factual claims inherently incredible or flatly contradicted by documentary evidence are not entitled to such consideration." Caniglia v. Chicago Tribune-N.Y. News Syndicate, 204 AD2d 233, 233-234 (1st Dept. 1994). Dismissal based on documentary evidence under C.P.L.R. §§ 3211(a)(1) is proper when documents relied upon "definitively dispose of [the] plaintiff's claim." Bronxville Knolls, Inc. v. Webster Town Center Partnership, 221 AD2d 248, 248 (1st Dept. 1995).
In addition, "[t]he motion must be denied, if from the pleadings' four corners, factual allegations are discerned which taken together manifest any cause of action cognizable at law." Richbell Info. Servs, Inc. v. Jupiter Partners, L.P., 309 AD2d 288, 289 (1st Dep't 2003). In assessing a motion under C.P.L.R. § 3211(a)(7), a court may freely consider affidavits submitted by the plaintiff to remedy any defects in the complaint. Rovello v. Orofino Realty Co., 40 NY2d 633, 635 (1976). "The criterion is whether the proponent of the pleading has a cause of action, not whether he has stated one." Leon v. Martinez, 84 NY2d 83, 88 (1994) (internal quotation omitted).
The moving Defendants have attached various documents to their motion to dismiss, and Lazzarino has attached other documents to his supplemental affidavit and subsequent submissions.[FN12]
I will consider the documents submitted by Lazzarino in support of his complaint as relevant to this motion. See Rovello, 40 NY2d at 635. These documents include the Orion-Windwood agreement, the Orion-Ludlum agreement, the Orion-Lazzarino agreement, a July 1981 assignment of rights from Ludlum to Orion, the 1982 settlement, and a November 2, 1999 agreement between Ludlum and Universal (the "Universal-Ludlum agreement") which provided that Universal could make a feature film version of the book, as well as two sequels. Lazzarino has also submitted a film advertisement for the "The Bourne Identity," dated June 9, 2002, which lists Defendants Universal, Kennedy/Marshall, Hypnotic, and Liman in its credits.
In addition to some of these documents, the moving Defendants have also asked me to consider additional documents an unexecuted memorandum dated November 20, 1986, an agreement executed on March 12, 1987 between Ludlum and Warner (the "1987 Ludlum agreement"), and an agreement between WBTV and Ludlum executed on May 4, 1999 (the "1999 Ludlum agreement") in support of its motion to dismiss based on documentary evidence.
Because the 1986 document submitted by the moving Defendants is not executed by both [*7]parties, I do not consider it reliable documentary evidence and will disregard it.
The 1987 Ludlum agreement is an informal document entitled "Inter-Office Memo" and contains a Warner Bros. logo on the top. It describes itself as an amendment to the Orion-Ludlum agreement. It states that "WB-TV is the successor in interest to ORION''s [sic] rights under the [Orion-Ludlum] agreement." It provides that WBTV would have the right to make one motion picture, in the form of a television mini-series, based on the book, and that after its production, "all rights under the [Orion-Ludlum] Agreement shall revert to Ludlum ten (10) years after the end of the applicable network broadcast term." (1987 Ludlum Agt. ¶¶ A, C.) It further provides that, "[i]n the event WB-TV does not produce a Picture, all rights under the [Orion-Ludlum] agreement shall remain vested in WB-TV." (1987 Ludlum Agt. ¶ D.) Finally, it provides that, "[e]xcept as otherwise provided, all the terms and conditions of the Rights Agreement shall remain in full force and effect." (1987 Ludlum Agt. ¶ E.)
The 1987 document does not list the parties that agreed to its terms.[FN13] It is signed by Ludlum and "Art" this presumably means "Art Horan," the author of the memo. From the fact that the document repeatedly mentions WBTV and has a Warner Bros. logo at the top, it appears that Art signed his name on behalf of Warner or one of its affiliates. The document does not describe the relationship between WBTV and Warner, Defendants in this action. It also does not explain why WBTV entered into this agreement, when the 1981 Orion agreements had already given Orion's successor "all of the motion picture and allied rights" to the book.
The 1999 Ludlum agreement looks more like a formal contract. It states that it is an agreement between Ludlum and "Warner Bros. Television Production, a division of Time Warner Entertainment Co., L.P. , successor in interest to Warner Bros. Television ["WBTP"]."[FN14] It represents that, "[t]o the best of Ludlum's knowledge," the "documents through which [WBTP] obtained... certain rights in [the book]" consist of only the Orion-Ludlum agreement and the 1986 and 1987 Ludlum agreements. The document does not include the other three 1981 Orion agreements in this list.[FN15] It further provides for the termination of WBTP's film rights in Ludlum's book, except for those rights necessary for the distribution of the mini-series. Finally, it states that the parties "represent[ed] and warrant[ed]" that they each "ha[d] the right to enter into this Agreement and to grant the rights herein granted."[FN16] (1999 Ludlum Agt. ¶ 6.)
[*8]Plaintiff's Cause of Action for Breach of Contract Against Warner
Plaintiff has alleged broadly that Warner breached the Orion-Windwood agreement "and subsequent supplements, amendments and related contracts." (Compl. ¶¶ 1-2, 46, 49.)In this motion, the moving Defendants have focused on Plaintiff's allegation that Warner breached the Orion-Windwood agreement by selling the film rights to a third party without offering Lazzarino the right to match its price. The moving Defendants argue that the right to match obligation never arose, because Warner never sold the film rights to a third party. According to moving Defendants: WBTV and Ludlum entered into three supplemental agreements with respect to the film rights in 1986, 1987, and 1999, which provided that the film rights sold to Orion in 1981 would revert to Ludlum after WBTV had produced a television mini-series based on the book. WBTV produced such a mini-series, which was broadcast in 1988.[FN17] Afterward, the film rights reverted back to Ludlum, pursuant to the 1986, 1987, and 1999 agreements. A few months after executing the 1999 Warner agreement, in November 1999, Ludlum executed the Universal-Ludlum agreement, in which Universal bought the film rights from Ludlum.
It is evident from the documents that the 1987 and 1999 Ludlum agreements purport to amend the Orion-Ludlum agreement to allow the film rights to revert to Ludlum after the production of a mini-series based on the book. An evaluation of the moving Defendants' motion to dismiss this cause of action turns on whether the execution of these two agreements breached the 1981 Orion agreements.
This question in turn depends on whether the 1981 Orion agreements are considered part of a single agreement or four separate contracts. On the one hand, if they were part of a single agreement, then Plaintiff has stated a claim that Warner breached the 1981 Orion agreements by entering into the 1987 and 1999 Ludlum agreements without the consent of all the parties. See Richard A. Lord, 11 Williston on Contracts, § 33:24 (4th ed., West 2006) (where "one agreement is made wholly or partly in consideration of the simultaneous agreement to enter into another, the transactions are necessarily bound together"). On the face of the 1981 Orion agreements, it appears that the consideration for the Orion-Ludlum agreement included the concurrent execution of the other 1981 Orion agreements including the Orion-Windwood agreement, containing the right to match. A contract may not be altered without the consent of all the parties to that contract. Bier Pension Plan Trust v Estate of Schneierson, 74 NY2d 312, 315 (1989). If, on the other hand, these agreements are four separate contracts, then Ludlum would be a third party to the Orion-Windwood agreement, and Plaintiff would have a claim that Warner [*9]breached the right to match provision by entering into the 1987 and 1999 Ludlum agreements.[FN18]
In either case, I cannot determine, as a matter of law on a motion to dismiss based on documentary evidence, that Plaintiff has not stated a claim for breach of contract against Warner.
Plaintiff's Cause of Action for Breach of Contract Against Morrison and Ludlum
Plaintiff alleges that, by entering into agreements to reacquire the film rights from Warner and to sell them to Universal, Ludlum breached his obligation under the 1982 Settlement to "perform any and all acts required to be performed to effectuate" the 1982 Settlement and the 1981 Orion agreements.[FN19] (1982 Sett. ¶ 23.) By means of this conduct, Plaintiff alleges that Ludlum tried to circumvent Windwood's right to match. Plaintiff also maintains that, by negotiating these agreements, Morrison breached the same obligation and also breached his obligation to "do nothing to interfere or diminish" Orion's obligations to Windwood and Lazzarino. (1982 Sett. ¶ 22.)
The documentary evidence indicates that Ludlum entered into such agreements with Warner in 1987 and 1999 and an agreement with Universal in 1999. Morrison does not dispute that he was involved in negotiating the 1999 Ludlum agreement and the Universal-Ludlum agreement. (Morrison Aff. ¶¶ 9, 11.) It would appear that these agreements and the subsequent production of the 2002 film destroyed the practical value of Windwood's right to match under the Orion-Windwood agreement. Therefore, I conclude that Plaintiff has stated a claim for breach of contract against Ludlum and Morrison based on their alleged breaches of the 1982 settlement.
Plaintiff's Argument Regarding Breach of Covenant of Good Faith and Fair Dealing
In his opposition papers and at oral argument, Plaintiff suggested that Warner breached an implied covenant of good faith and fair dealing in the 1981 Orion agreements by failing to object or notify Windwood when Ludlum attempted to "s[ell] its rights out from under it" by selling the film rights to Universal in November 1999.[FN20] (Plf.'s Opp'n I at 9; Trans. at 41-42.) [*10]Plaintiff has alleged that Warner was aware of Ludlum's plan to sell the film rights to Universal when it reaffirmed the 1987 Ludlum agreement in May 1999; its awareness of Ludlum's plan is implied by the fact that Warner executed the 1999 Ludlum agreement just six months before Ludlum sold the film rights to Universal.
This argument, however, was not made in the complaint and is therefore not before me. Plaintiff has not sought leave to amend his complaint to add a cause of action for breach of an implied covenant of good faith and fair dealing. Out of consideration of his pro se status, however, I will grant him leave to file an amended complaint, in accordance with this memorandum, within 30 days of this decision. If Defendants move to dismiss this cause of action in the amended complaint, I will address this issue then.
Statute of Limitations Defense to Breach of Contract Cause of Action
Defendants contend, however, that the breach of contract cause of action against Warner must be dismissed against the moving Defendants because it was untimely filed.
Statutes of limitations have been an essential part of the Anglo-American legal system for centuries. They "are designed to promote justice by preventing surprises through the revival of claims that have been allowed to slumber until evidence has been lost, memories have faded, and witnesses have disappeared." Order of Railroad Telegraphers v. Railway Express Agency, 321 U.S. 342, 348-49 (1944) (Holmes, J.). Statutes of limitations encourage the prompt prosecution of claims and ensure that questions of fact will be decided on the basis of fresh evidence, thereby increasing the likelihood that both courts and juries will resolve factual issues fairly and accurately. Jorge L. Carro & Joseph V. Hatala, Recovered Memories, Extended Statutes of Limitations & Discovery Exceptions in Childhood Sexual Abuse Cases: Have We Gone Too Far?, 23 Pepp. L. Rev. 1239, 1252 (1996). Statutes of limitations are not "arbitrary obstacles to the vindication of just claims." Cada v. Baxter Healthcare Corp., 920 F.2d 446, 452-53 (7th Cir. 1990), cert. denied, 501 U.S. 1261 (1991). Rather, "[t]hey protect important social interests in certainty, accuracy, and repose." Id. at 453.
The New York legislature has decided that causes of action for breach of contract are subject to a six-year statute of limitations. C.P.L.R. § 213(2). A breach of contract cause of action accrues at the time of the breach, even if no damage occurs until later. Ely-Cruikshank Co., Inc. v. Bank of Montreal, 81 NY2d 399, 402-03 (1993) (refusing to postpone running of statute of limitations for contract action where plaintiff was allegedly unaware of the breach at the time it occurred).
The statute of limitations on Plaintiff's breach of contract cause of action against Warner began to run when Ludlum allegedly entered into the last agreement with Warner on May 4, 1999. Therefore, the six-year statute of limitations on this cause of action expired on May 4, 2005.
Plaintiff contends, however, that the moving Defendants should be equitably estopped from pleading the statute of limitations because they deliberately "concealed" from him the existence of the 1987 and 1999 Ludlum agreements until this motion to dismiss was filed. (Plf.'s Opp'n I at 15-16.) [*11]
Under the doctrine of equitable estoppel, a defendant may be estopped to plead the statute of limitations where a plaintiff "was induced by fraud, misrepresentations or deception to refrain from filing a timely action." Simcuski v. Saeli, 44 NY2d 442, 448-49 (1978). In order to qualify for equitable estoppel, a plaintiff must establish that the action was brought within a reasonable time after the facts giving rise to the estoppel ceased to be operational. Id. at 450. The reasonableness of the plaintiff's delay is a question of fact that will "necessarily depend on all the relevant circumstances." Id.
For instance, in Harkin v. Culleton, 156 AD2d 19 (1st Dept. 1990), the plaintiff filed his complaint alleging medical malpractice just 2 ½ months after the statute of limitations expired, 6 ½ months after learning about the alleged malpractice. Id. at 23-24. The Court reversed the trial court's grant of summary judgment dismissing the medical malpractice cause of action as untimely filed, concluding that the plaintiff had alleged fraudulent concealment by his physician and had acted diligently after discovering the alleged malpractice.
Here, in contrast to Harkin, there has been no discovery. Plaintiff has alleged that even the 1987 and 1999 Ludlum agreements only came to his attention for the first time as part of this motion to dismiss. Based on the documentary evidence submitted on this motion, it is evident that Ludlum and Morrison had personal knowledge of the Orion-Windwood agreement and its terms. One might therefore infer that the moving Defendants were aware of the right to match when they executed the 1987 and 1999 Ludlum agreements. Yet the 1999 Ludlum agreement fails to list the Orion-Windwood agreement among the documents through which, "[t]o the best of Ludlum's knowledge," Warner obtained "certain rights in [the book]."
Plaintiff has alleged that the moving Defendants deliberately "concealed" from him the existence of the 1987 and 1999 Ludlum agreements until this motion to dismiss was filed, and he has alleged that they had "fraudulent intent." (Plf.'s Opp'n I at 15-16; Plf.'s Opp'n II at 3-4, 27.) Although Plaintiff has not alleged specific misrepresentations or acts of concealment by the moving Defendants since the execution of the 1987 and 1999 Ludlum agreements, it would be "almost impossible to state in detail the circumstances constituting a fraud where those circumstances are peculiarly within the knowledge" of the moving Defendants. Jered Contracting Corp. v. New York City Transit Authority, 22 NY2d 187, 194 (1968). I conclude that, under the circumstances, it would be unreasonable to expect Plaintiff to state the circumstances of the alleged fraudulent misrepresentations or concealment in detail without permitting him fact discovery. Cf. Banner Industries, Inc. v. Schwartz, 181 AD2d 479, 480 (1st Dept. 1992).
Although there is no fixed amount of time that constitutes an unreasonable delay in bringing a cause of action after the estoppel ceases to be operational, it has been suggested that a delay close to the length of the statute of limitations would be unreasonable. Simcuski, 44 NY2d at 449. For instance, in Kermen v. Brower, 16 AD3d 156, 157 (1st Dept. 2005), the Court affirmed a grant of summary judgment dismissing the plaintiff's medical malpractice claim, which was subject to a 2 1/2-year statute of limitations, on the (alternative) ground that the plaintiff filed suit two years and three months after learning of her misdiagnosis.[FN21] [*12]
Kermen is distinguishable on at least two grounds. First, in Kermen, the additional delay was just three months short of the length of the applicable statute of limitations. In contrast, here the estoppel ceased to be operational in June 2002, when the film was released. Plaintiff filed suit three years later three years short of the statute of limitations on a breach of contract claim and only one month after the expiration of the original statute of limitations. Second, in Kermen, the Court had the benefit of a factual record, from which it could have concluded that there was no factual issue preventing summary judgment as to whether the plaintiff's delay was reasonable. Here, there has been no discovery, and Plaintiff has not had a chance to develop a factual record.
The Court of Appeals has indicated that it would be premature to decide whether a plaintiff met her due diligence obligation without allowing the plaintiff to develop a factual record. In Simcuski, the Court refused to dismiss a medical malpractice claim based on the (then) applicable three-year statute of limitations, where the plaintiff had filed her complaint 5 ½ years after the events occurred and 1 ½ years after she discovered the injury. The Court refused to decide whether the plaintiff met her obligation of due diligence as a matter of law on a motion to dismiss. Simcuski, 44 NY2d at 451.
According to documents submitted by Lazzarino, film advertisements for "The Bourne Identity" appeared at least as early as June 9, 2002. The advertisements listed Defendants Universal, Kennedy/Marshall, Hypnotic, and Liman in the film credits. At least by this time, Plaintiff knew that he had not been offered a right to match under the Orion-Windwood agreement. Plaintiff filed this lawsuit about three years later on June 6, 2005 just one month after the statute of limitations expired.
Under the circumstances, I cannot conclude as a matter of law that the reasonable time for bringing this cause of action for breach of contract had expired when Plaintiff filed his complaint.
Plaintiff's Causes of Action for Tortious Interference
Plaintiff has alleged that Ludlum intentionally procured breaches of contracts between Lazzarino on the one hand and Morrison and Warner on the other, which "were the actual and proximate cause of damages to Plaintiff Lazzarino commencing on June 14, 2002." (Compl. ¶¶ 59-63.) Plaintiff has also alleged that Morrison intentionally procured breaches of contracts between Lazzarino on the one hand and Ludlum and Warner on the other, which "were the actual and proximate cause of damages to Plaintiff Lazzarino, commencing on June 14, 2002."[FN22] (Compl. ¶¶ 53-57.) The moving Defendants contend that these causes of action must be dismissed under C.P.L.R. § 3211(a)(5) and (7) because Plaintiff has not alleged the requisite elements or specific facts in support of them, because the tortious interference claim against Morrison duplicates the breach of contract claim against him, and because they are untimely filed.
Tortious interference with contractual relations consists of four elements: (1) the existence of a contract between the plaintiff and a third party; (2) the defendant's knowledge of [*13]the contract; (3) the defendant's intentional inducement of the third party to breach or otherwise render performance impossible; and (4) damages to the plaintiff. Kronos, Inc. v. AVX Corp., 81 NY2d 90, 94 (1993). "Since damage is an essential element of the tort, the claim is not enforceable until damages are sustained." Id. For instance, in Kronos, the Court denied a motion to dismiss the plaintiff's claim for tortious interference with contract based on a statute of limitations, holding that the statute did not accrue until four years after the contract was allegedly breached, when the plaintiff first allegedly suffered injury, according to the complaint. Id. at 94-95.
Plaintiff has alleged that Ludlum intentionally procured a breach of the Orion-Windwood agreement when he executed the agreements with Warner and the Universal-Ludlum agreement, and that this conduct caused his damages. If fact discovery reveals that the 1981 Orion agreements were not a single agreement, then Ludlum was not a party to the Orion-Windwood agreement, but he certainly knew of it. I conclude that Plaintiff has stated a cause of action for tortious interference against Ludlum.
Plaintiff has also alleged that Morrison intentionally procured a breach of the 1981 Orion agreements when he negotiated the one or more of the agreements between Warner and Ludlum and the Universal-Ludlum agreement, and that this conduct caused his damages. Morrison certainly was aware of the 1981 Warner agreements, but he may not have been a party once he gave up his share in Windwood in 1982. I conclude that Plaintiff has stated a cause of action for tortious interference with contract against Morrison.
The moving Defendants argue, however, that the tortious interference with contract claim against Morrison restates the breach of contract claim against him based on his obligation in the 1982 settlement agreement not to "interfere [with] or diminish" Orion's obligations to Windwood. (1982 Sett. ¶ 22.) The cases cited by the moving Defendants in support of this argument, however, do not involve two separate contracts. As far as I can tell, they are cases in which the plaintiff alleged that the defendant both breached and tortiously interfered with a single contract, to which they were both parties. See Allerand, LLC v. 233 East 18th Street Co., 19 AD3d 275 (1st Dept. 2005) (dismissing claim that landlord tortiously interfered with lease in action by renter to enforce lease terms); JHH Pictures, Inc. v. Rawkus Entertainment LLC, 291 AD2d 356 (1st Dept. 2002) (dismissing tortious interference claim based on same contract to produce an album that was the basis of plaintiff's breach of contract claim). Here, in contrast, the subject of the tortious interference claim is the 1981 Orion agreements, to which Morrison is allegedly not a party. I decline to decide, based on the pleadings, whether a breach of Morrison's obligations under paragraph 22 of the 1982 Settlement would be duplicative of Plaintiff's tortious interference claim.
Finally, the statute of limitations on the tortious interference causes of action is three years. It began to run when Plaintiff first suffered damages. Kronos, 81 NY2d at 94. According to the complaint, Plaintiff first suffered damages on June 14, 2002. Consequently, Plaintiff's causes of action for tortious interference with contract against Morrison and the Ludlum Defendants are timely.
Allegations Against Former Lawyers and Defendants' Lawyers
Lazzarino has also alleged that his former law firm, Robins, Kaplan, has colluded with [*14]Defendants and their attorneys against his interests in this action.[FN23] He claims, among other things, that Robins, Kaplan prepared a complaint designed to fall under Defendants' planned defenses, failed to attach key documents to his complaint, and did not give him a copy of the Answer filed by the non-moving Defendants. I conclude, however, that these alleged actions cannot have prejudiced him, because I permitted Lazzarino to file a supplemental affidavit attaching whatever documents he deemed relevant, and Lazzarino obtained a copy of the Answer soon after the oral argument.
Lazzarino also alleges that these attorneys and Defendants fabricated or distorted agreements and documents to deprive Windwood of its rights under the 1981 Orion-Windwood agreement. He has asked me to order discovery prior to deciding this motion to dismiss, so that he can substantiate these allegations. I interpret this request as a request for me to convert the motion to dismiss into a motion for summary judgment, pursuant to C.P.L.R. § 3211(c). I do not find a basis for doing so; none of these attorneys are Defendants in this action, and the complaint does not allege a cause of action for malpractice or fraud.
Accordingly it is
ORDERED that the motion to dismiss (Mot. Seq. No. 1) is DENIED in accordance with the above memorandum decision; and it is further
ORDERED that Rheingold's motion to withdraw as counsel for Plaintiff (Mot. Seq. No. 3) is GRANTED; and it is further
ORDERED that, within 30 days of this decision, Plaintiff may file an amended complaint to add a cause of action for breach of an implied covenant of good faith and fair dealing, as discussed in this memorandum; and it is further
ORDERED that the parties shall appear for a preliminary conference before this Court at 10:00 a.m. on December 18, 2006, at which a discovery schedule will be ordered; and it is further
ORDERED that if Lazzarino chooses to proceed with new counsel, a notice of appearance shall be filed promptly.
Footnote 1:In this memorandum, "Defendants" shall refer to the moving Defendants only, unless its meaning is otherwise specified.
I will cite these papers as "Plf.'s Opp'n I."
I will cite these papers as "Plf.'s Opp'n II."
I will cite these papers as "Plf.'s Opp'n III."
Footnote 5:Ludlum died on March 12, 2001.
Footnote 6:The complaint mentions only three of the four agreements executed by Orion relating to the book on July 24, 1981: the Orion-Windwood agreement, the Orion-Ludlum agreement, and a third contract between Orion and a development/production company owned by Burt Reynolds, who was thinking of participating in a film based on the book (the "Orion-Reynolds agreement"). (Compl. ¶ 28.) The complaint does not mention the fourth July 24, 1981 agreement that between Orion and Lazzarino, in which Orion purchased Lazzarino's screen treatment of the book (the "Orion-Lazzarino agreement"). It is clear, however, from the July 24, 1981 agreement between Orion and Windwood, which was submitted by the moving Defendants as an appendix to their Notice of Motion, that all four 1981 Orion agreements were entered into concurrently.
Footnote 7:The Orion-Windwood agreement also provided that if Reynolds withdrew from the project, Windwood would have the option of "plac[ing] the project in turn-around" for six months, after which Orion would regain the film rights. (Orion-Windwood Agt. ¶ 5.) This provision was also reflected in the Orion-Ludlum and Orion-Lazzarino agreement. (Orion-Ludlum Agt. ¶ 3(B); Orion-Lazzarino Agt. ¶ 2(B).) The Windwood shareholders agreed not to exercise these reversionary rights, however, in the 1982 settlement of a lawsuit.
Footnote 8:This language quotes the text of the 1982 settlement, which Lazzarino submitted in support of his complaint. (See also Compl. ¶ 31(d).)
Footnote 9:Warner allegedly succeeded to Orion's interests "sometime on or after July 17, 1980." (Compl. ¶ 33.)
The moving Defendants argue that Orion's rights succeeded, not to Warner, but to Warner Bros. Television (WBTV), which they contend was a subsidiary of Defendant Warner Bros. Entertainment Inc., and which is not a defendant in this action. Lazzarino disputes this claim. The moving Defendants' documents do not either explain the relationship between WBTV and Warner or demonstrate that WBTV and not Warner succeeded to Orion's rights under the 1981 Orion agreements. Therefore, for purposes of this motion, I will treat WBTV and Warner as the same entity, pending further discovery.
Footnote 10:The contracts allegedly breached by Warner were the Orion-Windwood agreement "and subsequent supplements, amendments and related contracts." (Compl. ¶ 2.) I am not aware of any supplements or amendments to the Orion-Windwood agreement. I presume that "the related contracts" means the other three 1981 Orion agreements.
Footnote 11:The complaint also alleges that Defendants tortiously interfered with Lazzarino's "prospective business opportunities, advantages and relationships both independent of and stated in the contracts described." (Compl. ¶ 43.)
Footnote 12:I will disregard the affidavit submitted by Morrison except insofar as it supports the Complaint, because I am not permitted to consider affidavits in support of a motion to dismiss a complaint.
See supra n. 9.
The 1999 Ludlum agreement does not explain the relationship between WBTP and Warner, the Defendants in this lawsuit.
Footnote 15:Evidently, neither Warner nor Ludlum tried very hard to remember how many previous agreements concerning the film rights there were. The Orion-Ludlum agreement is a quick read only four pages long with a one-page amendment and states that its consideration included the concurrent execution of the other three 1981 Orion agreements. (See Orion-Ludlum Agt. ¶ 3.)
Footnote 16:The 1999 Ludlum agreement provides that it, as well as the 1987 Ludlum agreement and the 1981 Orion-Ludlum agreement, should be construed under California law. (1999 Ludlum Agt. ¶ 9.) Since none of the parties has relied on California law in its papers concerning this motion, however, I will also apply New York law.
Footnote 17:Lazzarino has not controverted the moving Defendants' contention that this mini-series was broadcast in 1988, although he appears to maintain that the mini-series was produced by Warner, and that WBTV is not a different entity. (Plf.'s Opp'n I at 4; Trans. at 46.)
Footnote 18:The moving Defendants contend that, even if the 1987 and 1999 Ludlum agreements could be interpreted as a sale from Warner to Ludlum, such a sale is not a transfer to a "third party," as required by the right to match provision, because Ludlum was not a third party to the Orion-Windwood agreement. At the same time, they maintain that Ludlum and Morrison were not parties to the Orion-Windwood agreement and therefore cannot have breached it. The moving Defendants cannot have it both ways: If Ludlum was not a party to the Orion-Windwood agreement, he cannot avoid being considered a third party for purposes of the right to match provision.
Footnote 19:Plaintiff has not alleged that Ludlum breached the right to match provision or another provision of the 1981 Orion agreements. (Plf.'s Opp'n I at 10.)
Footnote 20:"Implied in every contract is a covenant of good faith and fair dealing, which is breached when a party to a contract acts in a manner that, although not expressly forbidden by any contractual provision, would deprive the other party of the right to receive the benefits under their agreement." Jaffe v. Paramount Communications, Inc., 222 AD2d 17, 22-23 (1st Dept. 1996) (citations omitted). A claim for a breach of a covenant of good faith and fair dealing cannot be duplicative of the party's breach of contract claim. Cerberus Intl., Ltd. v. BancTec, Inc., 16 AD3d 126, 127 (1st Dept. 2005).
Footnote 21:Kermen does not state how much time had passed since the expiration of the statute of limitations.
The moving Defendants are incorrect in stating that "[t]he complaint does not specify when defendants allegedly tortiously interfered with the 1981 Orion-[Windwood] Agreement or when damages first accrued." (Defs' Opening Memo. of Law at 25.)
Footnote 23:Lazzarino did not make these accusations against Rheingold.