Summary
holding that the proposed amended complaint failed to state a cause of action for promissory estoppel "because the promise alleged--to pay commissions for extensions of the agreement-- is not a legal duty independent of the agreement but arises out of the agreement itself."
Summary of this case from Shetel Indus. v. Adin Dental Implant Sys.Opinion
2012-03-1
PETER LAMPACK AGENCY, INC., Plaintiff–Appellant, v. Martha GRIMES, et al., Defendants–Respondents.
Bierman & Palitz LLP, New York (Stephen H. Palitz of counsel), for appellant. DavidWolfLaw PLLC, New York (David B. Wolf of counsel), for Martha Grimes, respondent.
Bierman & Palitz LLP, New York (Stephen H. Palitz of counsel), for appellant. DavidWolfLaw PLLC, New York (David B. Wolf of counsel), for Martha Grimes, respondent. Dorsey & Whitney LLP, New York (Jonathan M. Herman of counsel), for Penguin Group (USA) Inc., Penguin Putnam Inc., Viking Penguin, Signet, Onyx and New American Library, respondents.TOM, J.P., FRIEDMAN, ACOSTA, DeGRASSE, ROMÁN, JJ.
Orders, Supreme Court, New York County (Bernard J. Fried, J.), entered October 8, 2010 and November 1, 2010, which, insofar as appealed from as limited by the briefs, granted defendant Martha Grimes's motion to dismiss the first through seventh causes of action as against her, granted defendant Penguin Group (USA) Inc.'s motion to dismiss the first through seventh causes of action as against it, and denied plaintiff's cross motion for leave to amend the complaint, unanimously affirmed, with costs.
The contracts at issue in this case are not ambiguous ( see Chimart Assoc. v. Paul, 66 N.Y.2d 570, 573, 498 N.Y.S.2d 344, 489 N.E.2d 231 [1986]; Bajraktari Mgt. Corp. v. American Intl. Group, Inc., 81 A.D.3d 432, 916 N.Y.S.2d 771 [2011] ). It is not reasonable to interpret the phrase “this Agreement” to include either extensions of the 1999–2003 agreements or an agreement for the future work mentioned in the 2005 agreement (for The Black Cat). If Grimes and Penguin had meant to give plaintiff commissions on such extensions and future agreement, they would have said so, especially since the 2005 agreement had a specific Option on Next Work clause ( see e.g. Reiss v. Financial Performance Corp., 97 N.Y.2d 195, 199, 738 N.Y.S.2d 658, 764 N.E.2d 958 [2001] ).
Interpreting “this Agreement” to mean only the actual contract signed by the parties, not future agreements or extensions, is consistent with the doctrine that “[a]n at-will sales representative is entitled to post-discharge commissions only if the parties' agreement expressly provided for such compensation” ( Swits v. New York Sys. Exch., 281 A.D.2d 833, 835, 722 N.Y.S.2d 300 [2001] [internal quotation marks omitted]; see also Scott v. Engineering News Publ. Co., 47 App.Div. 558, 62 N.Y.S. 609 [1900] ). Under its interpretation of “this Agreement,” plaintiff would be entitled to a 15% commission on The Black Cat and on all future extensions of the 1999–2003 contracts, although it had no role in negotiating either. This would be an absurd result ( see Scott, 47 App.Div. at 560, 62 N.Y.S. 609).
Plaintiff contends that it was the “procuring cause” of The Black Cat contract and the extensions of the 1999–2003 agreements. However, the complaint does not allege that plaintiff was the procuring cause of that contract or those extensions; it merely alleges that plaintiff procured the underlying 1999–2005 agreements. Moreover, the documentary evidence shows that plaintiff was not the procuring cause of The Black Cat contract; Grimes's new representative was the procuring cause of that contract. In any event, the procuring cause doctrine is inapplicable here. It is “generally applied to real estate transactions and almost exclusively to individual transactions where a broker seeks to recover commissions for a single sale” ( UWC, Inc. v. Eagle Indus., 213 A.D.2d 1009, 1010–1011, 624 N.Y.S.2d 321 [1995], lv. denied 85 N.Y.2d 812, 631 N.Y.S.2d 288, 655 N.E.2d 401 [1995] [citations omitted]; see also e.g. Devany v. Brockway Dev., LLC, 72 A.D.3d 1008, 900 N.Y.S.2d 329 [2010] ).
We also find that plaintiff has not pleaded a viable claim for breach of the covenant of good faith and fair dealing ( see Pappas v. Tzolis, 87 A.D.3d 889, 896, 932 N.Y.S.2d 439 [2011] ).
The proposed amended complaint fails to state a cause of action for breach of an implied-in-fact contract because there exists an express contract covering the same subject matter ( see Julien J. Studley, Inc. v. New York News, 70 N.Y.2d 628, 629, 518 N.Y.S.2d 779, 512 N.E.2d 300 [1987] ). It fails to state a claim for promissory estoppel because the promise alleged—to pay commissions for extensions of the agreement—is not a legal duty independent of the agreement but arises out of the agreement itself ( see MatlinPatterson ATA Holdings LLC v. Federal Express Corp., 87 A.D.3d 836, 842–843, 929 N.Y.S.2d 571 [2011] ).