# Appendix — Hynes v. Sonido, Inc. (No. 08-1331) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386017_0452%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 2008 ## Text APPENDIX A 11 N.Y.3d 827, 897 N.E.2d 1079, 868 N.Y.S.2d 595 Mark Hynes, Appellant, Vv 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. Copr. (c) 2009, Secretary of State, State of New York. 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 Vv 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. Copr. (c) 2009, Secretary of State, State of New York 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. 10 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. 1] 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. 13 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. 14 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. 18 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? 19 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. 20 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? 22 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.) 23 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? 24 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. 25 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 — 26 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? 27 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? 28 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. 29 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 30 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. 31 EXHIBITS MARK HYNES DIRECT EXAMINATION ee I NS clans ccnnessonecxesensvvessscssapnoekaunt 7 EF PRIN occ cccccscccsccccsencccsccesesesah 12 DIRECT EXAMINATION oid a cevcsccncecescesnesscaveveetseenas 13 MAGGIE BURBANO DIRECT EXAMINATION BY BEI. BINGR: oo... sccocccss.ccecscecessconcsoeneons 19 FILED FEB 21 2007 NEW YORK COUNTY CLERK’S OFFICE 32 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 33 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, Vv Sonido, Inc., Respondent. Motion for reargument denied. 34 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). 36 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 37 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 38 **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 39 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, (c) purchasing, with plaintiffs own money, 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. 40 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. 4] 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. 42 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) 43 ek [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 44 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 45 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. 46 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, 47 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 48 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, 49 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 50 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 51 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). 52 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). 53 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). 54 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). 56 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 57 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. 58 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.”). 59 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). 60 (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 61 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). 62 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. 63 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). 64 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). 65 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). 66 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). 67 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). 68 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). 69 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) 70 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). 71 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). 72 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). 73 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). 74 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). 75 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 76 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). 77 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). 78 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). 79 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). 8] 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). 82 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. 83 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). 84 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. 85 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. 86 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. Register.Com, Inc., 304 A.D.2d 176, 760 N.Y.S.2d 13 (ist Dep’t 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 88 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. 89 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 90 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- [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386017_0452%3A2. Public record. Not legal advice.