Independent Media Corp. (pvt.) Ltd. - Pakistan (GEO TV) v Pakistan Independence Day Parade & Fair Comm., Inc.

[*1] Independent Media Corp. (pvt.) Ltd. - Pakistan (GEO TV) v Pakistan Independence Day Parade & Fair Comm., Inc. 2009 NY Slip Op 50776(U) [23 Misc 3d 1114(A)] Decided on April 13, 2009 Supreme Court, New York County Diamond, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on April 13, 2009
Supreme Court, New York County

Independent Media Corporation (pvt.) Ltd. - Pakistan (GEO TV), Plaintiff,

against

Pakistan Independence Day Parade and Fair Committee, Inc. et al., Defendants.



602743/07



The plaintiff was represented by The Rice Law Firm, of Manhattan. The defendants were represented by the Law Offices of Steven Hilsenrath, a Brooklyn law firm, by King & King, a Queens law firm, and by Grover & Fensterstock, a Manhattan law firm.

Marylin G. Diamond, J.

This is an action for breach of contract involving the right to televise an annual parade (the Parade) and fair held in this country in celebration of Pakistani Independence Day. The parade is sponsored by defendant Pakistan Independence Day Parade and Fair Committee, Inc. (Parade Committee). In recent years, the parade has been broadcast on television by either of two competing international television broadcasters, plaintiff Independent Media Corporation (pvt.) Ltd. - Pakistan (GEO TV)(GEO) or defendant Digital Broadcasting Network (DBN)(substituted for defendant Ary Digital USA). GEO claims that, on March 22, 2007, it entered into a written contract with Parade Committee to broadcast the 2007 Parade. This alleged agreement was executed by defendants Muhammad Saif Ullah (Ullah) and Mian Mohammad Fayyez (Fayyez), as chairman and secretary general, respectively, of the Parade Committee Board of Trustees. There is evidence backing up these contentions, contained in a writing entitled "Agreement" dated March 22, 2007, and executed by GEO, Ullah, Fayyez, and two non-party witnesses, as well as a copy of the minutes of a meeting of Parade Committee's Board, dated May 23, 2007, in which it appears that Ulluh and Fayyez were recognized by majority vote as authorized to enter into the agreement.

On August 14, 2007, GEO brought, by order to show cause, a motion for a preliminary injunction upholding its contract with Parade Committee and allowing it to proceed to fulfill that [*2]contract. This court granted the motion in a decision and order dated August 22, 2007, upon a finding that there was sufficient evidence to indicate the existence of a probability of success on the merits, based on the likelihood that Ullah and Fayyez had apparent authority to enter into an agreement with GEO in March, 2007, and that an agreement was reached at that time. Parade Committee and DBN sought an emergency stay before the First Department, which denied the relief and reiterated that the parties were to do nothing to impede GEO's ability to broadcast the Parade.

In this proceeding, DBN claims that, on July 11, 2007, it entered a binding written contract with Parade Committee to broadcast the event and that this contract preceded any alleged agreement GEO might have reached with Parade Committee. This claim is based on several recently-discovered e-mails, dated July 9, 2007, from Sami Abrahim (Abrahim), a GEO employee, to Sulaiman Lalani (Lalani), a senior officer at GEO, in which Abrahim made it clear that he was aware of the discussions between DBN and Parade Committee over a proposed contract and, in doing so, allegedly revealed that there was no existing contract between GEO and Parade Committee prior to July 11, 2007 and urged that one should be prepared as soon as possible. DBN asserts that these communications are admissions on GEO's part that it did not have a prior contract with Parade Committee, rendering this action frivolous and sanctionable.

Based on these e-mails, DBN now moves for an order dismissing the complaint as to it and declaring that GEO was not entitled to the preliminary injunction issued by this court. Alternatively, DBN seeks leave to amend its answer so as to serve a supplemental summons upon Abrahim and Lalani and for an order directing GEO to produce complete responses to DBN's discovery requests, specifically, discovery as to any communications concerning the alleged March 2007 contract, either before or after its alleged execution.

Ullah and Fayyez cross-move for an order (1) dismissing the complaint and all cross claims asserted against them and (2) awarding them indemnification and attorneys' fees as against the Parade Committee. Alternatively, they seek an order compelling the Parade Committee and DBN to respond to discovery demands.

Agreeing with DBN that there was never a March 22, 2007 contract between it and GEO, the Parade Committee cross-moves for an order sanctioning GEO for bringing a frivolous claim. It also seeks an order compelling disclosure by GEO.

Finally, GEO cross-moves for an order dismissing the counterclaims brought against it by Parade Committee and DBN or, alternatively, for leave to amend its complaint so as to add nine new causes of action.

Discussion

A. DBN's Motion for Summary Disposition

DBN asserts that the e-mails between Abrahim and Lalani prove conclusively that there was no contract between GEO and Parade Committee in March, 2007. Indeed, on the basis of these e-mails, it asks this court for an outright declaration to this effect. However, according to Ullah and Fayyez, the e-mails merely reflect the fact that GEO, aware that the Parade Committee might be backing away from its March 22, 2007 contract with GEO in order to enter into an agreement with DBN, was prepared to sweeten the deal with Parade Committee in order to maintain its established contractual rights. In view of these disparate interpretations, the e-mails merely raise an issue of fact which can only be resolved at trial. DBN's motion for summary [*3]judgment dismissing the entire complaint as against it must be therefore be denied.

Moreover, DBN's request for a declaration that the preliminary injunction was wrongly decided is an improper and untimely request for reargument or renewal of a previous decision which, in any event, is moot since the Parade has already occurred. However, in view of the fact that the Parade is long over, DBN is entitled to the dismissal of the fourth and fifth causes of action, which are clearly moot since they seek a permanent injunction against DBN's broadcast of the Parade and damages in the event that DBN broadcasted the Parade.

B. DBN's Request to Amend

Alternatively, DBN requests leave to serve an amended answer, adding Abrahim and Lalani to this litigation, as well as a claim for malicious prosecution. Leave to amend pleadings under CPLR 3025 (b) "shall be freely given absent prejudice or surprise resulting directly from the delay [internal quotation marks and citations omitted]" McCaskey, Davies and Associates, Inc. v New York City Health & Hospitals Corporation, 59 NY2d 755, 757 (1983). Amendment will not be allowed, however, where the proposed pleading is "patently devoid of merit" or "palpably insufficient." Kinzer v Bederman, 59 AD3d 496, 496 (2d Dept 2009).

Here, DBN has failed to show any reason for the addition of Abrahim and Lalani to the action. Although they are potential witnesses in this action, that status alone does not warrant adding them as parties to this action. The motion must therefore be denied.

As to DBN's proposed counterclaim for malicious prosecution, such a cause of action requires (1)pleading and proof of the commencement or continuation of a proceeding by the defendant against the plaintiff, (2) termination of the proceeding in the plaintiff's favor,(3) no probable cause for the proceeding, (4) actual malice and (5) special damages. See Wilhelmina Models, Inc. v Fleisher, 19 AD3d 267 (1st Dept 2005). In this respect, DBN cannot plead the termination of this action in its favor and has only alleged malice in a conclusory manner. In any event, its claim for malicious prosecution, which can only be asserted in a new and separate action, must await the outcome of this proceeding. Its cross-motion for leave to amend must therefore be denied.

C. Ullah and Fayyez's Cross-Motion for Summary Disposition

Ullah and Fayyez have cross-moved for summary judgment dismissing the complaint and all cross claims asserted against them based on their mistaken belief that this court, in finding that GEO was likely to succeed on the merits of its claim that it entered into an enforceable contract with the Parade Committee in March, 2007, has made factual findings in their favor which resolve both the issue of the validity of that contract and their authority to execute the contract on behalf of the Parade Committee. A finding of a likelihood of success on the merits on a motion for a preliminary injunction is not, however, the law of the case. "[T]he granting of a temporary injunction serves only to hold the matter in status quo until opportunity is afforded to decide on the merits. The granting or refusal of a temporary injunction does not constitute law of the case or an adjudication on the merits." J.A. Preston Corporation v Fabrication Enterprises, Inc., 68 NY2d 397, 402 (1986); see also Icy Splash Food & Beverage, Inc. v Henckel, 14 AD3d 595, 596 (2d Dept 2005). Although this court has already noted that there is evidence of a valid contract entered into by parties apparently authorized to act for Parade Committee, these matters are not yet proven and only serve to create questions of fact. The cross-[*4]motion must therefore be denied.

D. Ullah and Fayyez's Right to Indemnification

Ullah and Fayyez also seek an order declaring that, under Not-For-Profit Corporation Law §§ 722(a) and 724(a), they are entitled to be indemnified by the Parade Committee for the expenses they have incurred in this proceeding. Section 722(a) provides that a corporation may indemnify a director or officer of a corporation in a civil action "if such director or officer acted, in good faith, for a purpose which he reasonably believed to be in ... the best interests of the corporation ... ."Section 724 (a) provides that "indemnification shall be awarded by a court [to a director or officer] to the extent authorized under section 722 ... ."

In opposing this application, DBN has produced an affidavit from defendant Inayat Saikh (Saikh), the treasurer of the Parade Committee in March, 2007, who states that although any contract executed between Parade Committee and GEO had to first be given to him for review, he was not aware of the agreement's existence before this action was commenced. He claims that decisions such as whether to enter into such an agreement may only be made by committee, which does not appear to have happened in this instance. He insists that there were no meetings held by the board with regard to the purported March 22, 2007 contract. Thus, Saikh disputes that Ullah and Fayyez had the authority to enter, or ever did enter, into a valid contract with GEO.

As a result of the questions of fact that these allegations raise, it cannot be determined at this time whether Ullah and Fayyez acted in good faith in executing the purported agreement and are thus entitled to indemnification from Parade Committee, pursuant to the Not-For-Profit Corporation Law. Their request for this relief must therefore be denied.

E. GEO's Cross-Motion for Dismissal of Parade Committee's and DBN's Counterclaims or, Alternatively, for Leave to Amend the Complaint

GEO's motion for dismissal of the counterclaims against it brought by Parade Committee and DBN are based on the same mistaken theory assumed by Ullah and Fayyez that this court's finding of a likelihood of success on the merits on the motion for a preliminary injunction is the law of the case. As already discussed, the preliminary injunction order did not resolve what are clearly contested issues of fact. The court therefore declines to dismiss the counterclaims asserted against GEO.

Alternatively, GEO seeks leave to amend the complaint so as to add nine new causes of action (sixth through fourteenth). As to the eighth and ninth proposed causes of action, both are for breach of contract against Parade Committee and differ only in that the eighth cause of action seeks financial damages in the sum of $45,000 and the ninth seeks money damages to its reputation in the sum of $100,000,000. The motion is granted with respect to these two new claims.

As to the other seven proposed claims, leave must be denied since they are without merit. Thus, the sixth and seventh proposed causes of action are for tortious interference with contract against DBN. The alleged interference is that DBN did not cooperate with GEO after this court ruled that neither DBN nor Parade Committee was to interfere in any way with GEO in its broadcast of the Parade. GEO contends that, "[i]n direct violation" of this court's order, "neither DBN nor the Parade Committee made any effort to provide GEO with the necessary cooperation [*5]needed in order for GEO to properly broadcast the Parade." However, this court's order did not compel DBN to aid GEO in any way but it merely indicated that DBN was not to interfere with GEO's broadcast of the Parade. Thus, DBN's failure to aid GEO in broadcasting the Parade did not constitute tortious or any other interference with GEO's alleged contract with Parade Committee.

Similarly, as to the proposed tenth through thirteenth causes of action, each seeks damages stemming from Parade Committee's and DBN's alleged violation of the preliminary injunction order by failing to "cooperate" with GEO in its attempt to broadcast the Parade. Since the failure to merely cooperate and aid a competitor is not actionable under any legal principle cited by the plaintiff, these claims fail to state a cause of action. To the extent that the plaintiff seeks to hold Parade Committee and DBN in contempt of court, and the court discourages it from doing so, it should make a motion for such relief rather than improperly assert it as a cause of action.

As to the proposed fourteenth cause of action, GEO seeks indemnification from the Parade Committee in the event DBN prevails on its claim against GEO. DBN will only prevail if it proves that GEO had no contract predating DBN's, that is, that the March 22, 2007 contract never existed. However, if DBN is successful herein, GEO's liability to any injured party will not be based on any acts of Parade Committee. "In the classic indemnification case, the one entitled to indemnity from another had committed no wrong, but by virtue of some relationship with the tort-feasor or obligation imposed by law, was nevertheless held liable to the injured party." D'Ambrosio v City of New York, 55 NY2d 454, 461 (1982); see also Elkman v Southgate Owners Corp., 246 AD2d 314 (1st Dept 1998). Under this definition, it is clear that should DBN prevail, GEO would not have a claim against Parade Committee for indemnification.

F. Applications for Discovery Relief

The cross-motions by Parade Committee, as well as Ullah and Fayyez, for an order compelling discovery is denied. The disputes raised herein will be addressed and resolved at a conference before the court.

G. Parade Committee's Cross-Motion for Sanctions

Based on the disputed e-mails, Parade Committee seeks sanctions against GEO on the ground that it has been conclusively proven that GEO did not have a contract which pre-dated DBN's contract. Since, as already discussed, this issue raises triable questions of fact, the application for sanctions must be denied.

Accordingly, DBN's motion is granted to the extent that the fourth and fifth causes of action are hereby dismissed. The motion is otherwise denied. The cross-motion by Ullah and Fayyez is denied in its entirety, as is the Parade Committee's cross-motion. GEO's cross-motion is granted to the extent that it may assert in an amended complaint the eighth and ninth proposed causes of action. The motion is otherwise denied. The amended complaint in the proposed form annexed to the moving papers shall be deemed served upon service of a copy of this order with notice of entry thereof upon the defendants, who shall serve an answer thereto within thirty days of service.

The parties shall appear before the court in Room 412, 60 Centre Street, New York, New York on May 5, 2009 at 10:00 a.m. for a status conference.

The foregoing constitutes the order and decision of the court. [*6]

Dated: New York, New York

April 13, 2009

MARYLIN G. DIAMOND

J.S.C.