Appendix — Hynes v. Sonido, Inc. (No. 08-1331)

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APPENDIX A

11 N.Y.3d 827, 897 N.E.2d 1079, 868 N.Y.S.2d 595

Mark Hynes, Appellant,

Sonido, Inc., Respondent.

Court of Appeals of New York

Submitted August 25, 2008

Decided October 28, 2008

Reported below, 50 AD3d 314.

On the Court's own motion, appeal dismissed,

without costs, upon the ground that no substantial

constitutional question is directly involved. Motion

for leave to appeal denied.

NY, 2008.

Hynes v Sonido, Inc.

11 N.Y.3d 827, 897 N.E.2d 1079, 868 N.Y.S.2d 595

APPENDIX B

Mark Hynes, Appellant

Sonido, Inc., Respondent.

Supreme Court, Appellate Division, First

Department, New York

April 3, 2008

CITE TITLE AS: Hynes v Sonido, Inc.

HEADNOTE

Contracts

Breach or Performance of Contract

The Law Offices of Anatta Levinksy, P.C., Brooklyn

(Robert M. Shafran of counsel), for appellant.

The Law Offices of Stuart A. Jackson, P.C., New

York (Christelle Clement of counsel), for respondent.

Order, Supreme Court, New York County (Ira

Gammerman, J.H.O.), entered February 9, 2007,

which granted defendant's motion for summary

judgment dismissing the complaint, unanimously

affirmed, with costs.

On February 10, 1997, the parties signed an

agreement reading in its entirety: “IT IS HEREBY

STIPULATED AND AGREED BY AND BETWEEN

SONIDO, INC. AND MARK T. HYNES, THAT

SONIDO, INC., WILL PAY MARK T. HYNES, TEN

PERCENT ‘10 (%) OF ALL SALES MADE AND

PAID FOR VIA THE INTERNET, OF MUSIC,

VIDEOS, ART, WORDS AND ADVERTISEMENT.”

We reject plaintiffs expansive interpretation

upon an examination of the intent of the parties

within the four corners of the *315 agreement, as

well as the circumstances under which it was

executed. Considering the allegation in the complaint

of breach by failure to pay the percentage of income

from Internet sales, the circumstances under which

the agreement was executed and the relationship

between the parties, the relevant contract term-

“TEN PERCENT ‘10 (%) OF ALL SALES MADE

AND PAID FOR VIA THE INTERNET?’-is

unambiguous. Indeed, under plaintiff's proffered

interpretation of the agreement, he would be entitled

to a percentage of not only the sales made by

defendant, but also of any royalties received. Such an

arrangement is clearly not contemplated by the plain

language of the agreement.**2

We have considered plaintiffs remaining

contentions and find them unavailing. Concur-Saxe,

J.P., Sweeny, McGuire and Acosta, JJ.

NY,2008.

Hynes v Sonido, Inc.

50 A.D.3d 314, 855 N.Y.S.2d 83, 2008 N.Y. Slip Op.

03069

APPENDIX C

Supreme Court of the State of New York —

New York County

PRESENT: IRA GAMMERMAN PART 27

Justice

Index No.

Index Number: 604046/2000 Motion Date

HYNES, MARK T. Motion Seg. No.

vs Motion Cal. No.

SONIDO, INC.

Sequence Number: 002

SUMMARY JUDGMENT this motion to/for

Notice of Motion/Order to PAPERS NUMBERED

Show Cause ~ Affidavits —

Exhibits

Answering Affidavits —

Exhibits

Replying Affidavits

CROSS-MOTION: __ YES __ NO

Upon the foregoing papers, it is ordered that

this motion is granted. See record.! s/ J. Allocca.

It is So Ordered

Enter.

1 The Order of the Supreme Court of the State of New York,

New York County incorporates, by this reference, the transcript

of the proceedings in question. Such are reprinted at App. 6-31,

infra.

FILED

FEB - 9 2007

NEW YORK

COUNTY CLERK’S OFFICE

Dated: 2/5/07 s/ IRA GAMMERMAN JHO

IRA GAMMERMAN 2S-G6-?

Check one: X FINAL DISPOSITION

__ NON-FINAL DISPOSITION

Check if appropriate: _. DO NOT POST

__ REFERENCE

16758

MOTION/CASE IS RESPECTFULLY

REFERRED TO JUSTICE FOR

THE FOLLOWING REASON(S):3

2 On the original form that comprises the Order in question, the

Judicial Hearing Officer struck through the abbreviation

“J.S.C.”

3 This portion of the form that comprises the Order in question

is printed vertically in the right margin of the original.

APPENDIX D

SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK: TRIAL TERM PART 27

Plaintiff,

INDEX NUMBER:

-against- 604046/00

SONIDO, INC.,

Defendant.

60 Centre Street

New York, New York

February 5, 2007

BEFORE:

HONORABLE IRA GAMMERMAN,

Judicial Hearing Officer

APPEARANCES:

IRVING SINGER, ESQ.

Attorney for the Plaintiff

54 Main Street

Third Floor

Hempstead, New York 11550

STUART A. JACKSON, P.C.

Attorneys for the Defendant

70 East 55th Street

New York, New York 10022-3322

By: STUART A JACKSON, ESQ., Of Counsel

CHRISTELLE CLEMENT, ESQ., Of Counsel

FILED

FEB 21 2007

NEW YORK

COUNTY CLERK’S OFFICE

JAMES V. ALLOCCA, CSR

OFFICIAL COURT REPORTER

THE COURT: This case is 16756.

That is my computer number.

It is helpful, if there are any further submissions,

that that number is placed on whatever is submitted.

This is a claim by the plaintiff under an

agreement that was entered into between the

plaintiff and the defendant, under the terms of which

the plaintiff claims to be entitled to ten percent of

any earnings realized by the defendant in connection

with sales made via the Internet.

The case was initially before me back in 2001,

when the issue that was raised, at that time, was a

claimed release executed by the plaintiff, which the

plaintiff maintained was a forgery.

I directed the attorney for the defendant to file an

order with notice of entry with the Legal Support

Office to obtain a date on the Referee’s calendar so

that the Referee could, hopefully, make a

determination with respect to the genuineness of the

release.

That was done on the 8* of January 2003, and

apparently, such a reference was made, and the

Referee, Marion Lewis, decided that she couldn’t

resolve the issue, but neither party, subsequent to

the Referee issuing a report, made a motion to either

confirm or disaffirm the report, indeed, the case

remained dormant thereafter until the defendant

recently made a motion for summary judgment,

claiming that the evidence established that there

was no breach of the Agreement inasmuch as there

were no Internet sales made by the defendant.

The papers that were submitted by the plaintiff

and the defendant, in my view, raised an issue of

fact, the defendant, offering an affidavit from an

officer of the company indicating that no Internet

sales were made, and the Plaintiff submitting an

affidavit from himself indicating that he had

evidence of Internet sales made by the defendant.

It seemed to me that, perhaps, a hearing on that

one issue — because it seems to me that that issue is

determinative of the motion — would be appropriate.

So, I have asked counsel to appear today, and it

seems to me that I’m interested, primarily, in the

evidence that the plaintiff has that the defendant has

made Internet sales.

Why don’t we have him testify.

Come up, Mr. Hynes.

MR. SINGER: Your Honor, wouldn’t it be more

appropriate, under a summary judgment motion — I

say this very carefully — that they bring forth the

basis for summary judgment?

THE COURT: The basis is the affidavit, and the

only issue that is created is a one sentence statement

in the affidavit, submitted by your client, in which he

says, in paragraph 12, this, which seems to me

somewhat contradictory.

In paragraph 11, he says, “The corporation should

be receiving payment from Sony, Warner, BMG,

Atlantic, Q-PASS, SoundExchange, and various

other entities, including Apple Corporation.”

In paragraph 12, he says, “At this time, I can

state that the company has made sales of millions of

records, CDs, or more over the Internet.”

As I interpret this agreement, the sales have to be

made by the defendant, not by a customer of the

defendant, and I presume that Sony, Warner, BMG,

et cetera, are customers of the defendant.

MR. SINGER: We go a step further.

THE COURT: Well, no.

I want to find out what evidence there is that the

defendant, Sonido, Inc., has made Internet sales.

MR. SINGER: If I may —

THE COURT: Go ahead, counsel.

MR. SINGER: —if you recall, when we

approached the bench the other day, I asked one

question about the canon of ethics, whether Mr.

Jackson could be the attorney on this case.

THE COURT: Im not going to get involved in

that, at this point.

MR. SINGER: No, it has something to do with

the fact pattern.

THE COURT: Go ahead.

MR. SINGER: It’s been a statement by Mr.

Jackson, only by him, the company has sold —

THE COURT: Counselor, I have an affidavit —

I’m not relying on anything Mr. Jackson said to me.

I have an affidavit from Maggie, B-U-R-B-A-N-O,

who says, in her affidavit, that she’s the vice-

president of the company, and the company has

made no Internet sales.

MR. SINGER: I would like to call her first.

THE COURT: §Let’s see if there is any evidence

from your client as to whether or not there are

Internet sales.

If he has evidence, fine, that creates an issue of

fact, and I will deny the motion for summary

judgment.

We don’t need that.

We have an affidavit from the vice-president of

the company saying that they haven’t made Internet

sales.

I’m not here to evaluate credibility.

I want to see what evidence there is that the

company has made Internet sales.

If there is evidence that the company has made

Internet sales, then we have an issue of fact.

MR. SINGER: I don’t disagree.

THE COURT: Come up, Mr. Hynes.

Raise your right hand.

MARK HYNES,

residing at 117 Kent Road, Valley Stream, New York

11580, the plaintiff herein, having been first duly

sworn, was examined, and testified as follows:

THE COURT: Ina loud and clear voice, give

your name and your address to the court reporter.

THE WITNESS: Mark Hynes —

THE COURT: H-Y-N-E-S?

THE WITNESS: With a “Y,” yes.

THE COURT: Where do you live?

THE WITNESS: 117 Kent Road, Valley

Stream, New York 11580.

THE COURT: Go ahead, counselor.

DIRECT EXAMINATION

BY MR. SINGER:

Q Mr. Hynes, are you familiar with

SoundExchange?

A Yes, sir.

Q@ What is SoundExchange?

A It’s a nonprofit organization that collects

royalties for webcasters and online services, for

companies that have publishing rights.

Q Now, when did — when was the company

established?

A I believe 1998.

Q And, by whom was it established?

A By the U.S. Copyright Office.

Q And, what does it do now?

A It collects royalties for — royalties paid by non-

interactive subscription and non-subscription

services.

Q Have you been able to discover whether Sonido

receives royalties through them?

A The only thing I could —

THE COURT: Let’s assume it has.

That is not the issue, counselor.

The issue is whether or not the royalties it

received relate to Internet sales made by the

Defendant.

MR. SINGER: That is what I’m getting to.

THE COURT: No, no, counselor.

Let’s move on.

A Well —-

THE COURT: Stop talking.

Q Who does SoundExchange collect the money

from?

A It says right here it collects it from satellite

radio, Sirius, television, music services, independent

labels, webcasters

THE COURT: Ok.

A — digital cable —

THE COURT: Right.

A —satellite music services —

THE COURT: All right.

Q What are those services?

THE COURT: Are those Internet services?

THE WITNESS: Some of them are.

MR. JACKSON: Some of them are.

THE COURT: Some of them are.

Counselor, we don’t know — that doesn’t mean

that the sales are made directly by the defendant —

THE WITNESS: Well —

THE COURT: - stop talking — that the sale was

made directly by the defendant to a particular

customer.

That is what I want to establish.

MR. SINGER: Okay.

Q Does MSN sell downloadable Sonido music?

A Yes, sir.

Q Who do they pay the royalties to —

A Idon’t know.

Q —MSN Music?

THE COURT: MSN Music?

THE WITNESS: [don’t know who they pay to.

MSN Music or iTunes.

THE COURT: Let’s take iTunes.

@ Does iTunes have Sonido on it?

A They have Sonido music, correct?

Q@ Do they pay to Sonido?

A Im not familiar with that contract.

Q How about Sprint?

A Sprint also has Sonido?

THE COURT: Counselor, there is no question

that Sonido music is sold over the Internet.

If you buy music from iTunes — and I’ve bought

music from iTunes — you buy it over the Internet.

There is no question about that.

MR. SINGER: The issue that you are raising is

the problem that I’m having, your Honor, and not

with him.

It’s the next question that I have to ask.

THE COURT: Ask whatever question you want.

MR. SINGER: 1 have tocall Mr. Jackson to the

stand. ;

THE COURT: Justa minute.

I take it — do you have any evidence —

THE WITNESS: Yes, sir.

THE COURT: — let me ask you the question —

that Sonido directly has sold any of its music over

the Internet?

THE WITNESS: Yes, sir.

THE COURT: What evidence do you have?

THE WITNESS: SoundExchange says, on page

2 here, “our sound recording company copyright

owner members include Sonido, Inc.”

THE COURT: There is no question about that

Sonido music is sold over the Internet, and Sonido

receives —

THE WITNESS: Royalties for that music.

THE COURT: Right.

The question is, who is selling it?

Is Sonido selling it, or is someone else selling it?

THE WITNESS: They would have to sell it by

license.

They would have to license someone else to sell it.

They don’t just let somebody take a CD and put it

on the Internet, because they have to give permission

to somebody.

THE COURT: Do we know they gave permission

directly to — what, iTunes?

A iTunes or SoundExchange.

They would have to, or it would be illegal for them

to be downloading —

THE COURT: There could be an intermediary,

could there not?

THE WITNESS: I don’t know.

THE COURT: Could there not?

MR. SINGER: Your Honor, I may —

THE COURT: Im asking the question of the

witness.

THE WITNESS: There could be.

THE COURT: Ok.

MR. SINGER: I would refer your Honor, and I’m

sure you do know the case of Capitol Records versus

Nexos of America, 5 NY3d 540, Court of Appeals, in

which the copyright law requires — and this is the

problem that I have — that there be a license to sell

by the person who owns the right.

THE COURT: Counselor, I’ve got many, many

license agreements, or many cases involving license

agreements, and the owner of a license can give it to

another person, and that other person can sell it.

MR. SINGER: That is why I want to call Mr.

Jackson.

THE COURT: All right.

At this point you think you can establish that

through Mr. Jackson?

MR. SINGER: Absolutely, sir.

THE COURT: Okay, step down.

(Witness excused.)

THE COURT: Come up Mr. Jackson.

MR. JACKSON: _ By the way, Judge, I did bring

Ms. Burbano in case you care to enquire of her.

THE COURT: Mr. Singer wants to question you.

Raise your right hand.

STUART A. JACKSON,

residing at 24 Yale Drive, Manhasset, New York,

called as a witness by and on behalf of Plaintiff

herein, having been first duly sworn, was examined,

and testified as follows:

THE COURT: Sit down, please.

In a loud and clear voice, give your name and

address to the court reporter.

THE WITNESS: _ Stuart, S-T-U-A-R-T, A.

Jackson.

THE COURT: Your address?

THE WITNESS: Twenty-four Yale Drive,

Manhasset, New York.

THE COURT: Go ahead, counselor.

DIRECT EXAMINATION

BY MR. SINGER:

Q Mr. Jackson, have you stated that Sonido is,

basically, out of business to me?

A Yes, sir, I have.

Q Did you tell me that it sold all its rights in

records, or whatever, to another company?

A I did.

Q Did you also tell me that that is a secret

agreement that you could not reveal to me?

A The agreement has a confidentiality provision,

and, as such, the sellers of its assets, honor that

confidentiality provision.

THE COURT: Excuse me for a moment.

(Pause in the proceedings.)

THE COURT: Go ahead.

Q And part of the assets of Sonido, Inc. was

licenses of the artists’ records and what not?

MR. SINGER: I would like these to be marked.

THE COURT: Just ask him.

Sonido had certain rights, publishing rights, with

respect to certain music?

THE WITNESS: _ Yes, sir, it did.

THE COURT: Was that sold to another

company?

THE WITNESS: Yes, sir.

Q Did they have all the rights —

A Did Sonido have all the rights?

Q -—that were connected from those licenses

with the artists?

A Well, we did not make a representation that

we had all of the rights for all of the artists that we

represented.

We sold all of the rights we had.

Q And, those rights would include, let’s say,

publishing; is that correct?

A Publishing, we sold publishing, and

reproduction.

Q And, records?

Yes, sir.

And, CDs?

Yes, sir.

And, the rights to sell on the Internet?

All rights, sir.

Q Well, one of the rights was, when you sold it —

what year did you make the sale?

A July 2005.

Q And, what was the method that they bought to

sell the records by?

A I! don’t understand your question.

Q Well, did you limit it in any way that they

couldn’t sell on the Internet?

A We made no limitations whatsoever, sir.

Whatever rights we had, we transferred.

Q So, if the music was sold by the Internet

method, this is a sale of all the Internet rights of

Sonido, is that correct, at that contract?

A Well —

Q Yes or no?

THE COURT: Sonido never sold on the Internet.

Q When you sold the rights that Sonido had,

wasn’t this all the rights?

THE COURT: The purchaser of the rights had

the right, no question about it, to sell whatever it

wanted over the Internet.

Let’s move on.

Q And, by that method, you made the entire

Sonido collection sale of the Internet rights, is that

not correct?

THE COURT: Sustained.

Counselor, that is not right.

Sonido sold whatever rights it had in this music.

It sold whatever assets it had.

If it had assets such as CDs, or sheet music,

whatever it had, to another company, the other

company, presumably, is selling over the Internet.

There is no question about that.

The question is, Sonido is not doing that.

MR. SINGER: When it made its sale, that is —

THE COURT: That is the basis of your claim?

MR. SINGER: No.

Q@ When did you become vice-president of the

corporation?

A Im the vice-president.

When did you become the vice-president now?

In connection with the sale.

What date was that?

Approximately July 2005.

Q Do you know if it ever made any sales prior to

that date?

A I know it did not?

Q How do you know it never made sales?

THE COURT: Counselor, the affidavit says it

did not, and I don’t see any evidence that it did.

That is my question.

MR. SINGER: Your Honor, under — they have —

they are not ready to —

Q@ Who is the — who was the president of Sonido

at the time you became vice-president?

A At the time that I became vice-president, the

president was Victor Gallo, G-A-L-L-O.

@ Did he ever state that he never made any sales

on the Internet?

A Yes, sir.

When?

Perhaps several years earlier.

Do you have an affidavit to that nature?

A He didn’t give me an affidavit, but I have his

longtime co-employee here today.

THE COURT: The person who executed the

affidavit?

THE WITNESS: The person who executed the

affidavit, was employed with Gallo for 20 some-odd

years, worked hand in glove with him.

She told me.

THE COURT: She will testify, too.

MR. SINGER: I will call her next.

THE COURT: Do you have any other questions

of Mr. Jackson?

MR. SINGER: None.

THE COURT: You can step down.

(Witness excused.)

THE COURT: Come up, please.

Raise your right hand.

MAGGIE BURBANO,

residing at 7336 Kennedy Boulevard, North Bergen,

New Jersey 07047, called as a witness by and on

behalf of Plaintiff herein, having first been duly

sworn, was examined, and testified as follows:

THE COURT: Sit down, please.

In a loud and clear voice, give your name and

address to the court reporter.

THE WITNESS: My name is Maggie, M-A-G-G-

I-E, last name, Burbano, B-U-R-B-A-N-O.

THE COURT: Your address?

THE WITNESS: 7336 Kennedy Boulevard,

North Bergen, New Jersey 07047.

DIRECT EXAMINATION

BY MR. SINGER:

Q@ What is your position for the company?

A Vice-president.

Q@ How many vice-presidents do they have?

A I became vice-president after —

MR. JACKSON: Listen to the question.

THE COURT: Who else is vice-president besides

you?

That is the question.

THE WITNESS: Nobody else.

THE COURT: Go ahead.

@ Who is the president?

THE COURT: Whois the president of the

company?

THE WITNESS: Mr. Jackson.

Q When did he become president?

A That is — after the sale of the company.

THE COURT: After the sale of the company.

Q Did he, in any way, run any of the operations

of the company prior to its sale?

A Excuse me?

THE COURT: Did he run the company before he

became president?

THE WITNESS: No.

@ Who ran the company before he became

president?

A Victor Gallo.

Q And, where is Victor Gallo?

A I have no idea.

THE COURT: How long have you been affiliated

with the company?

THE WITNESS: Around 21, 22 years.

THE COURT: What position did you hold when

you first became affiliated with the company?

THE WITNESS: _ I was doing different duties in

the company, accounting, bookkeeping.

Q Did you have any knowledge of its contracts?

A Which contracts?

I don’t know which contract we are talking about.

THE COURT: I assume the company sold music.

THE WITNESS: Yes.

@ Do you know — do you know what it said in its

contract for the sale of music?

Was there a standard contract?

A As far as I know, no, there was no contract

with wholesale.

We just sold the music to our customers.

Q Who were your customers?

A We have, like, around ten customers.

THE COURT: What is that?

THE WITNESS: We have around ten

customers that we sold music —

Q@ What were there names?

MR. JACKSON: Your Honor —

THE COURT: What were the names of your

customers?

MR. JACKSON: Your Honor — we have

hundreds, your Honor.

THE COURT: Any name.

A Any names —I can provide some.

As an example, R-E-Y-E-S, Records, H & L

Distributors, Aponte, A-P-O-N-T-E, Distributors,

Pacific Music —

THE CQURT: All right, that is enough.

Anything else?

Q Did you ever hear of Sound Off Exchange?

A I heard the name, but we haven’t — have no

contracts with selling CDs to SoundExchange.

Q They’re an outfit that collects money on the

Internet for the sales of records?

THE COURT: For the sale of music?

Q For the sale of music?

A No.

Q Never gct a check from them — from them?

A We got —a check was related with the music,

the use on the Internet, not the sale — the CDs on the

Internet, if there is any, not the sales.

We haven't sold one, not one CD, to

SoundExchange.

Q But, you did get money for the use of music on

the Internet, isn’t that correct?

A [Tm not sure.

I have io check on that.

I’m not sure.

Q Well, how about any other — how about Yahoo

A Yahoo?

Amazon?

Never received a check?

Never.

But, you don’t know about Sound Off, yes or

A About what?

Q The use — you said — well, you testified that

you got money from them, right, SoundExchange?

MR. JACKSON: _ She did not so testify.

MR. SINGER: Please, your Honor.

THE COURT: Please.

Say, “objection,” nothing else.

A SoundExchange, I have to check.

I remember seeing something — I’m not sure

about that.

THE COURT: But, counselor, that doesn’t prove

anything.

The problem you have is that, as I interpret this

contract, you have to prove direct sales, by the

defendant, over the Internet.

That was the purpose of this contract, as I

understand it.

Your client was setting up a software, and

perhaps hardware as well, that would enable the

company, if it decided to go into the business of

selling music over the Internet, to do so, and, in

exchange for his services, he had to get ten percent of

any of the monies realized from that sale or those

sales.

You have to establish that the company made

those sales, not that anybody else made those sales.

Q Did —- eventually, Sonido, was it sold to

somebody?

THE COURT: It was sold in 2005, according to

the testimony.

Q What was the contract for that sale?

A The sale of assets, music, and publishing.

Q And, did — that include the Internet price?

THE COURT: Counselor, there is nothing that

prevented whoever bought the assets and rights of

the defendant from selling music over the Internet.

That’s been established.

That is stipulated.

MR. SINGER: That is stipulated?

THE COURT: Absolutely.

MR. SINGER: Then I would like to be heard on

the legal argument to what the issue —

THE COURT: Your position, as I understand it,

if the company sold its assets to XYZ Company, and

XYZ sold music over the Internet, your client is

entitled to the money that the company received

from XYZ when it sold the rights?

MR. SINGER: No, ten percent of the rights of

the Internet sales.

What I am saying to you, your Honor, if you

could, just imagine there is a property right.

When Sonido sells all its assets, part of it is a

right called the Internet sales.

He is entitled to that portion.

THE COURT: I disagree with you completely.

Your position, as I understand it, is that in some

way, this contract entitles your client to a share of,

presumably, what Sonido received in 2005 when it

sold its rights because some of the Sonido music that

it sold to its customer, or the purchaser of its assets

and rights, is using that music in connection with

sales made over the Internet.

MR. SINGER: That is correct, your Honor.

THE COURT: That is not what the contract

says.

The contract says, sales by Sonido.

That is not a sale by Sonido, counselor.

MR. SINGER: That is the plaintiffs case, your

Honor.

THE COURT: All right.

The motion is granted.

The complaint is dismissed.

The clerk is directed to enter an appropriate

judgment.

Thank you both very much.

KKKA

1 DO HEREBY CERTIFY that the foregoing is a

true and accurate transcription of the original

stenographic notes.

s/ James V. Allocca C.S.R.

James V. Allocca, C.S.R.

Official] Court Reporter

4 In the original transcript of the proceedings three asterisks

appear. Such should not be confused with the use of asterisks

in this Appendix which indicate a break in the portions of the

document transmitted to the Appendix.

EXHIBITS

MARK HYNES

DIRECT EXAMINATION

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DIRECT EXAMINATION

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MAGGIE BURBANO

DIRECT EXAMINATION

BY BEI. BINGR: oo... sccocccss.ccecscecessconcsoeneons 19

FILED

FEB 21 2007

NEW YORK

COUNTY CLERK’S OFFICE

APPENDIX E

Hynes v Sonido, Inc.

Motion No: M-2283

Slip Opinion No: 2008 NYSlipOp 77720(U)

Decided on July 15, 2008

Appellate Division, First Department,

Motion Decision

Published by New York State Law Reporting Bureau

pursuant to Judiciary Law § 431.

This motion is uncorrected and is not subject to

publication in the Official Reports.

July 15, 2008

Hynes v Sonido, Inc.

Reargument or other relief denied.

Before: Saxe, J.P., Sweeny, McGuire, Acosta, JJ.

Motion No. M-2283

APPENDIX F

Mark Hynes v Sonido, Inc.

Motion No: 2008-1363

Slip Opinion No: 2009 NYSlipOp 61492

Decided on January 22, 2009

Court of Appeals Motion Decision

Published by New York State Law Reporting Bureau

pursuant to Judiciary Law § 431.

This motion is uncorrected and subject to revision

before publication in the Official Reports.

Mark Hynes,

Appellant,

Sonido, Inc.,

Respondent.

Motion for reargument denied.

APPENDIX G

U.S.CONST. amend. VII:

In Suits at common law, where the value in

controversy shall exceed twenty dollars, the right of

trial by jury shall be preserved, and no fact tried by a

jury, shall be otherwise re-examined in any Court of

the United States, than according to the rules of the

common law. U.S.CONST. amend. VII.

U.S.CONST. amend. IX:

The enumeration in the Constitution, of certain

rights, shall not be construed to deny or disparage

others retained by the people. U.S.CONST. amend. IX.

U.S.CONST. amend. X:

The powers not delegated to the United States by the

Constitution, nor prohibited by it to the states, are reserved to

the states respectively, or to the people. U.S.CONST.

amend. X.

U.S.CONST. amend. XIV § 1:

All persons born or naturalized in the United States,

and subject to the jurisdiction thereof, are citizens of

the United States and of the State wherein they

reside. No State shall make or enforce any law which

shall abridge the privileges or immunities of citizens

of the United States; nor shall any State deprive any

person of life, liberty, or property, without due

process of law; nor deny to any person within its

jurisdiction the equal protection of the laws.

U.S.CONST. amend. XIV § 1.

28 U.S.C. 1257(a):

Final judgments or decrees rendered by the highest

court of a State in which a decision could be had,

may be reviewed by the Supreme Court by writ of

certiorari where the validity of a treaty or statute of

the United States is drawn in question or where the

validity of a statute of any State is drawn in question

on the ground of its being repugnant to the

Constitution, treaties, or laws of the United States,

or where any title, right, privilege, or immunity is

specially set up or claimed under the Constitution or

the treaties or statutes of, or any commission held or

authority exercised under, the United States. 28

U.S.C. 1257(a).

APPENDIX H

New York County Clerk’s Index No. 604046/2000

NEW YORK SUPREME COURT

APPELLATE DIVISION—FIRST DEPARTMENT

MARK HYNES,

Plaintiff-Appellant,

—against

SONIDO, INC.,

Defendant-Respondent.

RECORD ON APPEAL

MARK HYNES

117 Kent Road

Valley Stream, New York 11580

(917) 545-4193

Plaintiff-Appellant Pro Se

STEWART A. JACKSON, ESQ.

CRISTELLE CLEMENT, ESQ.

THE LAW OFFICES OF

STEWART A. JACKSON, P.C.

70 East 55th Street

New York, New York 10022-3322

(212) 755-0500

R.E. PARSER & PARTNERS

445 Park Avenue

New York, New York 10022

(212) 752-7555

NIGRONE & RUSSO

112 West 31st Street

New York, New York 10001

(212) 563-1930

Attorneys for Defendant-Respondent

REPRODUCED ON RECYCLED PAPER

**K*

[R. 35-38]

SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK

MARK T. HYNES,

Plaintiff,

-against- VERIFIED COMPLAINT

Index No.: 00604046

SONIDO, INC.,

Defendant.

Plaintiff, complaining of the defendants by his

attorney, IRVING SINGER, P.C., alleges the

following:

1. At all times plaintiff MARK T. HYNES isa

natural person who resides in the State of New York.

2. Defendant SONIDO, INC. (hereinafter Sonido) °

is a corporation licensed to do business under the

laws of the State of New York, and is doing business

at 112 West 31°5t Street, 4*> Floor, New York, New

York 10001.

3. Gerald Masucci was president on February 10,

1997 of Sonido, Inc. As president he had authority to

enter into contracts on behalf of the corporation.

3a. On February 10, 1997, plaintiff and defendant

SONID entered into an agreement, through its

president and founder GERALD MASUCCT in which

defendant SONIDO agreed to pay plaintiff ten (10%)

percent of all sales made and paid for via the

internet, of music, videos, art, words and

advertisement. (Copy of the contract enclosed as

Exhibit A).

3b. There has been no subsequent agreement or

release modifying this agreement in any manner.

4. The contract was entered into in the State of

New York on February 10, 1997 between Mark T.

Hynes and Sonido.

5. Mark T. Hynes entered into a contract with

MCI on February 11, 1997 to supply internet

Bandwidth for web sites for the contract with Sonido

Inc.

6. This contract with MCI was in consideration

and performance of the agreement entered on

February 11, 1997.

6a. In reliance on this agreement and the

president of Sonido statements that he wanted all

sales of his Latin Music empire to be sold through

the Latin music website, in the year 1997, plaintiff

made capital and labor investments worth

approximately two hundred fifty thousand ($250,000)

dollars including, but not limited to the following:

(a) development of internet websites such as

http://www.latinmusic.com and other electronic

means to advertise defendants’ products and

generate sales,

(b) negotiation and implementation of a deal

with MCI for the networking of phone, fax and

Internet lines at approximately thirteen thousand

($13,000) dollars per year,

hardware, software, and the Real Audio Server,

(d) investment of approximately one thousand

(1000) hours of time for which plaintiff received no

compensation and for which he could otherwise have

billed at the fair and reasonable rate of one hundred

fifty ($150) dollars per hour.

7. Mark T. Hynes purchased Real Audio,

Intershop, Microsoft web servers, computers, rooters

firewall. and verisign software to perform said

contract.

8. Mark T. Hynes created by labor and supplies

the website known as LatinMusic.Com; subsequent

to entering into contract as consideration for contract

with Sonido.

9. Sonido used the website as created by Mark T.

Hynes without complaint from Sonido as

performance of the contract.

10. On October 1997 Sonido made a payment of

$13,000 as part performance of the contract to Mark

T. Hynes for the firewall.

11. Sonido was using the website created by Mark

T. Hynes as performance of the contract.

12. Upon information and belief on November

1997 the magazine Presario TV and Cable published

in Argentina stated that the president Jerry Masucci

that all Fania material will be distributed by the

Latin music website.

13. Upon information and belief Fania is a label

owned by Sonido completely and its purpose is for

the distribution of Sonido licensed music upon

information and belief.

14. Upon information and belief Sonido

distributes one percent of all music which is sold

worldwide.

15. On February 10, 1997 Sonido was in the

business of distributing and manufacturing and

licensing Gramophone recordings.

16. It was the intent of the parties that al sales of

Sonido products which result in income from any

source by the internet method would generate

income for Sonido and Mark T.. Hynes by the internet

method.

17. Upon information and belief Sonido

distributes through its labels or licenses for sale

through the internet worldwide its product which it

owned on February 10, 1997 and agreed to pay 10%

of those sales to Mark T. Hynes by the contract

entered into by its president and Mark T. Hynes

entered on February 10, 1997.

18. All future sales will be paid in the same

manner for Sonido product sold by the internet.

19. Mark T. Hynes has demanded performance by

Sonido Inc. in payment of all sales pursuant to the

contract entered on February 10, 1997.

20. Sonido Inc. has breached said contract by

failing to pay 10% of all income from sales made by

the internet nationally or globally from licensed

material.

21. Upon information and belief said income

believed is to be 40 million per year.

22. The plaintiff has been damaged in the sum of

$4,000,000.00 per year since the signing of the

contract.

23. At the present time the defendant is indebted

to the plaintiff damages in the sum of eight (8)

million dollars.

24. Plaintiff performed all responsibilities as

required by the contracts with the defendant.

25. Defendant SONIDO breached their contracts

by using plaintiffs web sites and unauthorized

modifications of plaintiffs websites without paying

pursuant to said contracts.

WHEREFORE, plaintiff respectfully requests

judgment against defendant SONIDO in the amount

of eight million ($8,000,000) dollars plus internet

[sic] and for such other relief as the ccurt deems just

and proper.

IRVING SINGER, P.C.

Attorneys for Plaintiff

By: sIRVING SINGER

IRVING SINGER

54 Main Street, 3'4¢ Floor

Hempstead, New York 11550

FILED (516) 485-6480

3/21/01

COUNTY CLERK

NEW YORK COUNTY

AS AN EXHIBIT (1)

[R. 254]

IT IS HEREBY STIPULATED AND AGREED BY

AND BETWEEN SONIDO, INC. AND MARK T.

HYNES, THAT SONIDO, INC., WILL PAY MARK T.

HYNES, TEN PERCENT ‘10 (%)’ OF ALL SALES

MADE AND PAID FOR VIA THE INTERNET, OF

MUSIC, VIDEOS, ART, WORDS AND

ADVERTISEMENT.

SWORN HERE BY

DATE: FEBRUARY 10, 1997

GERALD MASUCCI MARC T. HYNES

s/ Gerald Masucci s/ Mark T. Hynes

APPENDIX I

To Be Argued By:

ROBERT M. SHAFRAN

New York County Clerk’s Index No. 604046/2000

NEW YORK SUPREME COURT

APPELLATE DIVISION — FIRST DEPARTMENT

MARK HYNES,

Plaintiff-Appellant,

-against-

SONIDO, INC.,

Defendant-Respondent.

BRIEF FOR PLAINTIFF-APPELLANT

ROBERT M. SHAFRAN, ESQ.

THE LAW OFFICES OF

ANATTA LEVINSKY, P.C.

6924 Bay Parkway

Brooklyn, New York 11204

(718) 837-9700

Attorneys for Plaintiff-Appellant

REPRODUCED ON RECYCLED PAPER

kkk

[Brief for Plaintiff-Appellant pp. 1-47]

A CONCISE STATEMENT OF THE QUESTIONS

INVOLVED

1. Question: Is it error for a justice of the court to

find that an issue of fact was raised in the motion

papers of both parties, yet to proceed with summary

judgment nonetheless?

It is respectfully submitted that the Lower Court

granted the moving party summary judgment

despite finding that an issue of material fact was

indeed raised in both the papers supporting and

opposing the motion for summary judgment, and

that such was error.

2. Question: In an action in which the parties have a

contract awarding a percentage of the defendant’s

earnings to the plaintiff, is it appropriate for a justice

of the court to treat the issue of no sales being made

by the defendant as determinative?

It is respectfully submitted that the Lower Court

made this issue the determinative issue of the

summary judgment motion, and that such was error.

3. Question: If ambiguity as to the meaning of a term

in the contract is raised in the papers opposing a

summary judgment motion, and if the party opposing

the motion produces evidence in support of its

interpretation of the term, is it appropriate for the

presiding justice to proceed with summary

judgment?

It is respectfully submitted that the Lower Court

proceeded with summary judgment despite

ambiguity being raised in the papers in support and

in opposition to the motion, and that such was error.

4. Question: If a search of the record, as well as a

search of the papers for and against the motion,

reveals that the moving party breached its contract

by repudiating said contract, is it appropriate for a

court to grant summary judgment on the issue of

breach of contract in favor of the moving party?

It is respectfully submitted that the Lower Court

seems to imp'y that a court may do such, as it

reviewed the record, as well as the papers for and

against the motion, and granted summary judgment

to the Defendant nonetheless, and that such was

error.

5. Question: Was it improper for the Lower Court to

interpret the contract in a way that ran contrary to

First Department and Court of Appeals precedent

regarding the rules of contractual construction?

It is respectfully submitted that the Lower Court

seemed to imply that such can be done as its decision

to make one issue determinative relies upon an

interpretation of the contract that was arrived at

without following the rules’ of contractual

construction set forth in First Department and Court

of Appeals precedent, and that such is error.

A STATEMENT OF THE NATURE OF THE CASE AND

THE RELEVANT FACTS

Although the date is disputed, at some time

between 1994 and 1996, Jerry Masucci, the President

of Sonido, Inc., became interested in modernizing the

computer and telephone systems of his corporation.

(R. 324 & 210). Jerry Masucci contacted MCI and

Microsoft to see who could provide this service to his

company. (R. 161& 197). Mr. Masucci was referred to

Mark Hynes, a Navy trained specialist in computers,

system administration, data base administration,

and communications, who had worked for Case

Three Computers in Florida, a Florida _ police

department, Corporate Micros, Lehman Brothers,

and Nordic Securities. (R. 196 — 197). Thereafter,

Jerry Masucci hired Mark Hynes to perform

computer repair and maintenance services, fix

computer programs that were not working, install

firewalls, and to create a windows-based computer

program for bookkeeping at Sonido, Inc. (R. 324, 206

& 210 —211).

In 1997, Sonido, Inc. and Mark Hynes entered

into a contract for the distribution of music through

the Internet, as well as for the sale of videos, arts,

words, and advertisement. (R. 286 & 307). The

contract was written by Jerry Masucci, who was an

attorney in addition to being the company’s owner.

(R. 240). At the time that the contract was executed,

the sale of music over the Internet was in an

embryonic stage of development with relatively little

commercial value as there were not many internet

sales of an appreciable value to the consumer. (R.

286). Because of this risk, and because Sonido, Inc.

did not want to incur the expenses that were

required to build the capacity to sell music on the

internet, Sonido, Inc. gave Mark Hynes a ten percent

interest in all internet sales in exchange for his

developing the Internet project. (R. 206, 286 & 74).

The purpose of the contract was to develop a program

to repair the faults in Jerry Masucci’s billing system,

as he allegedly believed that the company was losing

money through bookkeeping and other problems, and

to set up a program that could be accessed from

anywhere in the world. (R. 200 — 204). Mr. Masucci

wanted a program that was “fully redundant;” a

program that would track everything that went on in

his company; a program where entries could not be

deleted, since he allegedly believed that he was

losing money to inter-company theft. (R. 203 — 204).

The program was also meant to calculate all royalties

for artists, authors, publishers, and producers. (R.

202). It was also to be designed to produce invoices,

and track all of the manufacturing and contracts of

the company. (R. 202). In short, it was to bring

everything in the company to Jerry Masucci’s

fingertips. (R. 202).

At the time of execution, as well as afterwards,

Sonido, Inc. was also making plans to become a

publicly traded company. (R. 156). Concurrently,

Mark Hynes’ worked for hundreds of hours

developing the Internet project, encoding thousands

of compact discs from every label of the company’s

catalog, though he was never paid for these services.

(R. 61,194 -195, 224 & 260).

In November of 1997, the magazine, Presario TV

and Cable, published an article that quoted Jerry

Masucci as stating that all Fania material would be

distributed via the Internet. (R. 61 & 70). Shortly

thereafter, on December 21, 1997, Jerry Masucci died

unexpectedly while in Argentina. (R. 308).

After the death of Jerry Masucci in 1997, Sonido, Inc.

claims never to have pursued the development of any

website, and never to have sold any music (or any

other item) over the Internet. (R. 309). Shortly

thereafter, Sonido, Inc. refused Mark Hynes access to

its building, and told not to return, although it was

the place where he worked on the Internet project.

(R. 166 & 230). During this time, Sonido, Inc.

attempted to terminate its relationship with Mark

Hynes through the use of an instrument that Mark

Hynes alleges to be a forgery. (R. 9 & 207 — 208). A

copy of the alleged forgery was brought to Mark

Hynes by an associate of Sonido, Inc., and when

Mark Hynes confronted the then President of Sonido,

Inc., Victor Gallo, about the alleged forgery, he was

told by Mr. Gallo that there was a “conflict of

interest,” and that Mr. Hynes should leave Sonido,

Inc.’s building. (R. 207 — 208 & 224 -227). Sonido,

Inc. refers to these events as a “discontinuance of

[Mark Hynes’ services.” (R. 308).

Consequently, Sonido, Inc. never paid any money

to Mark Hynes pursuant to the aforementioned

contract, although Mark Hynes continued to perform

his end of the agreement, and expended numerous

resources of time and money in reliance on the

contract. (R. 36, 165 — 166, 182, 211 — 212 & 239).

Instead of paying Mark Hynes, however, Sonido, Inc.

chose to treat Mark Hynes’ services as not being

company expenses. (R. 189). Sonido, Inc. attempted

to terminate its contract, refusing to pay Mark

Hynes pursuant to the contract, and ultimately

claimed that it had not breached its contract with

him, as it had made no Internet sales. (R. 286 &

309).

Mark Hynes started the present action against

Sonido, Inc. in 2000 alleging breach of contract. In

February of 2001, Sonido, Inc. moved to dismiss

Plaintiff-Appellant’s Complaint based on an alleged

release. The case was initially before the Lower

Court in 2001, and issue was raised as to the

instrument (a release) alleged to have been executed

by the Plaintiff-Appellant, but which the Plaintiff-

Appellant claimed was a forgery. (R. 9). The Lower

Court then directed the attorney for the Defendant-

Respondent to file an order with notice of entry with

the Legal Support Office to obtain a date on the

Referee’s calendar so that the Referee could make a

determination with respect to the genuineness of the

release. (R. 9). Such reference was made in January

of 2003, and the Referee, Marian Lewis, decided that

she could not resolve the issue — likewise neither

party made a motion to either confirm or disaffirm

the report. (R. 9 -10). The case remained dormant

thereafter until, in December of 2006, the Defendant

made the motion for summary judgment to which the

present appeal refers. (R. 10).

ARGUMENT

POINT ONE:

THE LOWER COURT COMMITTED ERROR WHEN IT

GRANTED SUMMARY JUDGMENT DESPITE ITS FINDING

THAT AN ISSUE OF FACT WAS RAISED IN BOTH THE

PAPERS OPPOSING AND SUPPORTING THE MOTION FOR

SUMMARY JUDGMENT

In granting summary judgment, the Lower Court

determined that “the papers that were submitted

both by the plaintiff and the defendant...raised an

issue of fact, the defendant, offering an affidavit from

an officer of the company indicating that no Internet

sales were made, and the Plaintiff submitting an

affidavit for himself indicating that he had evidence

of Internet sales made by the defendant.” (R. 10).

The Lower Court then went on to state, “ perhaps, a

hearing on that one issue — because it seems...that

that issue is determinative of the motion — would be

appropriate.” (R. 10).

Clearly, this is error on the part of the Lower

Court, as once a court has determined that there is

an issue of material fact, it must leave the

determination of those issues to the fact finder.

5 Sillman v. Twentieth Century-Fox Film Corp., 3 N.Y.2d 395,

404, 165 N.Y.S.2d 498, 505, 144 N.E.2d 387, 392 (1957); Esteve

v. Abad, 271 A.D. 725, 727, 68 N.Y.S.2d 322, 324 (1st Dep't

1947); Quinn v. Krumland, 179 A.D.2d 448, 449-50, 577

N.Y.S.2d 868 (1st Dep't 1992); Sommer v. Federal Signal Corp..,

79 N.Y.2d 540, 554, 583 N.Y.S.2d 957, 963, 593 N.E.2d 1365

When presented with a motion for summary

judgment, the function of a court is "not to determine

credibility or to engage in issue determination, but

rather to determine the existence or non-existence of

material issues of fact." Thus, if a single material

issue of fact is set forth in the moving or opposing

papers, a court must deny the motion and proceed to

trial.?7 While summary judgment is the procedural

equivalent of a trial,® a court does not conduct a trial,

but rather, must only determine whether there is an

issue to be tried.? This rule holds to the point where,

if a court, after analyzing the opposing papers, has

any doubt at all as to the existence of a material

issue of fact (or reasonably deems the facts to be

(1992); S. J. Capelin Associates, Inc. v. Globe Mfg. Corp., 34

N.Y.2d 338, 343, 357 N.Y.S.2d 478, 480, 313 N.E.2d 776, 777

(1974).

6 Quinn v. Krumland, 179 A.D.2d 448, 449-50, 577 N.Y.S.2d

868 (lst Dep't 1992); Sommer vy. Federal Signal Corp., 79

N.Y.2d 540, 554, 583 N.Y.S.2d 957, 963, 593 N.E.2d 1365

(1992); S. J. Capelin Associates, Inc. v. Globe Mfg. Corp., 34

N.Y.2d 338, 343, 357 N.Y.S.2d 478, 480, 313 N.E.2d 776, 777

(1974).

7 Federal Ins. Co. v. Automatic Burglar Alarm Corp., 208

A.D.2d 495, 617 N.Y.S.2d 53 (2d Dep't 1994); Rowan v. Brady,

98 A.D.2d 638, 469 N.Y.S.2d 711 (1st Dep't 1983) (reversing

grant of summary judgment on the grounds that the trial

court's resolution of the identified issue of fact went beyond

issue finding); Missan v. Schoenfeld, 95 A.D.2d 198, 465

N.Y.S.2d 706 (1st Dep't 1983); Wanger v. Zeh, 45 Misc. 2d 93,

256 N.Y.S.2d 227 (Sup 1965), aff'd, 26 A.D.2d 729, 1966 WL

9374 (3d Dep't 1966).

8 Falk v. Goodman, 7 N.Y.2d 87, 91, 195 N.Y.S.2d 645, 647, 163

N.E.2d 871, 873 (1959); Jones v. U.S. Healthcare, 282 A.D.2d

347, 723 N.Y.S.2d 478 (1st Dep't 2001).

9 Esteve v. Abad, 271 A.D. 725, 727, 68 N.Y.S.2d 322, 324 (1st

Dep't 1947).

arguable), then it must deny summary judgment.!°

If an issue is arguable, trial is needed and the case

may not be disposed of summarily.'!! Stated another

way, if the papers are such that reasonable minds

may disagree on what they lead to, a court's recourse

is to deny the motion and remit the parties to the

fact trier.!2. Furthermore, if different inferences

alone may reasonably be drawn from facts

themselves undisputed, the case must go to trial and

summary judgment must be denied. Gerard v.

Inglese, 11 A.D.2d 381, 206 N.Y.S.2d 879 (2d Dep't

1960). The same is true when a key issue turns on

the credibility of opposing affiants. Rickert v.

Travelers Ins. Co., 159 A.D.2d 758, 551 N.Y.S.2d 985

(3d Dep't 1990).

Furthermore, it is only after the movant makes a

prima facie showing of entitlement to judgment as a

matter of law that the burden shifts to the party

opposing the motion to produce proof sufficient to

require a trial of material questions of fact.!%

Termed another way, there exists a requirement that

the evidence produced by the movant "must

eliminate material and triable issues of fact," as well

as any other doubt regarding the existence of such

10 Phillips v. Joseph Kantor & Co., 31 N.Y.2d 307, 338 N.Y.S.2d

882, 291 N.E.2d 129, 67 A.L.R.3d 961 (1972); Nicholas Di

Menna & Sons v. City of New York, 301 N.Y. 118, 92 N.E.2d

918 (1950); Barrett v. Jacobs, 255 N.Y. 520, 175 N.E. 275

(1931); American Home Assur. Co. v. Amerford Intern. Corp..,

200 A.D.2d 472, 606 N.Y.S.2d 229 (1st Dep't 1994); Haner v. De

Vito, 152 A.D.2d 896, 544 N.Y.S.2d 90 (3d Dep't 1989).

1! Barrett v. Jacobs, 255 N.Y. 520, 175 N.E. 275 (1931).

12 Gerard v, Inglese, 11 A.D.2d 381, 206 N.Y.S.2d 879 (2d Dep't

1960).

13 Sommer v. Federal Signal Corp., 79 N.Y.2d 540, 555, 583

N.Y.S.2d 957, 593 N.E.2d 1365 (1992); Zuckerman vy. City of

New York, 49 N.Y.2d 557, 563, 427 N.Y.S.2d 595, 598, 404

N.F.2d 718 (1980).

issues.'4 Consequently, if the opposing papers

demonstrate that there are any material issues of

fact, or that the undisputed facts do not entitle the

movant to judgment as a matter of law, the motion

must be denied. !®

New York courts have always been conscious of the

need to balance the advantages of an effective

summary judgment procedure with a litigant's right

to a trial.16 This Constitutional perspective has led

to characterizations of summary judgment as a

"drastic remedy,"!7 zy "harsh remedy,"!8

"extraordinary relief,"!9 or as a remedy that should

be used only "sparingly."2° Thus, when saved for a

proper case, summary judgment is a_ perfectly

14 Onondaga Soil Testing, Inc. v. Barton, Brown, Clyde &

Loguidice, P. C., 69 A.D.2d 984, 416 N.Y.S.2d 116, 117 (4th

Dep't 1979); Winegrad v. New York University Medical Center,

64 N.Y.2d 851, 853, 487 N.Y.S.2d 316, 317-318, 476 N.E.2d

642, 643 (1985); Morejon v. Rais Const. Co., 7 N.Y.3d 203, 818

N.Y.S.2d 792, 851 N.E.2d 1143 (2006).

15 Winegrad v. New York University Medical Center, 64 N.Y.2d

851, 853, 487 N.Y.S.2d 316, 318, 476 N.E.2d 642, 643 (1985);

Cugini v. System Lumber Co., Inc., 111 A.D.2d 114, 489

N.Y.S.2d 492 (1st Dep't 1985).

16 Sillman v. Twentieth Century-Fox Film Corp., 3 N.Y.2d 395,

404, 165 N.Y.S.2d 498, 505, 144 N.E.2d 387, 392 (1957); Mason

v. Dupont Direct Financial Holdings, Inc., 302 A.D.2d 260, 262,

756 N.Y.S.2d 153, 155 (ist Dep't 2003); Birnbaum v. Hyman, 43

A.D.3d 374, 841 N.Y.S.2d 274 (1st Dep’t 2007).

17 Sillman v. Twentieth Century-Fox Film Corp., 3 N.Y.2d 395,

404, 165 N.Y.S.2d 498, 505, 144 N.E.2d 387, 392 (1957); Mason

v. Dupont Direct Financial Holdings. Inc., 302 A.D.2d 260, 262,

756 N.Y.S.2d 153, 155 (1st Dep't 2003).

18 Bakerian v. Horn, 21 A.D.2d 714, 249 N.Y.S.2d 646, 648 (3d

Dep't 1964).

19 Dykstra v. Windridge Condominium One, 175 A.D.2d 482,

572 N.Y.S.2d 527, 528 (3d Dep't 1991).

20 Christie's v. Gugliarda, 65 A.D.2d 714, 715, 410 N.Y.S.2d 592,

593 (1st Dep't 1978).

Constitutional weapon,?! and it does not deny the

parties their right to a trial — it merely ascertains

that there is nothing to try.22

In this vein of protecting the non-moving party’s

right to a trial, the court itself bears a special

responsibility to insure that the right to trial of a

litigant is protected; when considering a motion for

summary judgment, a court must construe the

evidence in the light most favorable to the non-

moving party. Weiss v. Garfield, 21 A.D.2d 156, 249

N.Y.S.2d 458 (8d Dep't 1964).28 It is specifically

because the function of a court on a motion for

summary judgment is issue finding rather than issue

determination (or credibility determining), that the

proof. submitted in opposition to the motion will be

accepted as true (and all reasonable inferences will

be drawn in favor of the opposing party).?4

Similarly, if a key fact turns on an item of evidence

whose admissibility at the trial is arguable,

summary judgment must be denied. Gallo Painting,

Inc. v. Aetna Insurance Co., 49 A.D.2d 746, 372

N.Y.S.2d 699 (2d Dep't 1975).

These principles underscore the purpose of

summary judgment; that "issue-finding rather than

“1 Birnbaum v. Hyman, 43 A.D.3d 374, 841 N.Y.S.2d 274 (1st

Dep’t 2007).

221d.

23 It should be noted that the Lower Court prevented testimony

at times, which would interfere with this function. (R. 15 & 22).

In one of these instances, when a witness representing the

Defendant-Respondent was equivocal as to an issue of material

fact, the Lower Court went as far as preventing the witness’

testimony by asserting the Defendant-Respondent’s position.

(R. 22).

24 Tortorello v. Carlin, 260 A.D.2d 201, 206, 688 N.Y.S.2d 64, 68

(1st Dep't 1999); Pantote Big Alpha Foods, Inc. v. Schefman,

121 A.D.2d 295, 503 N.Y.S.2d 58 (1st Dep't 1986).

issue-determination is the key to the procedure."

Talansky v. Schulman, 2 A.D.3d 355, 770 N.Y.S.2d

48, 51 (1st Dep't 2003); Esteve v. Abad, 271 A.D. 725,

727, 68 N.Y.S.2d 222, 324 (1st Dep't 1947).

As demonstrated by the preceding law, the Lower

Court committed clear error by attempting to

determine an issue with a hearing, instead of

delivering the issue to the fact-finder once it had

determined that an issue existed. (R. 10).

POINT Two:

THE LOWER COURT'S DETERMINATION THAT AN

ABSENCE OF SALES (IN A CONTRACT THAT AWARDED A

PERCENTAGE OF SALES TO THE PLAINTIFF) WAS

DISPOSITIVE ON THE ISSUE OF DAMAGES WAS ERROR

In this section of the Argument, it will be argued

that it was error for the Lower Court to hold that the

issue of whether or not Sonido, Inc. had made any

sales over the Internet was determinative of the

motion. (R. 10).

There are at least three reasons why a

determination of that question is not determinative

of the motion: (1) a cause of action for breach of

contract exists in cases where a party breaches its

implied obligation to use reasonable efforts to

perform its contractual obligations,25 and as Sonido,

Inc. never endeavored to sell any music over the

Internet, it breached its contract with the Plaintiff-

Appellant; (2) the Defendant-Respondent breached

the implied covenant of good faith and fair dealing by

never endeavoring to sell music over the Internet;26

25 Wood v. Lucy, Lady Duff-Gordon, 222 N.Y. 88, 118 N.E. 214

(1917); Middle Village Associates v. Pergament Home Centers,

Inc., 184 Misc. 2d 552, 708 N.Y.S.2d 840 (Sup 2000).

26 511 West 232nd Owners Corp. v. Jennifer Realty Co., 98

N.Y.2d 144, 746 N.Y.S.2d 131, 773 N.E.2d 496 (2002).

and finally, (3) the hearing, which the Lower Court

suggested as the means of determining breach, was

itself misguided as the Lower Court was not only

disallowed from determining issues of fact, but

sought to determine the issue on _ information

exclusively known by the Defendant-Respondent

(and knowable by the Plaintiff-Appellant only after

discovery).27

Because it is required that the movant establish

every material fact needed to prove that the movant

must succeed as a matter of law,?8 if the Defendant-

Respondent was in breach of the contract due to its

violating an implied duty (or on any other ground),

then the Defendant-Respondent (the movant) should

actually lose on the motion as a matter of law. It

follows then that merely determining whether or not

there were any sales made by Sonido, Inc. will not be

determinative of the issue of breach.

As a rule, a motion for summary judgment will be

granted only if, upon all the papers and proof

submitted, the cause of action or defense is

established sufficiently to warrant the court as a

matter of law in directing judgment in favor of any

party.29 It is the movant who must make a prima

27 Krupp v. Aetna Life & Cas. Co., 103 A.D.2d 252, 479 N.Y.S.2d

992 (2d Dep't 1984); Winegrad v. New York University Medical

Center, 64 N.Y.2d 851, 853, 487 N.Y.S.2d 316, 318, 476 N.E.2d

642, 643 (1985); Cugini v. System Lumber Co., Inc., 111 A.D.2d

114, 489 N.Y.S.2d 492 (ist Dep't 1985).

28 Balanca v. M. Foschi & Sons, Inc., 302 A.D.2d 416, 754

N.Y.S.2d 670, 671 (2d Dep't 2063); SRM Card Shop, Inc. v. 1740

Broadway Associates, L.P., 2 A.D.3d 136, 769 N.Y.S.2d 483, 486

(1st Dep't 2003); Colonna and Co., Inc. v. Citibank, N.A., 86

A.D.2d 789, 447 N.Y.S.2d 10 (1st Dep't 1982). These cases also

stand for the proposition that the proof submitted by the

movant be in admissible form.

29 Friends of Animals, Inc. v. Associated Fur Mfrs... Inc., 46

N.Y.2d 1065, 1067, 416 N.Y.S.2d 790, 791, 390 N.E.2d 298

facie showing of entitlement to judgment as a matter

of law before summary judgment may be granted.*

If the burden is not met, a party cannot establish

that they should be granted judgment on the grounds

that the law is undeniably in their favor, and

summary judgment should not be granted.*!

In what remains of this section, all three grounds

stated above for why the issue of whether or not

there were any sales is not determinative will be

examined in detail — establishing that the

Defendant-Respondent should not be granted

judgment as a matter of law because the law,

instead, favors a finding of breach on the part of the

Defendant-Respondent.

1. AS SONIDO, INC. NEVER ENDEAVORED TO SELL ANY

MUSIC OVER THE INTERNET, IT BREACHED ITS CONTRACT

(1979); Sommer v. Federal Signal Corp., 79 N.Y.2d 540, 555,

583 N.Y.S.2d 957, 593 N.E.2d 1365 (1992); Winegrad v. New

York University Medical Center, 64 N.Y.2d 851, 853, 487

N.Y.S.2d 316, 317-18, 476 N.E.2d 642 (1985); Zuckerman v.

City of New York, 49 N.Y.2d 557, 562, 427 N.Y.S.2d 595, 404

N.E.2d 718 (1980); Balanca v. M. Foschi & Sons, Inc., 302

A.D.2d 416, 754 N.Y.S.2d 670, 671i (2d Dep't 2003).

30 It is well settled that on a motion for summary judgment, the

movant must make a prima facie showing of entitlement to

judgment as a matter of law, tendering sufficient evidence to

eliminate any material issues of fact from the case. For

elaboration, please see Sommer v. Federal Signal Corp., 79

N.Y.2d 540, 555, 583 N.Y.S.2d 957, 593 N.E.2d 1365 (1992);

Zuckerman v. City of New York, 49 N.Y.2d 557, 563, 427

N.Y.S.2d 595, 598, 404 N.E.2d 718 (1980); Alvarez v. Prospect

Hosp., 68 N.Y.2d 320, 324, 508 N.Y.S.2d 923, 925, 501 N.E.2d

572, 574 (1986); Hyman v. Queens County Bancorp, Inc., 307

A.D.2d 984, 763 N.Y.S.2d 669 (2d Dep't 2003); Winegrad v. New

York University Medical Center, 64 N.Y.2d 851, 853, 487

N.Y.S.2d 316, 317-18, 476 N.E.2d 642 (1985).

31 Td.

WITH THE PLAINTIFF BY VIRTUE OF BREACHING THE

IMPLIED COVENANT TO USE REASONABLE EFFORTS:

In the present case, the Defendant-Respondent

has stated that it never endeavored to sell music

through the Internet, and that for that reason it

never breached its agreement with Mark Hynes. (R.

300 — 301, 309). As stated above, however, a cause of

action for breach of contract exists in cases where a

party breaches its implied obligation to use

reasonable efforts to perform its contractual

obligations. 82

In an analogous case to the one at bar, it was held

that in the case of a publisher that has exclusive

rights to publish a book, “the promise to publish ...

implies a good faith effort to promote the book. Zilg v.

Prentice-Hall, Inc., 717 F.2d 671, 680, 9 Media L.

Rep. (BNA) 2257, 43 A.L.R.4th 1163 (2d Cir. 1983).

32 Wood v. Lucy, Lady Duff-Gordon, 222 N.Y. 88, 118 N.E. 214

(1917); Middle Village Associates v. Pergament Home Centers,

Inc., 184 Misc. 2d 552, 708 N.Y.S.2d 840 (Sup 2000).

33 Please see also Bloor v. Falstaff Brewing Corp., 601 F.2d 609,

614, 26 U.C.C. Rep. Serv. 281 (2d Cir. 1979) (due to royalty

provision, “[e]ven without the best efforts clause [defendant]

would have been bound to make a good faith effort to see that

substantial sales of [plaintiff's] products were made ...”); G.

Golden Associates of Oceanside, Inc. v. Arnold Foods Co., Inc.,

870 F. Supp. 472, 476 (E.D.N.Y. 1994) (“where ongoing

commissions or royalties are to be paid in an exclusive

arrangement, a court will imply a covenant on the part of an

exclusive licensee/assignee to exploit the subject matter of the

license/assignment with due diligence ‘where such a covenant is

essential as a matter of equity to give meaning and effect to the

contract as a whole”); Don King Productions, Inc. v. Douglas,

742 F. Supp. 741, 767 (S.D.N.Y. 1990), on reargument, 742 F.

Supp. 786 (S.D.N.Y. 1990) (“In the context of agreements

granting exclusive promotional or licensing rights, the promoter

or exclusive licensee impliedly promises to ‘use reasonable

efforts to generate profits’ for the performer or licensor.”).

Furthermore, holding breach of contract for a

violation of the duty to use reasonable efforts is

especially appropriate in cases where a percentage of

the proceeds is the sole consideration that a the non-

breaching party will receive. Id.

2. THE DEFENDANT BREACHED THE IMPLIED COVENANT

OF GOOD FAITH AND FAIR DEALING BY NEVER

ENDEAVORING TO SELL MUSIC OVER THE INTERNET:

Aside from not endeavoring in any way to perform

its half of the bargain,34 Sonido, Inc. also shut Mark

Hynes out of the building where he was endeavoring

to perform on his portion of the contract (telling him

not to come back),#5 and presented Mark Hynes with

a forged document in an attempt to avoid its

contractual obligations.26 As these actions and

communications clearly thwart the reasonably

expected benefit afforded to Mark Hynes in his

contract, they breach implied covenant of good faith

and fair dealing — breaching the contract itself in the

process. 37

As a rule, all contracts executed in the State of

New York contain an implied covenant of good faith

and fair dealing in the course of performance. 511

West 232nd Owners Corp. v. Jennifer Realty Co., 98

N.Y.2d 144, 746 N.Y.S.2d 131, 773 N.E.2d 496

34 R. 300 — 301.

35 R. 166 & 230.

36 R. 9 & 207 — 208.

37 New York University v. Continental Ins. Co., 87 N.Y.2d 308,

318, 639 N.Y.S.2d 283, 289, 662 N.E.2d 763, 108 Ed. Law Rep.

342 (1995); Harris v. Provident Life and Acc. Ins. Co., 310 F.3d

73, 80 (2d Cir. 2002); Fasolino Foods Co., Inc. v. Banca

Nazionale del Lavoro, 961 F.2d 1052, 1056, 17 U.C.C. Rep.

Serv. 2d 561 (2d Cir. 1992).

(2002).38 The duty to act in good faith under a

contract is not a duty separable from the

performance of the contract itself. Network

2004 WL 1837349 (S.D.N.Y. 2004). Accordingly, a

breach of the implied covenant of good faith and fair

dealing is a breach of the underlying contract and

does not usually give rise to a separate and

independent claim.°9 A reason for this is that the

covenant is in aid and furtherance of other terms of

the parties' agreement.*° Its purpose is to further

that agreement by protecting a promisee against

breach of the reasonable expectations derived from

the agreement. ARI and Co., Inc. v. Regent Intern.

Corp., 273 F. Supp. 2d 518, 522 (S.D.N.Y. 2003); TVT

Records v. Island Def Jam Music Group, 244 F. Supp.

2d 263, 278 (S.D.N.Y. 2003).

The covenant allows a court to read into a

contract any promise that a reasonable person in the

position of the promisee would justifiably believe was

included within the contract. New York University v.

Continental Ins. Co., 87 N.Y.2d 308, 318, 639

N.Y.S.2d 2838, 289, 662 N.E.2d 763, 108 Ed. Law Rep.

342 (1995).4!

38 Please see also Smith v. General Acc. Ins. Co., 91 N.Y.2d 648,

652-53, 674 N.Y.S.2d 267, 269, 697 N.E.2d 168 (1998); Dalton

v. Educational Testing Service, 87 N.Y.2d 384, 389, 639

N.Y.S.2d 977, 979, 663 N.E.2d 289 (1995).

39 Harris v. Provident Life and Acc. Ins. Co., 310 F.3d 73, 80 (2d

Cir. 2002); Fasolino Foods Co., Inc. v. Banca Nazionale del

Lavoro, 961 F.2d 1052, 1056, 17 U.C.C. Rep. Serv. 2d 561 (2d

Cir. 1992).

40 Murphy v. American Home Products Corp., 58 N.Y.2d 293,

304, 461 N.Y.S.2d 232, 237, 448 N.E.2d 86, 31 Fair Empl. Prac.

Cas. (BNA) 782, 115 L.R.R.M. (BNA) 4953, 31 Empl. Prac. Dec.

(CCH) P 33607, 98 Lab. Cas. (CCH) P 55407 (1983).

4! Please see also 511 West 232nd Owners Corp. v. Jennifer

Realty Co., 98 N.Y.2d 144, 153, 746 N.Y.S.2d 131, 135-136

In particular, the covenant. addresses. the

situation where one party attempts to undermine the

contract by taking action that is not explicitly

addressed in or forbidden by the language of the

contract. Concesionaria DHM, S.A. v. International

Finance Corp., 307 F. Supp. 2d 553, 564 (S.D.N.Y.

2004). 42 The implied covenant deems it an

undertaking on the part of each party that it will not

intentionally or purposely do anything to prevent the

other party from performing its obligations under the

contract.43

Furthermore, a party can breach the implied

covenant even if its conduct does not contravene the

express provisions within the four corners of the

written agreement,4+ as the covenant embraces a

pledge that neither party will do anything that will

(2002); Dalton v. Educational Testing Service, 87 N.Y.2d 384,

389, 639 N.Y.S.2d 977, 979, 663 N.E.2d 289 (1995); Rowe v.

Great Atlantic & Pac. Tea Co., Inc., 46 N.Y.2d 62, 69, 412

N.Y.S.2d 827, 831, 385 N.E.2d 566 (1978).

42 Sauer v. Xerox Corp., 95 F. Supp. 2d 125, 132 (W.D.N.Y.

2000), judgment aff'd, 5 Fed. Appx. 52 (2d Cir. 2001) (“{S]uch a

claim may be brought ... only where one party's conduct, though

not breaching the terms of the contract in a technical sense,

nonetheless deprived the other party of the benefit of its

bargain.”); Restatement (Second) of Contracts § 205, comments

a, c (“Good faith performance or enforcement of a contract

emphasizes faithfulness to an agreed common purpose and

consistency with the justified expectations of the other party

aon,

43 Grad v. Roberts, 14 N.Y.2d 70, 75, 248 N.Y.S.2d 633, 637, 198

N.E.2d 26 (1964); Kader v. Paper Software, Inc., 111 F.3d 337,

342, 12 I.E.R. Cas. (BNA) 1329 (2d Cir. 1997); Carvel Corp. v.

Diversified Management Group, Inc., 930 F.2d 228, 230 (2d Cir.

1991). This fundamental understanding is rooted in notions of

common sense and fairness. TVT Records v. Island Def Jam

Music Group, 244 F. Supp. 2d 263, 278 (S.D.N.Y. 2003).

44 Bear, Stearns Funding, Inc. v. Interface Group-Nevada, Inc.,

361 F. Supp. 2d 283, 298 (S.D.N.Y. 2005).

have the effect of destroying or injuring the right of

the other party to receive the fruits of the contract.

511 West 232nd Owners Corp. v. Jennifer Realty Co.,

98 N.Y.2d 144, 746 N.Y.S.2d 131, 773 N.E.2d 496

(2002).45 In this regard, a party's action implicates

the covenant when the party acts in such a way as to

impair the value of the contract for the other party

such that it may be assumed that the action is

inconsistent with the interest of the parties.4® As a

corollary to this principle of law, the implied

covenant obligates the promisor only to allow the

promisee to enjoy the expected benefits of the

promised performance.4? Beninati v. F.D.I.C., 55 F.

Supp. 2d 141, 149, 42 U.C.C. Rep. Serv. 2d 623

(E.D.N.Y. 1999). 48

The Defendant-Respondent admittedly never

pursued the sale of anything whatsoever over the

Internet. (R. 300 —- 301). Furthermore, the

Defendant-Respondent attempted to discontinue its

contract‘? and introduced a fraudulent instrument to

aid it in discontinuing the contract. (R. 9 & 207 —

208). In light of the foregoing, the Defendant-

45 Please see also Dalton v. Educational Testing Service, 87

N.Y.2d 384, 389, 639 N.Y.S.2d 977, 979, 663 N.E.2d 289 (1995);

Kirke La Shelle Co. v. Paul Armstrong Co., 263 N.Y. 79, 87, 188

N.E. 163, 167 (1933).

46 Bank of China v. Chan, 937 F.2d 780, 789, 15 U.C.C. Rep.

Serv. 2d 162 (2d Cir. 1991); Interpublic Group of Companies,

Inc. v. Fratarcangelo, Fed. Sec. L. Rep. (CCH) P 92234, 2002

WL 31682389 (S.D.N.Y. 2002).

47 The Lower Court, however, seemed to find no problem in the

Defendant-Appellant using other avenues for the sale of music

through the Internet while the Plaintiff-Appellant received a

forfeiture. (R. 14 — 20 & 30).

48 Spanierman Gallery Profit Sharing Plan v. Arnold, 1997 WL

139522 (S.D.N.Y. 1997); Village On Canon vy. Bankers Trust

Co., 920 F. Supp. 520, 535 (S.D.N.Y. 1996).

49 R. 166 & 230.

Appellant clearly breached its duty of good faith and

fair dealing, thereby breaching the contract as a

whole.5

3. THE HEARING THAT THE LOWER COURT SUGGESTED

AS THE MEANS OF DETERMINING BREACH WAS ITSELF

MISGUIDED, AS THE LOWER COURT WAS NOT ONLY

DISALLOWED FROM DETERMINING ISSUES OF FACT, BUT

SOUGHT TO DETERMINE THE MOTION ON INFORMATION

THAT COULD ONLY BE KNOWN TO THE DEFENDANT-

APPELLANT:

As stated supra in the first point of the

Argument, the Lower Court erred in attempting to

determine issues of fact. Furthermore, it will be

argued in this section that the information that it

sought could not have been produced by the Plaintiff-

Appellant during the hearing, as the information

sought (i.e. whether or not internet sales where ever

made by Sonido, Inc.) was in the exclusive possession

of the Defendant-Respondent. (R. 287 — 288).

As a rule, if a key fact in issue is within the exclusive

knowledge of the moving party, the motion for

summary judgment must be denied. Krupp v. Actna

Life & Cas. Co., 103 A.D.2d 252, 479 N.Y.S.2d 992

(2d Dep't 1984). Where the opposing party alleges

that facts necessary to oppose the motion are in the

exclusive possession of the movant! or that the

50 New York University v. Continental Ins. Co., 87 N.Y.2d 308,

318, 639 N.Y.S.2d 283, 289, 662 N.E.2d 763, 108 Ed. Law Rep.

342 (1995); Harris v. Provident Life and Acc. Ins. Co., 310 F.3d

73, 80 (2d Cir. 2002); Fasolino Foods Co., Inc. v. Banca

Nazionale del Lavoro, 961 F.2d 1052, 1056, 17 U.C.C. Rep.

Serv. 2d 561 (2d Cir. 1992).

51 Kraeling v. Leading Edge Elec., 2 A.D.3d 789, 770 N.Y.S.2d

382 (2d Dep't 2003); Actna Cas. & Sur. Co. v. First Nat. City

Bank, 53 A.D.2d 535, 384 N.Y.S.2d 188 (ist Dep't 1976).

opposing party has not had sufficient time to obtain

disclosure of these facts, a court generally denies the

motion.52 In more specific terms, where a key fact in

issue is in the exclusive knowledge of the movant, a

court will either deny the motion, without prejudice,

or refrain from ruling on the motion until the

opposing party obtains further’ disclosure.®%

"[Slummary judgment is not justified where there

are likely to be issues that depend upon knowledge in

the possession of the moving party for judgment,

which might well be disclosed by cross-examination

or examination before trial."°4

Taking this principle into account, even ignorance

of a fact will be considered a sufficient response,

when it is shown that the ignorance is unavoidable.

Overseas Reliance Tours & Travel Serv., Inc. v.

Sarne Co., 17 A.D.2d 578, 237 N.Y.S.2d 416 (1st

Dep't 1963). In the present case, the Plaintiff-

Appellant was asked questions that he could not

have possibly known the answer to, and even the

Court acknowledged that a possibility existed for the

Defendant-Appellant to be liable when it stated that

a possibility existed that it may not be liable. (R. 18).

As mentioned, the Lower Court made the scrutiny

of the Plaintiff-Appellant’s evidence as to whether

the Defendant-Respondent had made any sales the

center of the hearing. (R. 10). Despite the fact that

the Plaintiff-Appellant produced evidence of Sonido

52 Bank of New York v. Hyland, 130 A.D.2d 942, 516 N.Y.S.2d

140 (4th Dep't 1987).

53 Mournet v. Educational and Cultura! Trust Fund of Electrical

Industry, 303 A.D.2d 474, 756 N.Y.S.2d 433 (2d Dep't 2003):

Classic Moments Co. v. Akata, 176 A.D.2d 567, 574 N.Y.S.2d

740 (1st Dep't 1991).

54 Terranova v. Emil, 20 N.Y.2d 493, 497, 285 N.Y.S.2d 51, 54,

231 N.E.2d 753, 755 (1967); Baldasano v. Bank of New York,

199 A.D.2d 184, 185, 605 N.Y.S.2d 293 (1st Dep't 1993).

having sold its music through the Internet,®> and

even after the Defendant-Respondent had stated on

the stand that it might have sold music over the

Internet,56 the Lower Court actively directed the

questioning of the Plaintiff-Appellant toward a line

of questioning, that if answered honestly, could not

possibly determine the issue before the Court, as it

was not the Plaintiff-Appellant who had knowledge

of that issue, but the Defendant-Respondent. (R. 15 —

18). Although it is the movant who must submit

evidence that completely removes any issue of fact,5?

the Defendant-Appellant only produced affidavits,

which were met by the affidavit of the Plaintiff-

Appellant. And though it was the movant’s burden

to establish its case,59 the Court sought to extract

absolute certainty from the non-moving party in a

situation where an issue of material fact had been

raised and even the movant required a look at its

records. (R. 29 — 30).

Given the law referenced in the body of the above-

stated point of the Argument, the line of questioning

directed by the Lower Court, which persisted in the

presence of material issues of fact being raised, was

clear error.

POINT THREE:

55 R. 290.

56 Maggie Burbano was equivocal as to whether Sonido, Inc. had

received money from the Internet sale of music, and stated that

she would have to check her records to know for certain. (R. 29

— 30).

57 Winegrad v. New York University Medical Center, 64 N.Y.2d

851, 853, 487 N.Y.S.2d 316, 317-318, 476 N.E.2d 642, 643

(1985); Morejon v. Rais Const. Co., 7 N.Y.3d 203, 818 N.Y.S.2d

792, 851 N.E.2d 1143 (2006).

AN ISSUE OF MATERIAL FACT WAS RAISED AS TO

AMBIGUITY IN THE CONTRACT, MAKING SUMMARY

JUDGMENT INAPPROPRIATE

Despite seeking to limit the scope of the hearing

to only one issue,®® and despite conflicting

interpretations of the contract being raised in both

the answering and supporting papers on the

motion,®! the Lower Court’ produced '= an

interpretation of the contract that seemed to direct

its determination of the scope of the hearing. (R. 11

& 30). In the section of the argument that follows it

will be argued that this was error.

60 R. 10.

61 R. 295. It should be noted that this statement by Stuart A.

Jackson, Esq. is not acceptable evidence on a summary

judgment motion (as it is an unsworn statement made by

someone with no personal knowledge), and although it makes

reference to the circumstances under which the contract was

made, it cannot provide evidence. South Bay Center, Inc.

Butler, Herrick & Marshall, 43 Misc.2d 269, 250 N.Y.S.2d 363

(Sup.Ct., Nassau County, 1964). Affidavits on any motion

should be made only by those with knowledge of the facts, and

nowhere is this rule more faithfully applied than on the motion

for summary judgment, as the attorney's affidavit, unless the

attorney happens to have first-hand knowledge of the facts—

which is the exception rather than the rule—has no probative

force. Id. Affidavit and sworn testimony evidence, however, was

provided by Mark Hynes concerning the circumstances under

which the contract arose. (R. 200 — 204, 206 & 286).

Furthermore, Mr. Jackson’s is incorrect in stating that the

interpretation presented by the Plaintiff-Appellant is new as

the Plaintiff-Appellant’s Verified Complaint included a

definition of “Internet Sales” that included licensing

agreements. (R. 296 & 37). The Defendant-Respondent also fails

to provide evidence of usage of trade in its papers supporting

the Motion. It is only the Plaintiff-Appellant who provides

evidence of usage of trade by providing the exhibits annexed to

Mark Hynes’ Affidavit serving as examples of what the trade

refers to as “Internet sales.” (R. 287 & 290 — 292).

As mentioned in the first point of the Argument,

if there is conflicting extrinsic evidence regarding the

parties' intent (which presents a disputed issue of

fact), a trial is required to determine that intent

because a court, at the summary judgment stage,

should only identify issues, and not resolve them.®2

Regarding the issue of ambiguity in particular,

although the meaning of a contract is usually a

question of law,®° when there is an issue of fact

regarding whether a term or clause in said contract

is ambiguous, or regarding whether a determination

of parties' intent depends upon the credibility of

extrinsic evidence, or if a choice can be made among

competing inferences to be drawn from extrinsic

evidence, then such must be decided by a trier of

fact.64 Indeed, the rule changes when a contract is

62 James v. Jamie Towers Housing Co., Inc., 294 A.D.2d 268,

275, 727 N.Y.S.2d 85, 92 (1st Dep’t 2002); Burger King Corp. v.

Horn & Hardart Co., 893 F.2d 525, 527 (2d Cir. 1990).

63 Mallad Const. Corp. v. County Fed. Sav. & Loan Ass'n, 32

N.Y.2d 285, 291, 344 N.Y.S.2d 925, 930, 298 N.E.2d 96, 99

(1973); Long Island R. Co. v. Northville Industries Corp., 41

N.Y.2d 455, 461, 393 N.Y.S.2d 925, 929, 362 N.E.2d 558, 561

(1977).

64 State v. R.J. Reynolds Tobacco Co., 304 A.D.2d 379, 761

N.Y.S.2d 596 (ist Dept 2003); Amusement Business

Underwriters, a Div. of Bingham & Bingham, Inc. v. American

International Group, Inc., et al., 66 N.Y.2d 878, 880, 489 N.F.2d

729° (1985); Ehrlich v. Abrams Instrument Corp., 385 N.Y.S.2d

299, (1st Dep’t 1976); Briarwood Towers 85th Co. v. Guterman,

523 N.Y.S.2d 98 (1st Dep’t 1988); Time Warner Entertainment

Co., L.P. v. Brustowsky, 634 N.Y.S.2d 82 (1st Dep’t 1995);

Steckler_v. Steckler, 433 N.Y.S.2d 127 (1st Dep’t 1980); Tni-

State Pipe Lines Corp. v. Sinclair Refining Co., 264 N.Y.S.2d

138 (1st Dep’t 1965). It should also be noted that if a key fact

turns on an item of evidence whose admissibility at the trial is

arguable, summary judgment must also be denied. Gallo

Painting, Inc. v. Aetna Insurance Co., 49 A.D.2d 746, 372

N.Y.S.2d 699 (2d Dep't 1975).

deemed ambiguous, and extrinsic evidence is not

only admissible, but resolution o* the ambiguity itself

becomes a fact issue which precludes summary

judgment.®©

In determining ambiguity, a contractual term is

ambiguous where it may be ascribed two conflicting

interpretations.®* Another way of stating this rule is

te say that the language of a contract is ambiguous if

it is capable of more than one meaning when viewed

objectively by a reasonably intelligent person who

has examined the context of the entire integrated

agreement.®7 Furthermore, the reasonably

intelligent person in question is considered to be

cognizant of the customs, practices, usages, and

terminologies as’ generally understood in the

particular trade or business to which the contract

pertains.

In circumstances where two different meanings

arise in the language of the contract, due to

subsequent events, and when those different

meanings could apply equally to two different things

65 Please see generally, Pellot v. Pellot, 305 A.D.2d 478, 481,

759 N.Y.S.2d 494, 497 (2d Dep't 2003).

66 Greenfield v. Philles Records, Inc., 98 N.Y.2d 562, 570, 750

N.Y.S.2d 565, 570, 780 N.E.2d 166 (2002); Teichman by

Teichman v. Community Hosp. of Western Suffolk, 87 N.Y.2d

514, 520, 640 N.Y.S.2d 472, 474, 663 N.E.2d 628, 20 Employee

Benefits Cas. (BNA) 1532 (1996).

67 Lucente v. International Business Machines Corp., 310 F.3d

243, 257, 29 Employee Benefits Cas. (BNA) 2414 (2d Cir. 2002);

Collins v. Harrison-Bode, 303 F.3d 429, 433 (2d Cir. 2002);

Golden Pacific Bancorp v. F.D.LC., 273 F.3d 509, 516 (2d Cir.

2001).

68 E.R. Squibb & Sons, Inc. v. Lloyd's & Companies, 241 F.3d

154, 174, 48 Fed. R. Serv. 3d 1249 (2d Cir. 2001); Alexander &

Alexander Services, Inc. v. These Certain Underwriters at

Lloyd's, London, England, 136 F.3d 82, 86 (2d Cir. 1998);

Palmieri v. Alistate Ins. Co., 445 F.3d 179, 191 (2d Cir. 2006).

or subject matters, then a latent ambiguity is said to

exist in the contract, and extrinsic evidence is

admissible to show what the parties intended.®9

The issue of latent ambiguity is illustrated by a

case where a consultant entered into a contract with

a corporation in which the consultant's compensation

depended upon the profitability of the corporation

and its parent and subsidiaries on a consolidated

basis. Lazar v. Nico Industries, Inc., 164 A.D.2d 788,

559 N.Y.S.2d 326 (1st Dep't 1990). During the term

of the contract, the corporation was acquired. The

acquired entity, consolidated on a stand alone basis,

was profitable; the acquirer, as a consolidated entity,

was not. When the consultant was not paid, it sued

for its compensation. The Court ruled that the

consultant's claim could not be decided on summary

judgment because the contract had a_ latent

ambiguity. Lazar v. Nico Industries, Inc., 164 A.D.2d

788, 559 N.Y.S.2d 326 (1st Dep't 1990). Because of

subsequent events that the parties might not have

considered at the time of contracting, it was unclear

whether the parties intended the consultant's

compensation to be dependent upon the profitability

on a consolidated basis of the entity with which the

consultant contracted or the entity that contract

party became part of as the result of the subsequent

merger. Lazar v. Nico Industries, Inc., 164 A.D.2d

788, 559 N.Y.S.2d 326 (1st Dep't 1990).

The responsibility of a court in this matter is

clear; in determining whether contractual language

69 Leather Form S.R.L. v. Knoll, Inc., 2006 WL 3147487, * 2 n.1

(2d Cir. 2006); Petrie v. Trustees of Hamilton College, 158 N.Y.

458, 464, 53 N.E. 216 (1899). Additionally, the parole evidence

rule is usually inapplicable in cases of ambiguity so long as the

evidence presented is not in conflict with the express terms of

the contract. Stage Club Corp. v. West Realty Co., 212 A.D.2d

458, 459, 622 N.Y.S.2d 948, 950-951 (ist Dep’t 1995)

is ambiguous, a court should examine the entire

contract and the circumstances under which it was

executed as well as the relation of the parties.”

Form should not prevail over substance and a

sensible meaning of the language should be sought.7!

The particular words in the contract should not be

considered in isolation from the context of the

agreement but must be viewed in light of the

obligation as a whole and the intention of the

parties.’72 Similarly, the parties’ intent may not

usually be discerned by merely culling distinct

provisions out of an entire agreement for the sounder

approach is to consider the entirety of the agreement

in the context of the parties' relationship and

circumstances. Matter of Riconda, 90 N.Y.2d 733,

738, 665 N.Y.S.2d 392, 396, 688 N.E.2d 248 (1997).

Furthermore, the contract should be examined in

light of the circumstances that existed as of the date

of its execution, not the date of its alleged breach.”

The goal is to give the instrument a practical

interpretation that will satisfy the parties'

reasonable expectations at the time of contracting.”

In this regard, any form of evidence, documentary

or otherwise, may be considered on a motion for

70 Kass v. Kass, 91 N.Y.2d 554, 566, 673 N.Y.S.2d 350, 356-57,

696 N.E.2d 174 (1998); RJE Corp. v. Northville Industries

Corp., 329 F.3d 310, 314 (2d Cir. 2003).

71 Kass v. Kass. 91 N.Y.2d 554, 566, 673 N.Y.S.2d 350, 356-57,

696 N.E.2d 174 (1998).

72 Kass v. Kass, 91 N.Y.2d 554, 566, 673 N.Y.S.2d 350, 356, 696

N.E.2d 174 (1998) (citing William C. Atwater & Co. v. Panama

R. Co., 246 N.Y. 519, 524, 159 N.E. 418, 419 (1927)).

73 X.L.O. Concrete Corp. v. John T. Brady and Co., 104 A.D.2d

181, 184, 482 N.Y.S.2d 476, 479, 21 Ed. Law Rep. 1327 (lst

Dep't 1984), order aff'd, 66 N.Y.2d 970, 498 N.Y.S.2d 799, 489

N.E.2d 768, 30 Ed. Law Rep. 820 (1985).

74 Gonzalez v. Norrito, 256 A.D.2d 440, 682 N.Y.S.2d 100 (2d

Dep't 1998).

summary judgment.” Affidavits are a primary

source of proof, however, and depositions and written

admissions are also specifically mentioned.7®

Because two separate interpretations concerning

the meaning of “Internet” were brought before the

Lower Court in the both the papers in support of the

motion, as well as those in opposition to the motion,

the issue of ambiguity was raised before the Lower

Court on the motion for summary judgment,7’? and

should consequently not been decided by the Court.

James v. Jamie Towers Housing Co., Inc., 294 A.D.2d

268, 275, 727 N.Y.S.2d 85, 92 (1st Dep’t 2002);

Burger King Corp. v. Horn & Hardart Co., 893 F.2d

525, 527 (2d Cir. 1990).

Reading the affidavits and memorandums of the

Defendant-Respondent, it is pointed out that Mark

Hynes has an interpretation of the contract that the

Defendant-Respondent disagrees with. (R. 295 —-

297). The Defendant-Respondent then proceeds to

call the credibility of the Plaintiff-Appeilant’s

interpretation into question into question, referring

to the circumstances surrounding the formation of

the contract, and the “plain meaning’’® of the

contract. (R. 295 — 297).

75 Wilkinson v. Skinner, 34 N.Y.2d 53, 356 N.Y.S.2d 15, 312

N.E.2d 158 (1974).

76 CPLR 3212(b).

77 R, 286 — 288 & 295 — 297.

78 It is interesting to note that although Stuart A. Jackson,

Esq., in the section of the record cited, claims to support a

“plain meaning” interpretation of the contract that limits the

sales to which the Plaintiff-Appellant would have a share to

sales made directly over a website. (R. 296 -297). Nowhere, in

the contract, however, does the term “website” ever appear. (R.

74). One major difficulty for the Defendant-Appellant’s position,

which can be taken from the inferences that arise from the facts

of the case, is that there was not a single website being

developed, but many. (R. 51, 53, 61, 63, 300 & 319 — 321).

As stated in the body of the above-stated section

of the Argument, the conflicting assertions raised by

both parties call up an issue of material fact, and it

was thereby improper for the Lower Court to grant

summary judgment.

POINT FOUR:

THE LOWER ©OURT ERRED IN GRANTING SUMMARY

JUDGMENT BECAUSE A REVIEW OF THE RECORD, AS

WELL AS THE MOVING PAPERS, REVEALED CLEAR

BREACH OF CONTRACT BY THE DEFENDANT

Related to the issue of whether or not an absence

of sales is determinative (Point Number Two in the

Argument), and sharing relatively the same evidence

in its support from the record, is the issue of whether

the record reveals that Sonido, Inc. breached its

contract with Mark Hynes by repudiation.

To understand, however, whether the Lower

Court committed error in granting summary

judgment despite the presence of repudiation in the

record,’7? an analysis should be made of both

principles of law (the principle of searching the

record and the principle of repudiation) under New

York precedent.

1. SEARCHING THE RECORD:

Because a motion for summary judgment

“searches the record” under CPLR 3212(b), a court is

enabled to grant judgment in favor of the party

moved against even in the absence of a cross-motion

by that party.8° There is some indication, that even

though the language of CPLR 3212 is permissive,

79 R. 166, 207 — 208, 227 & 230.

80 CPLR 3212(b).

that a searching of the record on a summary

judgment motion may be mandatory. Wilkinson v.

Skinner, 34 N.Y.2d 53, 356 N.Y.S.2d 15, 312 N.E.2d

158 (1974).8! Thus, on a motion for summary

judgment, the motion court's function is to "go behind

[the pleadings] to the very substance of the action

and distinguish matters of law from matters of fact,

material issues from immaterial ones."82 In this

way, courts will determine motions for summary

judgment by examining the "facts appearing in the

record without regard to technical defects or

deficiencies in [the] pleadings."%3 Summary

judgment essentially requires a court to determine

whether the movant's papers justify finding, as a

matter of law, "that there is no defense to the cause

of action or that the cause of action or defense has no

merit.''84

2. REPUDIATION:

A repudiation (also referred to as an anticipatory

breach) occurs where one party to a_ contract

repudiates its contractual obligations prior to the

time designated for performance and before it has

81 Tt has even been known to take place on appeal. Wiseman v.

Knaus, 24 A.D.2d 869, 264 N.Y.S.2d 331 (2d Dep't 1965).

82 Wanger v. Zeh, 45 Misc. 2d 93, 94, 256 N.Y.S.2d 227, 229-30

(Sup 1965), aff'd, 26 A.D.2d 729, 1966 WL 9374 (3d Dep't 1966);

S. J. Capelin Associates, Inc. v. Globe Mfg. Corp., 34 N.Y.2d

338, 343, 357 N.Y.S.2d 478, 482, 313 N.E.2d 776, 778 (1974);

Borchardt _v. New York Life Ins. Co., 102 A.D.2d 465, 477

N.Y.S.2d 167 (1st Dep't 1984), order aff'd, 63 N.Y.2d 1000, 483

N.Y.S.2d 1012, 473 N.E.2d 262 (1984).

83 Auto Body Federation of Empire State, Inc. v. Lewis, 80

A.D.2d 593, 436 N.Y.S.2d 32, 33 (2d Dep't 1981); Irving Finance

Corp. v. Wegener, 30 A.D.2d 958, 959, 294 N.Y.S.2d 463, 465

(1st Dep't 1968).

84 CPLR 3212(b).

received all the consideration due to it under the

contract.> The repudiation must rise to the level of

a clear and unqualified refusal to perform the entire

contract. In such circumstances, the non-

repudiating party may assert a claim for total

breach.8?

The reason for this is that a party may not both

affirm a contract by accepting its benefits while

disaffirming it by repudiating it.88 Thus, when a

promisor manifests its intent not to perform its

contractual obligations, the other party can treat the

repudiation as an anticipatory breach of the

contract.89 This doctrine reflects the policy that

when a party has communicated an unequivocal

intent not to perform its contractual obligations, it

does not benefit the injured party to require that it

wait until actual breach occurs before commencing a

lawsuit.9° As the Court of Appeals has noted, a party

85 Long Island R. Co. v. Northville Industries Corp., 41 N.Y.2d

455, 463, 393 N.Y.S.2d 925, 930, 362 N.E.2d 558 (1977); Wester

v. Casein Co. of America, 206 N.Y. 506, 513-14, 100 N.E. 488,

490 (1912); Norcon Power Partners, L.P. v. Niagara Mohawk

Power Corp., 92 N.Y.2d 458, 463, 682 N.Y.S.2d 664, 667, 705

N.E.2d 656, 37 U.C.C. Rep. Serv. 2d 323 (1998).

86 De Lorenzo v. Bac Agency Inc., 256 A.D.2d 906, 908, 681

N.Y.S.2d 846, 848 (3d Dep't 1998); Palazzetti_ Import/Export,

Inc. v. Morson, 2001 WL 1568317 (S.D.N.Y. 2001), judgment

aff'd, 54 Fed. Appx. 698 (2d Cir. 2002).

87 Norcon Power Partners, L.P. v. Niagara Mohawk Power

Corp., 92 N.Y.2d 458, 462-63, 682 N.Y.S.2d 664, 667, 705

N.E.2d 656, 37 U.C.C. Rep. Serv. 2d 323 (1998).

88 Sofi Classic S.A. de C.V. v. Hurowitz, 444 F. Supp. 2d 231

(S.D.N.Y. 2006).

89 Silver Air v. Aeronautic Development Corp. Ltd., 656 F.

Supp. 170, 178 (S.D.N.Y. 1987); Net2Globe Intern., Inc. v. Time

Warner Telecom of New York, 273 F. Supp. 2d 436, 456

(S.D.N.Y. 2003).

99 Rachmani Corp. v. 9 East 96th Street Apartment Corp., 211

A.D.2d 262, 266, 629 N.Y.S.2d 382, 385 (1st Dep't 1995).

who renounces a contract cannot complain if he or

she is immediately sued for compensation in

damages by the other party.2! As a consequence of

‘“*g reasoning, if a party has entirely repudiated its

obligations under an agreement, it may not, in the

usual situation, rely upon the failure of the other

party to comply with a provision in the repudiated

contract that it provide notice of contemplated legal

action.92 Thus, the declaration by one party that

material obligations imposed by a contract will not

be performed relieves the other party of any duty to

perform its obligations under the contract.% In

effect, an anticipatory breach by one party is the

discharge of the other party from its obligations

under the agreement.%4 In addition, when it becomes

clear that one party will not live up to the terms of

the contract, the aggrieved party is relieved from the

performance of future acts or conditions precedent.%°

The non-repudiating party is at liberty to consider

itself absolved from any future performance and it

does not have to waste resources in preparing to

perform.%% There is authority that once a

91 Ga Nun v. Palmer, 202 N.Y. 483, 490, 96 N.E. 99, 100 (1911)

(citing Hochster v. De La Tour, 2 E&B 678, 118 Eng. Rep. 922

(Queen's Bench 1853)); Rachmani Corp. v. 9 East 96th Street

Apartment Corp., 211 A.D.2d 262, 266, 629 N.Y.S.2d 382, 385

(ist Dep't 1995).

92 Utility Garage Corp. v. National Biscuit Co., 71 A.D.2d 578,

418 N.Y.S.2d 87 (1st Dep't 1979).

%3 Stadtmauer v. Brel Associates IV, L.P., 270 A.D.2d 59, 704

N.Y.S.2d 237 (1st Dep't 2000).

%4 Computer Possibilities Unlimited, Inc. v. Mobil Oil Corp., 301

A.D.2d 70, 78, 747 N.Y.S.2d 468, 475 (1st Dep't 2002).

% Sunshine Steak, Salad & Seafood, Inc. v. W.I.M. Realty, Inc.,

135 A.D.2d 891, 522 N.Y.S.2d 292 (3d Dep't 1987).

9% Ga Nun v. Palmer, 202 N.Y. 483, 490, 96 N.E. 99, 102 (1911);

accord Heart Const. Corp. v. Gower, 6 Misc. 3d 1018(A), 800

N.Y.S.2d 347 (Dist. Ct. 2004); American List Corp. v. U.S. News

repudiation occurs, nothing the non-repudiating

party does can constitute a breach of contract even if

the contract technically remained in effect after the

repudiation.2?7 Thus, when a party anticipatorily

breaches an executory contract, the non-breaching

party may either sue immediately or wait until the

time set for performance. %

Because the doctrine of anticipatory breach

evolved as a defense to performance by the non-

repudiating party,9° the doctrine generally has been

limited to bilateral contracts embodying some

mutual and interdependent obligations or some

interdependency of performance.!°° In other words,

it applies to contracts that contemplate some future

performance by the non-breaching party. !°!

and World Report, Inc., 75 N.Y.2d 38, 44, 550 N.Y.S.2d 590,

594, 549 N.E.2d 1161 (1989).

97 Computer Possibilities Unlimited, Inc. v. Mobil Oil Corp., 301

A.D.2d 70, 79, 747 N.Y.S.2d 468, 476 (Ist Dep't 2002). As a

corollary to this principle of law, a party that has repudiated

the contract may not thereafter maintain an action to compel

specific performance by the other party to the contract.

Stadtmauer v. Brel Associates IV, L.P., 270 A.D.2d 59, 704

N.Y.S.2d 237 (1st Dep't 2000); Net2Globe Intern., Inc. v. Time

Warner Telecom of New York, 273 F. Supp. 2d 436, 457

(S.D.N.Y. 2003).

*§ Rachmani Corp. v. 9 East 96th Street Apartment Corp., 211

A.D.2d 262, 266, 629 N.Y.S.2d 382, 385 (1st Dep't 1995).

7 Long Island R. Co. v. Northville Industries Corp., 41 N.Y.2d

455, 463-66, 393 N.Y.S.2d 925, 930-32, 362 N.E.2d 558 (1977);

Sequa Corp. v. Gelman, 1996 WL 79876 (S.D.N.Y. 1996).

100 Long Island R. Co. v. Northville Industries Corp., 41 N.Y.2d

455, 463-66, 393 N.Y.S.2d 925, 930-32, 362 N.E.2d 558 (1977);

Acacia Nat. Life Ins. Co. v. Kay Jewelers, Inc., 203 A.D.2d 40,

43, 610 N.Y.S.2d 209, 212 (1st Dep't 1994).

101 American List Corp. v. U.S. News & World Report, Inc., 75

N.Y.S.2d 38, 44, 550 N.Y.S.2d 590, 594 (1989); Gardiner Intern.,

Inc. v. J.W. Townsend & Associates, Inc., 13 A.D.3d 246, 788

N.Y.S.2d 312 (1st Dep't 2004).

Simply stated, a repudiation is essentially a

unilateral termination of the agreement. If the

contract allows such a termination, the repudiation

ends the contract and the parties’ contractual

relations.!¥2 If the contract does not provide the

repudiating party a right to terminate it unilaterally,

repudiation breaches the contract.'°% A party to a

contract that does not have a right of termination

may not unilaterally terminate the contract by

repudiating it and thereby relieve itself of its

contractual obligation to perform.'!°%4 In addition,

termination of an agreement without affording the

other party its contractual right to cure is also a

repudiation of the agreement and relieves the

breaching party of any obligation to effectuate a

cure.!% However, where one party breaches its

contractual obligations, a statement by the other

party that it will not perform unless the breach is

cured does not constitute a repudiation. 1

The test for whether a repudiation has occurred is

an objective one and a party's good faith is

102 Rochdale Village, Inc. v. Public Service Emp. Union, Local

No. 80, Intern. Broth. of Teamsters, Chauffeurs,

Warehousemen and Helpers of America, 605 F.2d 1290, 1297,

102 L.R.R.M. (BNA) 2476, 87 Lab. Cas. (CCH) P 11591 (2d Cir.

1979).

103 Lopresti v. Merson, 168 L.R.R.M. (BNA) 2427, 145 Lab. Cas.

(CCH) P 11188, R.'.C.O. Bus. Disp. Guide (CCH) P 10168, 2001

WL 1132051 (S.D.N.Y. 2001).

104 Energy Capital Co. v. Caribbean Trading and Fidelity Corp.,

1996 WL 157498 (S.D.N.Y. 1996).

105 MK West Street Co. v. Meridien Hotels, Inc., 184 A.D.2d 312,

584 N.Y.S.2d 310 (1st Dep't 1992).

106 Scavenger, Inc. v. GT Interactive Software Corp., 289 A.D.2d

58, 734 N.Y.S.2d 141 (1st Dep't 2001).

immaterial.!°7 Thus, anticipatory breach cannot

occur unless it is clear that a party will not honor its

obligations,!°8 and it is the words and acts of the

repudiating party that are communicated to the

other party are controlling, regardless of what the

repudiating party may have intended. !°9

Furthermore, whether repudiation has occurred

generally presents a fact issue of whether there has

been a clear and unequivocal expression of an

intention not to perform. !!°

In the present case, the Defendant-Respondent,

aside from not endeavoring in any way to perform its

107 Record Club of America, Inc. v. United Artists Records, Inc.,

643 F. Supp. 925, 939, 2 U.C.C. Rep. Serv. 2d 1310 (S.D.N.Y.

1986), vacated, 890 F.2d 1264 (2d Cir. 1989).

108 Rachmani Corp. v. 9 East 96th Street Apartment Corp., 211

A.D.2d 262, 266, 629 N.Y.S.2d 382, 385 (1st Dep't 1995);

Salvato v. St. David's School, 307 A.D.2d 812, 763 N.Y.S.2d 42

(1st Dep't 2003); Roan/Meyers Associates, L.P. v. CT Holdings,

Inc., 26 A.D.3d 295, 810 N.Y.S.2d 67 (1st Dep't 2006).

109 Forward Publications v. International Pictures, 277 A.D.

846, 98 N.Y.S.2d 139 (1st Dep't 1950). The announcement of an

intention not to perform must be positive and unequivocal.

Tenavision, Inc. v. Neuman, 45 N.Y.2d 145, 150, 408 N.Y.S.2d

36, 38, 379 N.E.2d 1166, 24 U.C.C. Rep. Serv. 337 (1978). If

words are used, the words must be unequivocal and must draw

a “discernible line in the sand.” Norcon Power Partners, L.P. v.

Niagara Mohawk Power Corp., 92 N.Y.2d 458, 463, 682

N.Y.S.2d 664, 667, 705 N.E.2d 656, 37 U.C.C. Rep. Serv. 2d 323

(1998). It has been held that the repudiation can be either a

statement by a party indicating that it will commit a breach

that will give the other party the ability to assert a claim for

total damages, or an action by a party which renders it unable

to perform its contractual obligations. Norcon Power Partners,

L.P. v. Niagara Mohawk Power Corp., 92 N.Y.2d 458, 463, 682

N.Y.S.2d 664, 667, 705 N.E.2d 656, 37 U.C.C. Rep. Serv. 2d 323

(1998).

110 O'Connor v. Sleasman, 14 A.D.3d 986, 788 N.Y.S.2d 518 (3d

Dep't 2005).

half of the bargain,!'! shut Mark Hynes out of the

building where he was endeavoring to perform on his

portion of the contract (telling him not to come

back),!!2 and presented Mark Hynes with a forged

document in an attempt to avoid its contractual

obligations.'!%> These measures reasonably raise

evidence of repudiation, and thereby raise an issue of

material fact for the fact-finder. O'Connor _v.

Sleasman, 14 A.D.3d 986, 788 N.Y.S.2d 518 (3d Dep't

2005).

POINT FIVE:

ASSUMING THAT AN ISSUE OF FACT HAD NOT BEEN

RAISED ON THE MOTION, THE LOWER COURT'S

INTERPRETATION WOULD STILL HAVE BEEN IN ERROR

REGARDING THE LAW, AS IT RAN CONTRARY TO BOTH

FIRST DEPARTMENT AND COURT OF APPEALS

PRECEDENT REGARDING THE INTERPRETATION OF

CONTRACTS

Although absent any relevant extrinsic evidence

of the parties' intent, or anticipation of the

availability thereof, a court can resolve any

ambiguity in the written contract as a matter of

law,'14 a court is required to apply the law in

deciding a matter as a matter of law.

In the case at bar, a number of principles of law

that apply to the interpretation of contracts were not

followed by the Lower Court. These will be examined

in this final section of the Argument, and will be

contrasted with the approach taken by the Lower

Court.

nt R, 300 — 301.

12 R, 166 & 230.

ngIR.9 & 207 — 208.

114 Schuler-Haas Elec. Co. v. Aetna Cas. & Sur. Co., 40 N.Y.2d

883, 885, 389 N.Y.S.2d 348, 348, 357 N.E.2d 1003 (1976).

1. THE CONTRACT MUST ALWAYS BE INTERPRETED IN

THE LIGHT OF THE PURPOSE FOR WHICH IT WAS

CREATED:

A contract should be construed in light of the

objective the parties were trying to accomplish.!!®

The manifest purpose the parties sought to

accomplish is of paramount significance.!!6 It takes

precedence over all other canons of construction.!!"

A contract should not be read in a manner that

defeats its purpose.!!8 Likewise, the function of a

court is to effect that purpose."9 In interpreting

contract language, besides considering the common

meaning of the language employed, a court must

consider the parties' expectations and purposes in

view of the factual context in which they made the

agreement, with due regard to their

sophistication.!20 Thus, a written contract will be

interpreted to give effect to its general purpose.

115 Moncure v. New York State Dept. of Environmental

Conservation, 218 A.D.2d 262, 266, 639 N.Y.S.2d 859, 862 (3d

Dep't 1996).

116 Teig v. Suffolk Oral Surgery Associates, 2 A.D.3d 836, 769

N.Y.S.2d 599 (2d Dep't 2003).

117 In re Herzog, 301 N.Y. 127, 135, 93 N.E.2d 336, 339 (1950):

Massachusetts Mut. Life Ins. Co. v. Thorpe, 260 A.D.2d 706,

687 N.Y.S.2d 490 (3d Dep't 1999).

118 Lee v. Marvel Enters., Inc., 386 F. Supp. 235, 244 (S.D.N.Y.

2005) (quoting Allen v. WestPoint-Pepperell, Inc., 1996 WL

2004 (S.D.N.Y. 1996)).

119 Marvel Entertainment Group, Inc. v. Young Astronaut

Council, 747 F. Supp. 945, 948 (S.D.N.Y. 1990); Wong v. New

York Times Co., 297 A.D.2d 544, 547, 747 N.Y.S.2d 213, 217

(1st Dep't 2002).

120 Madison Ave. Leasehold, LLC v. Madison Bentley Associates

LLC, 30 A.D.3d 1, 8, 811 N.Y.S.2d 47, 53 (1st Dep't 2006), aff'd,

8 N.Y.3d 59, 2006 WL 3716035 (2006).

Westmoreland Coal Co. v. Entech, Inc., 100 N.Y.2d

352, 358, 763 N.Y.S.2d 525, 528, 794 N.E.2d 667

(2003).

The twin focal points in interpreting the parties'

contract are their objective and their purpose in

entering into it.!21_ The purpose to be accomplished

and the object to be advanced are to be considered as

part of the effort to ascertain the intent of the

parties. M. O'Neil Supply Co. v. Petroleum Heat &

Power Co., 280 N.Y. 50, 55, 19 N.E.2d 676, 679

(1939). The contract is thus read in light of the

circumstances existing at the time of its making for

such circumstances may stamp a meaning upon a

word or phrase that is different from the strict or

primary meaning to be gathered from the instrument

unenlightened by extrinsic aids. Becker v. Peter A.

Frasse & Co., 255 N.Y. 10, 14, 173 N.E. 905, 906

(1930).

Although Mark Hynes presented the only

admissible evidence of the purpose’ and

circumstances surrounding the creation of the

contract (as only he could, presenting the only

personal knowledge concerning the creation of the

document),!22 the Lower Court ignored the only

admissible evidence presented and chose an

interpretation of the contract that was not supported

by that evidence. (R. 11).

2. THE RULE AGAINST THE ADDITION OF TERMS:

Courts may not, by construction, add or excise terms,

or distort the meaning of those used, thereby making

121 New York Bank for Sav. v. Howard Cortlandt St.. Inc., 106

A.D.2d 496, 482 N.Y.S.2d 836 (2d Dep't 1984).

122 South Bay Center, Inc. v. Butler, Herrick & Marshall, 43

Misc.2d 269, 250 N.Y.S.2d 863 (Sup.Ct.. Nassau County, 1964).

a new contract for the parties under the guise of

interpreting their writing.!23 Furthermore, a court

may not rewrite a contract to accord with its

instincts for the dispensation of equity under the

facts of a case. 124

In the present case, the Lower Court added a

term to the contract limiting Mark Hynes’s share in

Internet sales to sales made directly by Defendant-

Appellant over the Defendant-Appellant’s website.

(R. 11 — 30). This was done despite the fact that the

contract in question did not have the limiting terms

of “directly” or “website” included anywhere in its

language,!25 and the fact that the purpose of the

contract itself was to provide for a system that

encompassed all of Sonido, Inc.’s business (not

merely that directly conducted over its website). !26

3. THE CONTRACT WILL BE INTERPRETED AS A WHOLE,

AND EACH PROVISION MUST BE GIVEN FULL MEANING:

A court must attempt to give effect to the parties’

reasonable expectations by determining tneir

purpose and intent which is ascertained by looking at

the language the parties chose to use, the contract as

a whole, and the conduct of the parties. Omni

Berkshire Corp. v. Wells Fargo Bank, N.A., 307 F.

Supp. 2d 534, 540 (S.D.N.Y. 2004). Thus, the

intention of the parties to a contract must be

123 Reiss v. Financial Performance Corp., 97 N.Y.2d 195, 199,

738 N.Y.S.2d 658, 764 N.E.2d 958 (2001).

124 Terwilliger v. Terwilliger, 206 F.3d 240, 245 (2d Cir. 2000)

(citing De Vanzo v. Newark Ins. Co., 44 A.D.2d 39, 353 N.Y.S.2d

29 (2d Dep't 1974), order aff'd, 37 N.Y.2d 733, 374 N.Y.S.2d 619,

337 N.E.2d 131 (1975)).

125 R. 74.

126 R. 200 — 204, 206 & 286.

ascertained not from one provision but from the

entire instrument.!27 In this way, a contract should

be construed to give full meaning and effect to all of

its provisions.!28 The rules of contract construction

require courts, if possible, to adopt an interpretation

that gives meaning to every provision of the

contract. 19

For these reasons, a written contract will be read

as a whole and every part will be interpreted with

respect to the whole,!°° as the meaning of a writing

may be distorted if undue force is given to a single

word or phrase.!2! In effect, the document should be

read as a whole to ensure that excessive emphasis is

not placed upon particular words or phrases.!82 Also,

when reading the contract as a whole, a court must

127 Paige v. Faure, 229 N.Y. 114, 118, 127 N.E. 898, 899, 10

A.L.R. 649 (1920); Village of Hamburg v. American Ref-Fuel Co.

of Niagara, L.P., 284 A.D.2d 85, 89, 727 N.Y.S.2d 843, 846 (4th

Dep't 2001).

128 American Exp. Bank Ltd. v. Uniroyal, Inc., 164 A.D.2d 275,

562 N.Y.S.2d 613 (1st Dep't 1990). God's Battalion of Prayer

Pentecostal Church, Inc. v. Miele Associates, LLP, 6 N.Y.3d

371, 812 N.Y.S.2d 435, 845 N.E.2d 1265 (2006).

129 Muzak Corp. v. Hotel Taft Corp., 1 N.Y.2d 42, 46, 150

N.Y.S.2d 171, 174, 133 N.E.2d 688 (1956); Greater New York

Mut. Ins. Co. v. Mutual Marine Office, Inc., 3 A.D.3d 44, 50, 769

N.Y.S.2d 234, 239 (1st Dep't 2003); Mionis v. Bank Julius Baer

& Co., Ltd., 301 A.D.2d 104, 109, 749 N.Y.S.2d 497, 502 (1st

Dep't 2002); Trump-Equitable Fifth Ave. Co. v. H.R.H. Const.

Corp., 106 A.D.2d 242, 485 N.Y.S.2d 65 (ist Dep't 1985), order

aff'd, 66 N.Y.2d 779, 497 N.Y.S.2d 369, 488 N.E.2d 115 (1985).

130 Westmoreland Coal Co. v. Entech, Inc., 100 N.Y.2d 352, 357,

763 N.Y.S.2d 525, 528, '794 N.E.2d 667 (2003); Empire

Properties Corporation v. Manufacturers Trust Co., 288 N.Y.

242, 248, 43 N.E.2d 25, 28 (1942).

131 Jd.

132 South Road Associates, LLC v. Intern. Business Machines

Corp., 4 N.Y.3d 272, 277, 793 N.Y.S.2d 835, 826 N.E.2d 806

(2005).

interpret it to give effect to the general purpose of

the contract.!33\ Thus, a court will strive to give

meaning to every sentence, clause and word. !54

The very goal of contract construction is to avoid

an interpretation that would leave a_ clause

meaningless.!35 Words are never to be construed as

meaningless if they can be made effective by any

reasonable construction of the contract. 67 Wall St.

Co. v. Franklin Nat. Bank, 37 N.Y.2d 245, 248, 371

N.Y.S.2¢ 915, 918, 333 N.E.2d 184 (1975). Thus, a

construction should be avoided if it ignores the

interplay of the terms and renders one or more of the

terms inoperable. !%6

In the case at bar, the Lower Court presumably

relied on an argument presented by the Defendant-

Respondent in interpreting the contract,!87 as

——

133 Postlewaite v. McGraw-Hill, Inc., 411 F.3d 63, 67, 75

U.S.P.Q.2d (BNA) 1437 (2d Cir. 2005); Rentways, Inc. v. O'Neill

Milk & Cream Co., 308 N.Y. 342, 347, 126 N.E.2d 271, 273

(1955); accord Metropolitan Life Ins. Co. v. Noble Lowndes

Intern., Inc., 84 N.Y.2d 430, 438, 618 N.Y.S.2d 882, 886, 643

N.E.2d 504 (1994).

134 Travelers Cas. and Sur. Co. v. Certain Underwriters at

Lloyd's of London, 96 N.Y.2d 583, 594, 734 N.Y.S.2d 531, 538,

760 N.E.2d 319, 32 Envtl. L. Rep. 20262 (2001).

138 Two Guys from Harrison-N.Y., Inc. v. S.F.R. Realty

Associates, 63 N.Y.2d 396, 482 N.Y.S.2d 465, 472 N.E.2d 315

(1984); Alexander & Alexander Services, Inc. v. These Certain

Underwriters at Lloyd's, London, England, 136 F.3d 82, 86 (2d

Cir. 1998); Eastman Kodak Co. v. STWB Inc., 232 F. Supp. 2d

74, 92 (S.D.N.Y. 2002) (quoting Restatement (Second) of

Contracts § 203(a) (“an interpretation which gives a reasonable

.. and effective meaning to all the terms is preferred to an

interpretation which leaves a part ... of no effect.”’).

136 Pearce, Urstadt. Mayer & Greer Realty Corp. v. Atrium

Development Associates, 77 N.Y.2d 490, 568 N.Y.S.2d 890, 571

N.E.2d 60 (1991); Ruttenberg v. Davidge Data Systems Corp..,

215 A.D.2d 191, 196, 626 N.Y.S.2d 174, 177 (1st Dep't 1995).

137 R. 297.

pertaining only to direct sales over the Internet, as

no terms limiting the contract to sales made directly

over the internet are found in the language of the

contract. (R. 74). In short, the interpretation

suggested by the Defendant-Respondent is that the

contract only applies to direct sales made over a

website as it refers to “sales made and paid for via

the internet.” (R. 74). In this interpretation, the

Defendant-Respondent interprets the word “and” in a

restrictive sense, as a term limiting the contract to

subject matter only the set of products that are both

“bought” and “paid for” via the internet. (R. 74). Not

only does this interpretation ignore the interplay of

words, and “advertising” is not the kind of thing that

is both “bought” and “paid for” over one’s own

website, !38 but it ignores Court of Appeals precedent

where the word “and” is judicially determined to be

interpreted in a non-limiting way.!°9 Unless the

document snows on its face that the word “and” is to

be literally construed, “and” is considered to also

mean “or;” such was the case where a letter of credit,

providing for shipment in “August and September”

covered a shipment in “August and/or September.” 14°

4. THE RULE OF CONSISTENCY:

Sophisticated lawyers are presumed to know how

to use parallel construction and identical wording to

impart identical meaning when they intend to do so

138 The Defendant-Respondent seems to ignore the fact through

this interpretation that the “advertisement” in question is

Sonido, Inc.’s own advertisement.

139 Lamborn v. Nations! Zark Bank, 212 A.D. 25, 208 N.Y.S.

428, affd 240 N.Y. 520, 138 N.E. 664 (1925); Murphy v. Long

Island Oyster Farms, Inc., 491 N.Y.S.2d 721, 722, 112 A.D.2d

276, 277 (N.Y.A.D. 2 Dept. Jul 15, 1985).

140 Jd.

and to know how to use different words and

construction to establish distinctions in meaning. !4}!

When language is omitted from one provision but is

placed in other provisions, it must be assumed that

the omission was _ intentional.!42 Terms in a

document, especially terms of art, normally have the

same meaning throughout the document in the

absence of a clear indication that different meanings

were intended.!43 Likewise, the court may presume

that the same words used in different parts of the

contract are intended to have the same meaning

throughout the contract.'44 In this way, in the

absence of evidence indicating a contrary intention,

the same meaning will be given to the similar

expressions. !45

As mentioned above in the subsection concerning

the rule of giving the full meaning to every provision

of the contract, an absurd result is arrived at when a

meaning of direct sales over the Internet is applied to

the contract.'446 If the same meaning cannot be

applied throughout the contract without receiving an

absurd result, then the rule of consistency cannot be

followed, and the interpretation should not be

followed.

141 International Fidelity Insurance Company v. County of

Rockland, 98 F. Supp. 2d 400, 412 (S.D.N.Y. 2000); accord

National Basketball Ass'n v. National Basketball Players Ass'n,

176 L.R.R.M. (BNA) 2487, 2005 WL 22869 (S.D.N.Y. 2005).

142 Sterling Investor Services, Inc. v. 1155 Nobo Associates,

LLC, 30 A.D.3d 579, 818 N.Y.S.2d 513 (2d Dep't 2006).

143 Maryland Cas. Co. v. W.R. Grace and Co., 128 F.3d 794, 799

(2d Cir. 1997), as amended, (Nov. 18, 1997).

144 Finest Investments v. Security Trust Co. of Rochester, 96

A.D.2d 227, 468 N.Y.S.2d 256 (4th Dep't 1983), order aff'd, 61

N.Y.2d 897, 474 N.Y.S.2d 481, 462 N.E.2d 1199 (1984).

145 Lashins Arcade Co. v. Jorling, 221 A.D.2d 533, 536, 634

N.Y.S.2d 138, 141 (2d Dep't 1995).

146 Please see also, supra, note 132.

5. THE RULE THAT CONDITIONS WILL BE DISFAVORED:

If there is doubt as to the meaning of a contract’s

language, a finding that the language creates a

condition is disfavored.!47 A condition must be

explicitly stated in a contract.148 In the absence of

unambiguous language, a condition will not be found.

Ginett v. Computer Task Group, Inc., 962 F.2d 1085,

1100, 22 Fed. R. Serv. 3d 1338 (2d Cir. 1992).

If the Lower Court viewed sales being made

directly over the website of Sondio, Inc. as a

condition to Mark Hynes receiving the fruits of the

contract,!49 then the Court applied an interpretation

147 DeVito v. Hempstead China Shop, Inc., 38 F.3d 651, 654 (2d

Cir. 1994).

148 Catskill Development, L.L.C. v. Park Place Entertainment

Corp., 154 F. Supp. 2d 696, 704 (S.D.N.Y. 2001); please see also

Oppenheimer & Co., Inc. v. Oppenheim, Appel, Dixon & Co., 86

N.Y.2d 685, 636 N.Y.S.2d 734, 660 N.E.2d 415 (1995).

149 R. 30. The Lower Court interprets the contract as offering

conditional payment only, as it states that Mark Hynes would

be paid if the Defendant-Respondent “decided to go into the

business of selling music over the internet.” This interpretation

is not only conditional, but would also be an illusory contract,

which is an interpretation that should be disfavored. Zurakov v.

2003); Broadview Intern. LLC v. Commissioner.com, Inc., 17

A.D.3d 102, 793 N.Y.S.2d 22 (1st Dep’t 2005). In addition, the

Lower Court’s interpretation, which resulted in granting the

Defendant-Respondent’s motion for summary judgment, ignores

the fact that the Plaintiff-Appellant has a claim for unjust

enrichment which arose from alleging that he conveyed a

benefit upon the Defendant-Respondent without being

adequately compensated, and by requesting “such other relef

as the court deems just and proper.” (R. 36 & 38). Goldman v.

Metropolitan Life Ins. Co., 5 N.Y.3d 561, 841 N.E.2d 742, 807

N.Y.S.2d 583, 2005 N.Y. Slip Op. 08846 (2005). However,

because there was a contract in place, unjust enrichment is not

of the contract that should have been disfavored and

should not have been found in the language of the

contract. 15°

6. THE RULE AGAINST FORFEITURE:

Courts will not interpret ambiguous provisions to

effect a forfeiture.'5! The Court of Appeals has noted

that the Restatement defines the term forfeiture as

the denial of compensation that results when a party

loses its rights to the agreed exchange after it has

substantially relied, by preparation or performance,

on the expectation of the exchange.'5? Forfeitures

are abhorrent to the law and will not be imposed if

there is any other reasonable basis to resolve the

issue.53 The rule is clear: courts will avoid an

interpretation that renders a contract illusory and

unenforceable. Curtis Properties Corp. v. Greif

the appropriate remedy, and it would deprive the Plaintiff-

Appellant of the benefit of his bargain. EBC I, Inc. v. Goldman

Sachs & Co., 5 N.Y.3d 11, 832 N.E.2d 26, 799 N.Y.S.2d 170,

Blue Sky L. Rep. P 74,543, 2005 N.Y. Slip Op. 04478 (2005);

Singer Asset Finance Co., LLC v. Melvin, 33 A.D.3d 355, 822

N.Y.S.2d 68, 2006 N.Y. Slip Op. 07198 (ist Dep’t 2006). The

result of the Lower Court’s interpretation leaves the Plaintiff-

Appellant no remedy at either law or in equity.

150 Irving Trust Co. v. Nationwide Leisure Corp., 711 F. Supp.

166, 168 (S.D.N.Y. 1989).

151 Kreiss v. McCown De Leeuw & Co., 131 1’. Supp. 2d 428

(S.D.N.Y. 2001)(citing 220 West 42 Associates v. Ronbet

Newmark Co., 84 Misc. 2d 259, 375 N.Y.S.2d 255 (Sup 1975),

judgment modified, 53 A.D.2d 829, 385 N.Y.S.2d 304 (1st Dep't

1976), order affd, 40 N.Y.2d 1000, 391 N.Y.S.2d 107, 359

N.E.2d 701 (1976)).

152 Oppenheimer & Co., Inc. v. Oppenheim, Appel, Dixon & Co.,

86 N.Y.2d 685, 692, 636 N.Y.S.2d 734, 738, 660 N.E.2d 415

(1995).

153 Jd.

Companies, 212 A.D.2d 259, 265, 628 N.Y.S.2d 628,

632 (1st Dep't 1995).

As mentioned above in the subsection concerning

the rule disfavoring conditions,!54 the Lower Court

took a position that would lead to forfeiture.'55 In

light of the above-stated law, such is error.

7. CONSTRUCTION IN FAVOR OF THE PROMISEE:

All else being equal, the ambiguous contract

should be construed in a manner as will be more

beneficial to, and as understood by, the promisee. 156

In the case at bar, the Lower Court was presented

with two conflicting interpretations of the contract by

both parties. (R. 286 - 288 & 296 —- 297).

Nonetheless, it chose to not only favor the

interpretation of the promisor,!5’7 but to favor it to

the point of forfeiture against the promisee. (R. 30).

8. CONSTRUCTION AGAINST THE DRAFTSMAN:

The rule of construction against the draftsman

provides that an agreement must be construed most

strongly against the party who prepared it and

favorably to the party which had no voice in its

preparation. !°8

154 Please see, supra, note 143.

155 R. 30.

156 M. O'Neil Supply Co. v. Petroleum Heat & Power Co., 280

N.Y. 50, 55, 19 N.E.2d 676, 678 (1939); accord Chase

Manhattan Bank v. New Hampshire Ins. Co., 193 Misc. 2d 580,

586, 749 N.Y.S.2d 632, 637 (Sup 2002).

157 R, 11.

158 Jacobson v. Sassower, 66 N.Y.2d 991, 993, 499 N.Y.S.2d 381,

382, 489 N.E.2d 1283 (1985); 67 Wall St. Co. v. Franklin Nat.

Bank, 37 N.Y.2d 245, 249, 371 N.Y.S.2d 915, 918, 333 N.E.2d

By interpreting the contract in favor of the

interpretation provided by Sonido, Inc.,'59 the Lower

Court interpreted the contract to the favor of the

draftsman, as Jerry Masucci, an attorney, was the

draftsman. (R. 240). In light of the stated rule, that

interpretation should have been disfavored.

CONCLUSION

For the reasons stated, it is respectfully presented

that the Court should reverse the grant of summary

judgment given by the Lower Court, and that it

should grant a decision in accord with the rules of

law stated.

By: s/ Robert M. Shafran, Esq.

Robert M. Shafran, Esq.

LAW OFFICES OF ANATTA

LEVINSKY, P.C.

6924 Bay Parkway

Brooklyn, New York 11204

(718) 837-5555

184 (1975); Computer Associates Intern., Inc. v. U.S. Balloon

Mfg. Co., Inc., 10 A.D.3d 699, 782 N.Y.S.2d 117 (2d Dep't 2004).

1589 R, 11 & 30.

APPENDIX J

To Be Argued By:

ROBERT M. SHAFRAN

New York County Clerk’s Index No. 604046/2000

NEW YORK SUPREME COURT

APPELLATE DIVISION — FIRST DEPARTMENT

MARK HYNES,

Plaintiff-Appellant,

-against-

SONIDO, INC.,

Defendant-Respondent.

REPLY BRIEF FOR PLAINTIFF-APPELLANT

ROBERT M. SHAFRAN, ESQ.

THE LAW OFFICES OF

ANATTA LEVINSKY, P.C.

6924 Bay Parkway

Brooklyn, New York 11204

(718) 837-9700

Attorneys for Plaintiff-Appellant

REPRODUCED ON RECYCLED PAPER

kkk

[Reply Brief for Plaintiff-Appellant pp. 1-25]

ARGUMENT

REPLY TO FIRST POINT:

THE DEFENDANT-RESPONDENT IS INCORRECT IN

STATING THAT THE LOWER COURT PROPERLY FOUND

THAT THERE WERE NO ISSUES OF MATERIAL FACT

Although it is true that a party opposing a motion

for summary judgment must show facts sufficient to

require a trial if such party is to defeat the motion, !®

and though it is also true that the party opposing the

motion must also “make his motion by producing

evidentiary proof in admissible form”,'®! it is

important to note that these burdens do not pass to

the party opposing the motion until, and only until,

the moving part has established prima facie

entitlement to judgment as a matter of law. 162

As argued in the Plaintiff-Appellant’s Brief, !®> the

Defendant-Respondent did not meet its burden of

169 Friends of Animals v. Associated Fur Mfrs., 46 N.Y.2d 1065,

1067, 416 N.Y.S.2d 730, 791 (1979), cited in Defendant-

Respondent’s Brief at P. 7.

161 Td.

162 Friends of Animals v. Associated Fur Mfrs., 46 N.Y.2d 1065,

1067, 416 N.Y.S.2d 730, 791 (1979), cited in Defendant-

Respondent’s Brief at P. 7.

163 Please see Footnote 57 in Plaintiff-Appellant’s Brief at P. 23.

Please also see Point Two and Point Four of the Plaintiff-

Appellant's Brief, at PP. 7-22 and PP. 28-35 respectively, which

both present the argument that the issue of direct sales alone is

not dispositive on the issue of breach of contract, and that,

establishing prima facie entitlement as a matter of

law on the issue of breach of contract, as there are

many scenarios in which there can be absence of

sales by a defendant that still allow for breach of

contract. 14

The Defendant-Respondent, now seems to be

arguing that it produced evidence in admissible form

that it never made any direct sales over any of its

websites (though the fact that such evidence referred

only to direct sales over a website — as distinguished

from Internet sales as they are commonly understood

— was not made clear or manifested until the

Defendant-Respondent interposed that assertion in

its reply papers). Such would deprive the

Plaintiff-Appellant of any notice that the Defendant-

Respondent took issue with — or made a distinction

between — sales made directly by the Defendant-

Appellant over its own website and sales made over

the Internet as stated in the Plaintiff-Appellant’s

Verified Complaint. '®

As stated in the Plaintiff-Appellant’s Brief, the

Plaintiff-Appellant adequately introduced evidence

that met its burden on the Motion'®? — as he

introduced evidence that Sonido had indeed made

Internet sales according to the interpretation of

consequently, the moving party was not entitled, as a matter of

law, to a judgment in its favor on the issue of breach.

164 Please see Point Two and Point Four of the Plaintiff-

Appellant’s Brief at PP. 11-22 and PP. 28-35.

165 Compare R. 305 — 328 to R. 294 — 301.

166 Please see 416 of Plaintiff-Appellant’s Verified Complaint

where it is stated: “It was the intent of the parties that all sales

of Sonido products which result from any source by the internet

method would generate income for Sonido and Mark T. Hynes

by the internet method.” R. 37. See also O'Connor-Miele v.

Barhite & Holzinger, Inc., 234 A.D.2d 106, 106, 650 N.Y.S.2d

717, 718 (1st Dep’t 1996).

167 Plaintiff-Appellant’s Brief, PP. 7-34.

Internet sales advanced in the Plaintiff-Appellant’s

Verified Complaint.'68 In light of this, for the

Defendant-Respondent to now claim that the

Plaintiff-Appellant never met its burden on the

Motion is entirely incorrect, and only makes sense if

Defendant-Respondent now _ proposes to the

Appellate Division that Mark Hynes had the burden

of overcoming an interpretation that the Defendant-

Respondent did not interpose until its reply papers

on the Motion — which would then make its reply an

improper sur-reply. !6

168 Please see Plaintiff-Appellant’s Brief at PP. 7-11 and PP. 22-

34.

169 CPLR 2214; Vovytek Technology, Inc. v. Rapid Access

Consulting, Inc., 279 A.D.2d 470, 719 N.Y.S.2d 112, 2001 N.Y.

Slip Op. 00236 (2d Dep’t 2001); Klimis v. Lopez, 290 A.D.2d

538, 736 N.Y.S.2d 697, 2002 N.Y. Slip Op. 00601 (2d Dep't

2002); Dannasch v. Bifulco, 184 A.D.2d 415, 416-417, 585

N.Y.S.2d 360 (1st Dep’t 1992).

As a note: The Plaintiff-Appellant has already argued in the

Appellant Brief that it was error for the Lower Court to decide

the interpretation of a contract when the issue of ambiguity was

raised on the papers of the motion (Please see Plaintiff-

Appellant's Brief at PP. 22-27). Such, however, is distinct from

the point. raised here, as to the Defendant not even meeting its

burden, which ties into the arguments raised in Point Two and

Point Four of the Plaintiff-Appellant’s Brief at PP. 11-22 and

PP. 28-35. Thus, a situation is revealed where both the Lower

Court could not proceed with an interpretation of the contract

separate from a determination by the fact finder of the

circumstances surrounding the meaning of the contract, as the

issue of ambiguity had been raised on the motion, and,

furthermore, the Defendant-Respondent had not met its burden

on the motion (if it sought such an issue to come before the

Court on its Motion), because it did not present its evidence,

and argument for entitlement as a matter of law, on the

original motion papers, which prevented the Plaintiff-Appellant

from being required to produce any evidence on the issue —

though he did.

As mentioned, the evidence produced by the

Defendant-Respondent on the original moving papers

may have been in admissible form, but Defendant-

Respondent never stated in those papers that such

evidence referred only to direct sales made by

Sonido, Inc., or that it even took issue with the

interpretation presented by the Plaintiff-Appellant in

his Verified Complaint until its reply papers — thus

failing to raise any burden on the part of the

Plaintiff-Appellant to present evidence defeating the

Motion on the issue of whether or not the contract

referred to direct sales over a website or to sales

made by any means over the Internet.!17° This is so

precisely because the Defendant-Respondent did not

make it evident, in any way whatsoever, that such

was meant when it claimed that it had “never sold

any music or any other item over the internet,”!7!

and did not make such a claim apparent until it put

in its reply papers.!72 Thus, the Defendant-

Respondent never satisfied its burden as a moving

party because the mere fact that the evidence came

before the Court on the motion was insufficient to

establish prima facie entitlement to a judgment as a

matter of law when that evidence did not come

forward on the original moving papers, as the moving

party must establish its entitlement within the

moving papers as to every element of a claim or

defense. !73

1707 Costello v. Hapco Realty, Inc., 305 A.D.2d 445, 446, 761

N.Y.S.2d 79, 80 (2d Dep’t 2003).

‘71 Please see R. 309.

172 Compare R. 305 — 328 to R. 294 — 301.

173 CPLR 3212(b). See also Falk v. Goodman, 7 N.Y.2d 87, 195

N.Y.S.2d 645, 163 N.E.2d 871 (1959) and Celotex Corp. v.

Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (a

1986 determination of the U.S. Supreme Court suggesting that

the resisting party need not come forward with proof to sustain

Concerning every other issue that came up in the

papers supporting and opposing the Motion, the

Defendant-Respondent did not meet its burden — for

other reasons than those listed above — as it did not

provide the requisite admissible evidence concerning

the meaning of the contract at the time of its

formation,!74 and it did not provide evidence that the

Plaintiff-Appellant did not suffer any damages

whatsoever, which would be _ necessary for

overcoming Plaintiff-Appellant’s sworn statements

that he had suffered loss due to reliance and breach

(evidence which was before the Lower Court on the

Motion). 175

its claim until the moving party has demonstrated some basic

element missing from the claim). See also Dannasch v. Bifulco,

184 A.D.2d 415, 416-417, 585 N.Y.S.2d 360 (1st Dep’t 1992).

174 Please see Footnote 57 of Plaintiff-Appellant’s Brief at P. 23.

175 In his Affidavit offered in opposition to the Defendant-

Appellant’s Motion for Summary Judgment, Mark Hynes

presented sworn evidence of the circumstances existing at the

time of the formation of the contract (44, R. 286); of Repudiation

by the Defendant-Respondent({5, R. 286); a questioning of the

credibility of the Affidavits offered in support of the Defendant-

Respondent's Motion [7 - 49, R. 287, also see Rickert v.

Travelers Ins. Co., 159 A.D.2d 758, 551 N.Y.S.2d 985 (3d Dep't

1990) in regard to issues of credibility upon the moving papers];

as to the meaning of sales made “via the internet” in affidavit

form referencing industry practice and trade custom, and that

according to such the Defendant-Respondent had made internet

sales ((10 - 412, R. 287 and R. 289 — 293); and, that the

Defendant-Respondent had belatedly introduced an Answer

(Flo, R. 288).

Furthermore, the Motion itself was made “on all prior

pleadings and proceedings” (R. 305), and the Affidavit of Maggie

Burbano, in support of the Motion, incorporated the Plaintiff-

Appellant’s Summons and Complaint as an exhibit, placing it

before the Court on the Motion (R.307). In that Summons and

Complaint, the Plaintiff-Appellant swore to damages resulting

from reliance upon the breached contract (R. 312). Similarly, in

an Affidavit which had previously come before the Court, Mark

As the only issue that had been brought before

the Lower Court on the original papers supporting

the Defendant-Respondent’s Motion for Summary

Judgment (distinguished from the Defendant-

Respondent’s reply papers) was merely that the

Defendant-Respondent “never made any sales of any

kind over the internet”!”* and that, thus, there were

no damages,'77 the aforementioned evidence

presented by Mark Hynes on the Motion was more

than adequate to defeat the Defendant-Respondent’s

Motion for Summary Judgment -— despite the

Defendant-Respondent’s attempts in its Respondent

Brief to argue that an improper sur-reply can be used

to establish a prima facie case.

Given the foregoing analysis, if the Lower Court

“found that the affidavit submitted by Plaintiff-

Appellant in opposition to the motion failed to rebut

the prima facie showing of no sales by Sonido” (as the

Defendant-Respondent claims),!78 then the Lower

Court would have nonetheless committed error on

two counts: First, because the party opposing the

Motion only has a burden of production, not of

disproving the moving party’s assertions;!79 and,

Secondly, because the Defendant-Respondent never

established a prima facie case that it “never made

Hynes swore that he expended labor and funds in reliance upon

the Contract, and that he was never paid. (R. 91 — 92).

‘46 Please see R. 300 - 301.

'77 Please see R. 310.

'78 Please see Defendant-Respondent’s Brief at P. 10.

179 Sommer v. Federal Signal Corp., 79 N.Y.2d 540, 555, 583

N.Y.S.2d 957, 593 N.E.2d 1365 (1992); Zuckerman y. City of

New York, 49 N.Y.2d 557, 563, 427 N.Y.S.2d 595, 598, 404

N.E.2d 718 (1980); Winegrad v. New York University Medical

Center, 64 N.Y.2d 851, 853, 487 N.Y.S.2d 316, 318, 476 N.E.2d

642, 643 (1985); Cugini v. System Lumber Co., Inc., 111 A.D.2d

114, 489 N.Y.8S.2d 492 (1st Dep't 1985).

any sales of any kind over the internet” !®° — since it

never brought its interpretation in favor of limiting

the contract to sales made directly by Sonido, Inc. on

the original motion papers (or even in its belated

Answer, for that matter). 18!

Realizing the error of law that would be needed as

a basis for the Defendant-Respondent to be correct as

to its claim that the process followed by the Lower

Court in arriving at its judgment is of tantamount

importance, as the Defendant-Respondent now

appears to be arguing in its Brief that the Lower

Court adopted its interpretation (an interpretation of

the contract that the Defendant-Respondent had

never even placed in its Answer)!82 as a grounds for

denying both the evidence that the Plaintiff-

Appellant nonetheless offered for his interpretation

of the contract, as well as the evidence he offered in

support of there having been Internet sales made by

the Defendant-Respondent. 183

It is troubling to note, in light of this claim by the

Defendant-Respondent, that the Lower Court gives

its own account of the circumstances underlying the

formation of the contract (an account not settled by a

fact-finder, and nonetheless given in the face of

evidence produced by the Plaintiff-Appellant) as its

ground for reading the contract to be limited to direct

sales made by the Defendant-Respondent.!84 If the

Court's own unsettled account of the factual

circumstances surrounding the formation of the

contract was truly based upon information

interposed for the first time in the reply papers, as

the Defendant-Respondent now seems to be arguing,

180 Please see R. 300 — 301.

181 Compare R. 305 — 328 to R. 294 — 301. See also R. 288.

182 Please see R. 302 — 304.

183 Please see Defendant-Respondent’s Brief at PP. 10-11.

184 Please see R. 30.

then the Plaintiff-Appellant was not only deprived of

his right to have issues of fact concerning the

meaning of his contract determined by a fact-

finder, '85 but was also deprived of due process on the

summary judgment motion. 186

REPLY TO SECOND POINT:

THE DEFENDANT-RESPONDENT IS INCORRECT IN

STATING THAT THE COURT BELLOW CORRECTLY

INTERPRETED THE AGREEMENT BETWEEN THE PARTIES

In the section that follows, the Plaintiff-Appellant

will address each of the three sub-points addressed

185 State v. R.J. Reynolds Tobacco Co., 304 A.D.2d 379, 761

N.Y.S.2d 596 (ist Dept 2003); Amusement Business

Underwriters, a Div. of Bingham & Bingham, Inc. v. American

International Group, Inc., et al., 66 N.Y.2d 878, 880, 489 N.E.2d

729 (1985): Ehrlich v. Abrams Instrument Corp., 385 N.Y.S.2d

299, (lst Deo. 1976); Briarwood Towers 85th Co. v. Guterman,

523 N.Y.S.2d 98 (1st Dep’t 1988); Time Warner Entertainment

Co., L.P. v. Brustowsky, 634 N.Y.S.2d 82 (1st Dep’t 1995);

Steckler v. Steckler, 433 N.Y.S.2d 127 (1st Dep’t 1980); Tri-

State Pipe Lines Corp. v. Sinclair Refining Co., 264 N.Y.S.2d

138 (1st Dep’t 1965).

186 Ressis v. Mactye, 98 A.D.2d 836, 470 N.Y.S.2d 502 (3d Dep't

1983); People v. Minota, 137 A.D.2d 837, 525 N.Y.S.2d 300 (2d

Dep't 1988), citing State Farm Fire and Cas. Co. v. LiMauro,

103 A.D.2d 514, 481 N.Y.S.2d 90 (2d Dep't 1984), aff'd, 65

N.Y.2d 369, 492 N.Y.S.2d 534, 482 N.E.2d 13 (1985). Sce also

People v. Ford, 69 N.Y.2d 775, 513 N.Y.S.2d 106, 505 N.E.2d

615 (1987); see also CPLR 2214; Voytek Technology, Inc. v.

Rapid Access Consulting, Inc., 279 A.D.2d 470, 719 N.Y.S.2d

112, 2001 N.Y. Slip Op. 00236 (2d Dep’t 2001); Klimis v. Lopez,

290 A.D.2d 538, 736 N.Y.S.2d 697, 2002 N.Y. Slip Op. 00601 (2d

Dep't 2002); Dannasch v. Bifulco, 184 A.D.2d 415, 416-417, 585

N.Y.S.2d 360 (1st Dep’t 1992). See also Levitz v. Robbins Music

Corp., 17 A.D.2d 801, 801, 232 N.Y.S.2d 769, 770 (ist Dep’t

1962).

100

by the Defendant-Respondent with corresponding

headings.

1. THE LANGUAGE IN THE CONTRACT WAS LATENTLY

AMBIGUOUS DUE TO INFERENCES RAISED FOR THE FIRST

TIME IN THE DEFENDANT-RESPONDENT’S REPLY PAPERS,

NONETHELESS, A PLAIN READING OF THE CONTRACT

WOULD BE IN FAVOR OF THE PLAINTIFF-APPELLANT:

Although the Defendant-Respondent is correct in

stating that it is black letter law that the

interpretation of an unambiguous contract provision

is a question of law, and as such, a matter for the

court,!87 it is incorrect in stating that the contract

does not contain ambiguous language.

In support of its claim that the contract is not

ambiguous, the Defendant-Respondent makes an

appeal to the Plain Meaning Rule,!88 which would be

mistaken as the rule is to be applied in situations

where the contract is not ambiguous, !89 and as other

rules of law are the appropriate rules for determining

if a contract is ambiguous. !%

Furthermore, by the Defendant-Respondent’s own

admission, the Court did not apply the Plain

187 Lake Const. & Development Corp. v. City of New York, 211

A.D.2d 514, 515, 621 N.Y.S.2d 337 (1st Dep’t 1995).

188 Please see Defendant-Respondent’s Brief at P. 12.

189 Evans v. Famous Music Corp., 1 N.Y.3d 452, 458, 775

N.Y.s.2d 757, 761, 807 N.E.2d 869 (2004).

199 Greenfield v. Philles Records, Inc., 98 N.Y.2d 562, 570, 750

N.Y.S.2d 565, 570, 780 N.E.2d 166 (2002); Teichman_by

Teichman v. Community Hosp. of Western Suffolk, 87 N.Y.2d

514, 520, 640 N.Y.S.2d 472, 474, 663 N.E.2d 628, 20 Employee

Benefits Cas. (BNA) 1532 (1996); Lucente v. International

Business Machines Corp., 310 F.3d 243, 257, 29 Employee

Benefits Cas. (BNA) 2414 (2d Cir. 2002); Collins v. Harrison-

Bode, 303 F.3d 429, 433 (2d Cir. 2002); Golden Pacific Bancorp

v. F.D.I.C., 273 F.3d 509, 516 (2d Cir. 2001).

101

Meaning Rule but, as it cites to the record in its own

Brief,'9! includes a statement from the Lower Court

in which the Lower Court claims to have relied upon

its assessment of the circumstances surrounding the

formation of the contract, and, consequently. not

upon the Plain Meaning Rule.192 If such is the case,

by the Court’s own admission, the contract was not

interpreted as a pure matter of law, but based upon a

factual record that was never determined by the fact

finder.

A further problem arises for the Defendant-

Respondent if it seeks application of the Plain

Meaning Rule in that the language of the contract —

if interpreted separately from any factual record —

supports the Plaintiff-Appellant’s interpretation, and

not that of the Defendant-Respondent. The contract,

which reads:

“It is hereby stipulated and agreed by and

between Sonido, Inc. and Mark T. Hynes that

Sonido, Inc. will pay Mark T. Hynes, ten

percent (10%) of all sales made and paid for

via the internet, of music, videos, art, words,

and advertisement.” 193

As pointed out in the Plaintiff-Appellant’s Brief,

nowhere in the plain language of the contract are

sales limited ro sales made directly by Sonido, Inc.,

and nowhere in the contract are the words “direct” or

“website” used. 1% This is important to note as there

is a stark distinction between the terms “website” or

“WebPage” and the term “Internet.” Numercus

191 Please see Defendant-Respondent’s Brief at P. 11.

192 Td.

193 Please see R. 74.

194 Please see Footnote 74 of Plaintiff-Appellant’s Brief at P. 28.

102

websites and WebPages appear on and over the

Internet, but the Internet itself, as well as what is

conducted over it, is in no way confined to a website

or even a multitude of websites.19 Furthermore, the

term “all” is used to modify the Internet sales

referenced in the contract — thereby making the

contract applicable to all sales made over the

internet method as the Plaintiff-Appellant alleged in

his Complaint six years prior to the Motion.'% If the

language of the contract is taken at its face value —

separate from any outside input — then the plain

meaning of the contract is that Sonido has given

Mark Hynes an interest in ten percent (10%) of all

sales made by the Internet method — with no

included limitation as to who made the sales of

Sonido “music, videos, art, words, and

advertisement.” 197

Furthermore, the Plain Meaning Rule stands for

the rationale that a party has no right to induce

another to enter into a contract with him or her on

the supposition that his or her words would mean

one thing to the other party at the time of

contracting while hoping that a court would

thereafter give the words a construction more

advantageous to him or her.!% As stated, both a

plain reading of the contractual language and the

averments advanced in the Plaintiff-Appellant’s

Verified Complaint support a reading where the

contract applies to ali Internet sales to which Sonido,

'95 Please see Footnote 40 infra, at P. 12.

196 Please see {|16 of Plaintiff-Appellant’s Verified Complaint at

R. $7.

197 Please see R. 74.

1988 Gaultney-Klineman Art v. Hughes, 227 A.D.2d 221, 642

N.Y.S.2d 265, 32 U.C.C. Rep. Serv. 2d 421 (ist Dep't 1996);

Conopco, Inc. v. Wathne Ltd., 190 A.D.2d 587, 593 N.Y.S.2d 787

(1st Dep't 1993).

103

Inc. has right. Consequently, for the Defendant-

Respondent to seek to take advantage of a latent

ambiguity that it did not bring before the Court until

its reply papers runs contrary to the purpose of the

Plain Meaning Rule.

If the Defendant-Respondent truly seeks

application of the Plain Meaning Rule, then it

consents to all terms in the contract being

understood in their plain, ordinary, and popular

meanings !99 — meanings that should be supplied by

reference to the dictionary and relevant treatises

that supply the accepted meanings of the term, or

terms, in question. 20

199 Lopez v. Fernandito's Antique, Ltd., 305 A.D.2d 218, 760

N.Y.S.2d 140 (1st Dep't 2003); Benderson v. Wiper Check Inc.,

266 A.D.2d 903, 697 N.Y.S.2d 448 (4th Dep't 1999), order affd,

96 N.Y.2d 855, 730 N.Y.S.2d 29, 754 N.E.2d 1112 (2001).

200 See R/S Associates v. New York Job Development Authority,

98 N.Y.2d 29, 33, 744 N.Y.S.2d 358, 360, 771 N.E.2d 240 (2002)

(consulting dictionary for definition of “effective” when

construing the phrase “effective cost of funds”); Mazzola_v.

County of Suffolk, 143 A.D.2d 734, 735, 533 N.Y.S.2d 297 (2d

Dep't 1988) (consulting dictionary for meaning of ‘condemned’

and ‘condemnation’); see also Succo v. First Reliance Standard

Life Ins. Co., 16 Fed. Appx. 53 (2d Cir. 2001); S.E.C. v.

Eberhard, 2006 WL 17640, * 3 n. 7 (S.D. N.Y. 2006); Citadel

Equity Fund Ltd. v. Aquila, Inc., 371 F. Supp. 2d 510 (S.D. NLY.

2005), aff'd, 168 Fed. Appx. 474 (2d Cir. 2006).

It should be noted that the 1997 dictionary defines

“Internet” as “a large computer network linking smaller

computer networks worldwide. [{1990-95]” RANDOM HOUSE

WEBSTER’S COLLEGE DICTIONARY 683 (Sol Steinmetz ed., 2" ed.

1997). While “WebPage” is defined as “a single, usu. hypertext

document on the Word Wide Web that incorporate text,

graphics, sounds, etc.” RANDOM HOUSE WEBSTER’S COLLEGE

DICTIONARY 1456 (Sol Steinmetz ed., 224 ed. 1997). “World Wide

Web” is itself defined as “a system of extensively linked

hypertext documents: a branch of the Internet. Abbr. WWW

[1990-95]” RANDOM HOUSE WEBSTER’S COLLEGE DICTIONARY

1482 (Sol Steinmetz ed., 2"4 ed. 1997).

104

In summary, and given what is stated above, if

the Defendant-Respondent’s argument that the Plain

Meaning Rule was to be applied as a matter of law is

taken to its natural conclusion, then the Lower Court

would have committed at least two other errors, as it

did not apply the rule properly (seeing that it relied

upon factual determinations outside of the language

of the contract), and because it did not apply the

common, ordinary, and popular meanings of the

terms “Internet” and “all”.

Finally, when the Defendant-Respondent states

that it “is difficult to imagine how Sonido, a company

exclusively engaged in the business of music

production, would sell ‘words’ or ‘advertisement’

through third-parties’ websites”’2°!, it not only

ignores the position advanced in the Plaintiff-

Appellant’s Verified Complaint2°2 (a_ position

Similarly, the definition of “Internet payment” as supplied

by Black’s Law Dictionary is listed under “Cyberpayment”’,

which is itself defined as “A transfer of money over the Internet,

usu. through a payment service. — Also termed Internet

Payment.” BLACK’S LAW DICTIONARY 414 and 836 (Bryan A.

Garner ed., 8» ed. 2004).

201 Please see Defendant-Respondent’s Brief at P. 13.

202 In §6a(a) of his Verified Complaint, Plaintiff-Appellant

states that one purpose of the contract was to develop “internet

websites” in the plural as well as “other electronic means” to

“advertise the defendants’ (sic) products and to generate sales.”

R. 36. Added to this, 116 of the Complaint states that it “was

the intent of the parties that all sales of Sonido products which

result in income from any source by the internet method would

generate income for Sonido and Mark T. Hynes by the internet

method.” R. 37 (emphasis added). Finally, the Plaintiff-

Appellant stated in his Complaint, at 917, that the contract also

concerned “licenses”, which means that the Plaintiff-Appellant’s

Complaint has always presented sworn evidence that the intent

of the parties was to include the revenue from royalties.

As mentioned earlier (Footnote 15, P. 4 supra), this

evidence was before the Court on the Motion.

105

advanced roughly seven years prior), but also

continues to limit the contract to “websites” (a term

that is not included in the plain meaning of the

contract). Thus, when Defendant-Respondent denies

that the contract is applicable to royalties, it merely

continues to ignore the Plaintiff-Appellant’s

previously mentioned position, 2793 as well as the

plain meanings of the terms “all” and “Internet.”

2. THE INTERPRETATION BY THE COURT BELLOW DID

NOT CONFORM TO GOVERNING PRECEDENTS REGARDING

THE INTERPRETATION OF CONTRACTS:

As with the second section of this Reply Brief, the

following subsection address each of the sub-points

presented by the Defendant-Respondent, and will

correspondingly address each of the _ seven

subheadings listed by the Defendant-Respondent.

Although not under a subheading, the Defendant-

Respondent begins the section by stating that the

Plaintiff-Appellant failed to introduce admissible

evidence due to the impact of the Dead Man Statute,

CPLR 4519.29 Not only does this argument ignore

the fact that the Plaintiff-Appellant produced

evidence of trade usage and newspaper publications

stating the purpose of the contract,2®° which are most

certainly not excluded by operation of CPLR 4519,

but it also ignores the fact that if the Lower Court

had proceeded with summary judgment on the

grounds of having first excluded the Plaintiff-

have in fact not conformed its holding to governing

203 Id.

204 Please see Defendant-Respondent’s Brief at P. 16.

205 Please see R. 286 — 293.

206 Something that is indicated nowhere in the record.

106

precedent, as the Dead Man Statute will not be used

to preclude a non-moving party from meeting its

burden on a summary judgment motion.?°7

Furthermore, not only did the Defendant-

Respondent fail to meet its burden of establishing a

prima facie case, as discussed in the previous section,

but the Defendant-Respondent, as the moving party,

is also precluded from introducing arguments it did

not make on the Motion before the Lower Court.?%

A. INTERPRETATION IN LIGHT OF THE CONTRACT’S

PURPOSE:

The Defendant-Respondent argues that the Lower

Court interpreted the contract in accordance with the

purpose for which it was created per Plaintiff-

Appellant’s own admission “the intention of Sonido

in entering the 1997 Agreement was to sell music

through a website www.latinmusic.com...”2°9 What

the Defendant-Respondent fails to note, however, it

that the referenced portions of the record state quite

the opposite, as the Plaintiff-Appellant’s statements

207 Phillips v. Joseph Kantor & Co., 31 N.Y.2d 307, 338 N.Y.S.2d

882, 291 N.E.2d 129 (1972). See also Raybin v. Raybin, 15

A.D.2d 679, 224 N.Y.S.2d 165 (2d Dep't 1962)

208 See also 440 East 62nd Street Owners Corp. v. 440 East

62nd Street Associates, L.P., 217 A.D.2d 426, 629 N.Y.S.2d 44

(1st Dep't 1995); P.T. Bank Central Asia v. Chinese American

Bank, 229 A.D.2d 224, 654 N.Y.S.2d 117 (1st Dep't 1997)

Daubman v. Nassau County Civil Serv. Comm'n, 195 A.D.2d

602, 601 N.Y.S.2d 14 (2d Dep't 1993) (citations omitted). See

also Zafonte v. Steinhammer, 277 A.D.2d 450, 715 N.Y.S.2d 896

(2d Dep't 2000); Puderbaugh v mpl deral Credit

Union, 276 A.D.2d 992, 714 N.Y.S.2d 387 (3d Dep't 2000) (“the

issue was not raised in Supreme Court and is, therefore, not

reviewable” (citation omitted)).

209 Please see Defendant-Respondent’s Brief at P. 17 (citing R.

61).

107

that Defendant-Respondent cites?!° refer to multiple

“websites” and “other electronic means” — clearly not

limiting the contract to sales made directly by the

Defendant-Respondent over a single website.

Furthermore, to adopt such an_ unfavorable

reading of the Plaintiff-Appellant’s statements on a

motion for summary judgment not only violates the

rule that all evidence should be read in a light most

favorable to the non-moving party,?!! but also

violates the rule that any conflicting testimony

(especially in cases where the conflict is illusory and

based wholly upon a strained reading offered by the

moving party) itself creates an issue of fact

precluding summary judgment.?!2 It should be noted

that both of these principles are themselves

intricately linked to the rule that a court should not

attempt factual determination on a motion for

summary judgment.?!5

B. THE RULE AGAINST THE ADDITION OF TERMS:

The Defendant-Respondent argues that the Lower

Court did not violate the rule against the addition of

terms because the Lower Court applied the Plain

Meaning Rule along with the its assessment of the

purpose of the parties for entering the agreement.

As stated earlier in this Brief, the Lower Court did

210 Please see Defendant-Respondent’s Brief at P. 17.

211 Weiss v. Garfield, 21 A.D.2d 156, 249 N.Y.S.2d 458 (3d Dep't

1964).

212 Dollas v. W.R. Grace and Company, et al., 225 A.D.2d 319,

639 N.Y.S.2d 323, Prod.Liab.Rep (CCH) P 14,613 (Ist Dep't

1996); Natale v. Woodcock, et al., 35 A.D.3d 1128, 830 N.Y.S.2d

785, 2006 N.Y. Slip Op. 09985 (3d Dep’t 2006).

2003); Esteve v. Abad, 271 A.D. 725, 727, 68 N.Y.S.2d 322, 324

(1st Dep't 1947).

108

not apply the Plain Meaning Rule, and any

assessment of the purpose behind. the parties’

Agreement that it would have relied upon would

have inevitably rested on a factual determination not

settled by a fact-finder, which is error.?!4

Though Defendant-Respondent states that it is

Mark Hynes who tries to add terms to the agreement

by arguing that the intent of the contract was to

account for royalties, the Defendant-Respondent

itself offers an account where royalties are to be

taken as sales, as it states “Sonido would only have

paid a commission to Hynes if Sonido had itself

received payment for the goods sold via_ the

internet.”215

C. THE CONTRACT MUST BE INTERPRETED AS A

WHOLE:

The Defendant-Respondent appears to argue that

on account of the contract in question not being

complex, it is not necessary to interpret all of its

terms.2!6 This, however, runs contrary to governing

precedent, which states that a court should strive to

give meaning to every sentence, clause and word.?!7

D. THE RULE OF CONSISTENCY:

214 Please see P. 7, supra.

215 Please see Defendant-Respondent’s Brief at P. 19. Also, it

should be noted that Black’s Law Dictionary defines “royalty”

as: “A payment made to an author or inventor for each copy of a

work or article sold under copyright or patent.” BLACK’S LAW

DICTIONARY 1356 (Bryan A. Garner ed., 8 ed. 2004).

216 Please see Defendant-Respondent’s Brief at P. 18.

217 Travelers Cas. and Sur. Co. v. Certain Underwriters at

Lloyd’s of London, 96 N.Y.2d 583, 594, 734 N.Y.S.2d 531, 538,

760 N.E.2d 319, 32 Envtl. L. Rep. 20262 (2001).

109

Contrary to what is argued by Defendant-

Respondent,218 the consistency referred to in the

Rule of Consistency is internal consistency, and not

consistency with a factual record derived separately

from settlement by the fact-finder.?!9

E. THE RULE THAT CONDITIONS WILL BE

DISFAVORED:

The evidence on the record that the Lower Court

read a condition into the contract is revealed clearly

in the Appellant Brief.22° No further argument is

required here.

It should also be noted that the issue by

Defendant-Respondent with Plaintiff-Appellant’s

argument?22! that any position denying damages

(despite the elements for a claim of unjust

enrichment being mentioned in the _ Plaintiff-

Appellant’s Complaint)??? would ultimately lead to

both an absurd and an unjust result, amounts to no

more than a failure to understand the reasoning

behind a reductio ad absurdum argument, or is

merely an attempt at obfuscation.

F. THE RULE AGAINST FORFEITURE:

The evidence on the record that the Lower Court

read a condition into the contract, and that it thereby

rendered the contract illusory, is revealed clearly in

218 Please see Defendant-Respondent’s Brief at P. 20.

219 Lashins Arcade Co. v. Jorling, 221 A.D.2d 533, 536, 634

N.Y.S.2d 138, 141 (2d Dep't 1995).

220 Please see Footnote 145 of Plaintiff-Appellant’s Brief at P.

44.

221 Please see Defendant-Respondent’s Brief at P. 21.

222 Please see 4]6a of Plaintiff-Appellant’s Complaint at R. 36.

110

the Appellant Brief.222 No further argument is

needed here.

G. CONSTRUCTION AGAINST THE DRAFTSMAN:

The Defendant-Respondent’s argument “gainst

the rule that a contract should be strictly construed

against the drafting party rests on its argument that

the contract is not ambiguous.224 As the contract is

ambiguous as a matter of law,?2° the contract should,

consequently, be interpreted strictly against the

drafting party.

3. THE DEFENDANT-RESPONDENT IS INCORRECT IN

STATING THAT MARK HYNES FAILED TO SUBMIT ANY

EVIDENCE TO THE LOWER COURT IN SUPPORT OF HIS

INTERPRETATION:

As stated earlier in this Reply Brief,226 as well as

in the Appellant Brief,?27 the Plaintiff-Appellant

more than met his burden of production, as the only

issue of fact presented in the Motion was whether

the Defendant-Respondent had made Internet sales

“of any kind.”228 It was not until the Defendant-

Respondent’s reply that it argued that the contract in

223 Please see Footnote 145 of Plaintiff-Appellant’s Brief at P.

44.

224 Please see Defendant-Respondent’s Brief at P. 23.

225 Greenfield v. Philles Records, Inc., 98 N.Y.2d 562, 570, 750

N.Y.S.2d 565, 570, 780 N.E.2d 166 (2002); Teichman_by

Teichman v. Community Hosp. of Western Suffolk, 87 N.Y.2d

514, 520, 640 N.Y.S.2d 472, 474, 663 N.E.2d 628, 20 Employee

Benefits Cas. (BNA) 1532 (1996).

226 Please see P. 2, supra.

227 Please see Plaintiff-Appellant’s Brief, PP. 7-34, particularly

Footnote 57 in Plaintiff-Appellant’s Brief at P. 23.

228 Please see Defendant-Respondent’s Brief at P. 9, and R. 300

— 301.

111

question was limited to direct sales made by Sonido,

Inc.22° — a point that must necessarily be established

prima facie before any alleged failure to providing

evidence of direct sales would result in a non-moving

party’s failure to meet its burden on the Motion. 2°

Consequently, the burden did not shift to the

Plaintiff-Appellant to produce evidence on the motion

— though the evidence provided by Mark Hynes

would overcome the motion (if such issue had been

raised on the original Notice of Motion), as it is not

merely evidence of the meaning and purpose of the

contract, but evidence of breach as well.?3!

REPLY TO THIRD POINT

THE DEFENDANT-RESPONDENT IS INCORRECT IN

STATING THAT THE COURT BELLOW PROPERLY FOUND

THAT THE ABSENCE OF SALES EQUALED AN ABSENCE OF

DAMAGES

In the section that follows, the Plaintiff-Appellant

will address each of the three sub-points addressed

by the Defendant-Respondent with corresponding

headings.

1. THE PLAINTIFF-APPELLANTS DELAY IN SEEKING

DISCOVERY DID NOT WARRANT SUMMARY JUDGMENT:

The Defendant-Respondent alleges that Mark

Hynes failed through his own inaction to seek

discovery for many years.232 Not only does this

argument ignore the reasoning behind such delay

given by Plaintiff-Appellant (who stated — perhaps

223 Compare R. 305 — 328 to R. 294 — 301.

230 Sommer v. Federal Signal Corp., 79 N.Y.2d 540, 555, 583

N.Y.S.2d 957, 593 N.E.2d 1365 (1992).

231 Please see Footnote 57 in Plaintiff-Appellant’s Brief at P. 23.

232 Please see Defendant-Respondent’s Brief at P. 26.

112

misguidedly — that he believed it necessary for the

Defendant-Respondent to interpose an Answer before

discovery could begin),2*3 but also ignores the rule

that summary judgment should not be granted when

an issue of fact is actually presented.?34

2. THE DEFENDANT-RESPONDENT IS INCORRECT IN

STATING THAT THE PLAINTIFF-APPELLANT’S FAILURE TO

ALLEGE BREACH OF THE IMPLIED COVENANT OF GOOD

FAITH AND FAIR DEALING ON THE MOTION CONSTITUTED

A FAILURE TO PRESENT AN ISSUE OF MATERIAL FACT:

Defendant-Respondent’s second argument under

this point is that the presence of evidence on the

record that the Defendant-Respondent breached its

implied covenant of good faith and fair dealing

should not be counted as grounds for determining

that the Lower Court committed error because that

argument was not raised before the Court beilow.2%5

The fact that an argument was not made before

the Court bellow, however, does not necessarily

prevent the issue from arising on appeal, as a court

sitting on a motion for summary judgment must

consider al

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