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ESTATE OF HOFFMAN v. NABISCO

January 13, 1978

ESTATE OF HAROLD A. HOFFMAN, by Administrator Connie E. Hoffman, Plaintiff,
v.
NABISCO, INC., Defendant



The opinion of the court was delivered by: DUFFY

OPINION AND ORDER

 KEVIN THOMAS DUFFY, District Judge.

 The Estate of Harold Hoffman, plaintiff herein, has brought this action seeking an injunction and damages for breach of contract, trademark violations and unfair competition. The action was originally brought in New York State Supreme Court but removed here by defendant Nabisco, Inc. Defendant now moves to dismiss the first and fourth causes of action of the complaint for failure to state a claim upon which relief can be granted. Plaintiff opposes the motion and cross-moves for summary judgment on its first claim.

 Plaintiff's first cause of action seeks an amount of $90,588 allegedly due under a contract entered into between Harold Hoffman and Nabisco. Nabisco claims that the amount due is, in actuality, $40,588 and that it is willing to pay that amount into court upon dismissal of the claim. Plaintiff, by cross-motion, asks for summary judgment on the contract, which is made part of the pleadings, claiming that its validity has been conceded. Nabisco, however, asserts that the validity of the contract is not conceded and that, in any case, ambiguities present in the contract preclude summary judgment.

 The contract which is the subject of the first motion was entered into on June 24, 1970. By its terms Nabisco acquired certain rights in Hoffman's patented high protein food process and the product thereof, called "VPC". In consideration of these rights, Nabisco was to make payments to Hoffman at six-month intervals. Plaintiff and Nabisco now dispute whether payment was to precede or succeed the applicable six-month period. Both agree that $25,000 was tendered at the time the contract was executed. However, while plaintiff characterizes this as a down payment only, with actual payment for the first six months to occur on December 24, 1970, Nabisco calls it a first payment and proof that payments were made in advance of the applicable six-month interval. Plaintiff insists that payment was due at the end of each interval. Thus, according to plaintiff, when Nabisco terminated the contract in February 1977, as it had a right to do, it allegedly owed accrued payments to December 1976, plus an additional amount, prorated to the effective date of termination.

 Both parties point to the language of the contract in support of their respective positions. Article V concerns payments to be made by Nabisco. The relevant sections read as follows:

 
V. Payments by Nabisco
 
Simultaneously with the execution of this Agreement, Nabisco has paid to Principal the sum of TWENTY-FIVE THOUSAND ($25,000.00) DOLLARS, receipt of which is hereby acknowledged by the Principal. In addition to said payment Nabisco promises and agrees to pay to the Principal the following amounts while this Agreement remains in effect:
 
1. Nabisco agrees to pay at six month intervals commencing six months from the date of the signing of this Agreement, either (1) five additional payments of $25,000.00 each so that a minimum total of $150,000.00 will have been paid to Principal during the first three years this Agreement is in effect, or
 
(2) five additional payments each equal to the amount of Royalty as outlined below in Paragraph 8 which would be due for the applicable six month period, whichever is greater. In the event National Distribution does not commence during the fourth year following the signing of this Agreement, Nabisco agrees to increase the six month interval payments from $25,000.00 to $50,000.00 until National Distribution is achieved.
 
2. (DELETED) (SIC)
 
3. During the first three years National Distribution has been attained Nabisco agrees to pay Principal in equal quarterly installments a total of
 
(a) A minimum of $250,000 each year, or
 
(b) The Royalty as outlined below in Paragraph 8, ...

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