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GRISSMAN v. UNION CARBIDE CORP.

December 20, 1967

Frank L. GRISSMAN, Plaintiff,
v.
UNION CARBIDE CORP., and Irving S. Cooper, Defendants



The opinion of the court was delivered by: HERLANDS

HERLANDS, District Judge:

 Three motions are before the Court: (1) a motion by defendant Union Carbide, under Fed.R.Civ.P. 56(e), based upon the Statute of Frauds, for summary judgment as to the first cause of action (in which Union Carbide is the sole defendant); (2) a motion by defendant Cooper, based upon the Statute of Frauds, for summary judgment as to the second cause of action (in which Cooper is the sole defendant); and (3) a motion, which is actually a branch of the second motion, by Cooper, pursuant to Fed.R.Civ.P. 12(b), to dismiss the third cause of action (in which Cooper and Union Carbide are defendants) for failure to state a claim upon which relief can be granted.

 The action was commenced in this Court on March 28, 1963. The complaint pleads three causes of action: (1) that Union Carbide breached an agreement to appoint plaintiff as exclusive distributor of a certain cryogenic system and to pay plaintiff 10% commission on sales of these units "for a period of ten (10) years, or for the life of the patent to be applied for by plaintiff in connection with said cryogenic system, whichever period was longer" (Complaint, paragraph 4); (2) that Cooper breached an agreement to allow plaintiff to retain all rights, patents and direct financial benefit from the sale of any machines developed by or with the assistance of plaintiff and also to assist him in promoting sales of these machines (Complaint, paragraph 11); and (3) that Cooper and Union Carbide conspired to dishonor their contracts with plaintiff (Complaint, paragraphs 16, 17).

 In answers served by Union Carbide on May 13, 1963 and by Cooper on June 5, 1963, defendants pleaded the Statute of Frauds as a complete defense on the ground that the alleged agreements could not be performed within one year and were not evidenced by any writing signed by the party to be charged or its agent.

 On February 5, 1965, the case was placed on the trial calendar, subject to the completion of discovery proceedings. Thereafter, extensive discovery proceedings -- including depositions of the parties and non-party witnesses and the propounding of written interrogatories -- were completed. On October 15, 1966, counsel signed a pre-trial order.

 I.

 Union Carbide's Motion For Summary Judgment

 Claiming that the agreement alleged in the first cause of action is barred by the Statute of Frauds, Union Carbide relies upon the pleadings, the deposition of plaintiff taken by defendants, plaintiff's answers to Cooper's interrogatories, and the pre-trial order. In addition, Union Carbide's attorney has submitted a moving affidavit. Plaintiff's attorney has filed an opposing affidavit. Because neither of these attorneys' affidavits is made on personal knowledge, they possess no probative value for purposes of this motion.

 Pursuant to Rule 9(g) of the General Rules of United States District Courts for the Southern and Eastern Districts of New York, Union Carbide has submitted a statement of the material facts as to which it contends "there is no genuine issue to be tried."

 Inasmuch as plaintiff has not filed a statement as required by Rule 9(g), the material facts set forth in defendant's statement "will be deemed to be admitted."

 In its Rule 9(g) statement, Union Carbide states there is no genuine issue to be tried as to the following material facts: (1) the agreement alleged in the first cause of action is not embodied in any writing subscribed by Union Carbide or its agent; (2) no performance of any of the terms of the agreement has been undertaken by Union Carbide; (3) all alleged oral conversations and negotiations took place in the State of New York; and (4) the terms of the agreement alleged in plaintiff's first cause of action are as follows: that in consideration for plaintiff's idea, know-how and advice, defendant agreed to appoint plaintiff as exclusive distributor of cryogenic devices and pay him 10% commission on all sales "for a period of ten years, or for the life of the patent which plaintiff was to apply for whichever period was longer."

 An examination of the pleadings, the pre-trial order, the depositions and the interrogatories demonstrates that there is no genuine issue of material fact to be resolved at a plenary trial. The Court concludes that the alleged agreement is barred by the New York Statute of Frauds. N.Y.General Obligations Law, McKinney's Consol. Laws, c. 24-A, § 5-701.

 The alleged agreement has a duration of at least ten years. Indeed, if plaintiff were to secure a patent on the cryogenic device, the agreement would extend for an even longer period. By the very terms which plaintiff ascribes to the agreement, it cannot "be performed within one year from the making thereof". N.Y.General Obligations Law, § 5-701(1), and consequently comes within the New York Statute of Frauds. Nurnberg v. Dwork, 12 A.D.2d 612, 208 N.Y.S.2d 799 (1st Dep't. 1960), aff'd mem. 12 N.Y.2d 776, 234 N.Y.S.2d 721, 186 N.E.2d 568 (1962); Perrin v. Pearlstein, 314 F.2d 863 (2d Cir. 1963); Ginsberg Machine Co. v. J & H Label Processing Corp., 341 F.2d 825 (2d Cir. 1965).

 Plaintiff, however, argues that the agreement can possibly be performed within one year because it is subject to defendant's decision to manufacture and market the cryogenic unit. [Plaintiff's Answer Number (1) to Defendant Cooper's Interrogatories]. He contends that the agreement can be performed within one year because Union Carbide either may ...


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