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GRANDONICO v. CONSORTIUM COMMUNS. INTL.

July 1, 1983

JULE GRANDONICO, Plaintiff,
v.
CONSORTIUM COMMUNICATIONS INTERNATIONAL, INC., Defendant



The opinion of the court was delivered by: LASKER

LASKER, D.J.

 Jule Grandonico brings this action for breach of a written contract to pay commissions. He moves for summary judgment pursuant to Fed. R. Civ. Pr. 56, contending that there are no genuine issues of fact as to the interpretation of the contract and as to whether it has been breached.

 The following facts are undisputed. On June 11, 1979, Grandonico entered into a written contract with Consortium Communications International, Inc. ("CCI") to work as an independent contractor selling CCI's services to third parties in return for commissions at a specified rate. The contract term was one year, subject to automatic renewal unless either party terminated the agreement in writing within thirty days prior to the end of the annual term. The contract provided that it could not be altered, amended or terminated except in a writing signed by both parties.

 In July, 1980, the parties discussed the possibility of changing Grandonico's relationship with CCI. Whether those discussions culminated in an agreement is disputed. In any event, Grandonico continued to perform the same sales services for CCI until early December, 1981, at which time he was discharged because, according to CCI, he threatened CCI president Yaakov Elkon that if he were not given a written employment agreement, he would advise potential CCI investors that CCI was engaged in certain alleged, unspecified improper activities. Grandonico denies having made the alleged threat, and asserts that it was a fabrication made in order to justify his discharge.

 CCI contends that summary judgment is inappropriate because there are genuine issues of fact as to: (a) whether the parties entered into an oral agreement superseding the written contract in July, 1980; (b) whether Grandonico is estopped from enforcing the written contract on the basis of the oral agreement; (c) how the written contract should be interpreted, assuming that it is binding; and (d) the facts concerning the alleged extortion. *fn1" It is not disputed that CCI owes Grandonico reimbursement for expenses incurred by Grandonico in connection with CCI sales; however, CCI asserts that judgment should not be entered with respect to that claim because CCI may be entitled to a greater sum in connection with its counterclaims.

 A. The Oral Agreement

 CCI contends that the written contract is of no force and effect because it was superseded by an oral agreement entered in July, 1980. In its Answer to the Complaint, CCI described the oral agreement as follows:

 
"In July, 1980, in consideration of the defendant paying plaintiff the sum of $50,000 per year and 1% of all sales generated by the plaintiff, and in further consideration of the availability of a corporate title to the plaintiff, the plaintiff abandoned and waived the June 11, 1979 agreement . . ."

 (Answer, para. 30). The oral agreement is subsequently described in the Answer as being a "month-to-month arrangement." (Answer, para. 46).

 Grandonico has a different view of what transpired in July, 1980. In his affidavit, he recounts discussions with the president of the company, Yaakov Elkon, and one of its principal investors, leading to Grandonico's proposing a five-year employment contract at $60,000 per year plus two percent commission and "some form of equity participation." Grandonico asserts that he "made it clear" to Elkon that he "would not give up the [written] agreement [of June, 1979] unless [he] was given a five-year written employment contract." (Affidavit of Jule Grandonico, para. 12). According to Grandonico, Elkon informed him sometime later that CCI agreed to all of his terms, except for the proposed salary and commission rate, which they suggested lowering to $4,000 a month and one percent commission. Grandonico states that at that point, he "accepted." (Id., P 13). He asserts that he continually requested that the company put the contract in writing, and was told that it would be done. (Id. P 23).

 Thus, under Grandonico's view of the facts, the oral agreement was explicitly conditional on the execution of a written contract. No written agreement ever having been executed, the proposed new contract never went into effect, and, accordingly, Grandonico brings this action to enforce his rights under the June, 1979 written contract, which concededly has never been terminated in accordance with its terms by written notice of termination within thirty days from the conclusion of the annual term.

 In support of its assertion that an oral contract was in fact entered between the parties for an at-will employment agreement, CCI rests on its pleadings. In opposition to Grandonico's summary judgment motion, CCI has submitted a volume of paper, including an affidavit by Elkon and excerpts of the deposition transcripts of Elkon, the former president of the company, the chairman of the board of the company and Sam Klein, one of the principal investors. We have reviewed carefully the entire submission. At no point does any of these individuals state that he entered into an oral contract with Grandonico in July, 1980. *fn2"

 Instead of submitting proof in support of its claim, CCI relies on its characterization of Grandonico's "admissions" and his conduct. Elkon asserts that Grandonico "admitted" entering into an oral employment agreement "terminable at will." (Elkon Affidavit, para. 13). Elkon informs us that we will find those "admissions" in paragraph 13 of Grandonico's Affidavit and pages 211-234 of his deposition. However, in paragraph 13 of his Affidavit, Grandonico, in direct contradiction, states that he had been told that CCI agreed to all of Grandonico's terms, which, as spelled out in paragraph 12, included a written contract for a five-year term. Pages 211-234 of the deposition are to similar effect, see especially pages 218 and 223.

 Nor does Grandonico's conduct support CCI's allegation of an oral contract. Under New York law, when a written contract provides that it cannot be altered except in writing, it cannot be altered except in writing, subject to the narrow exception that if the parties agree orally to alter the contract, the oral agreement may be proven by partial performance of the oral agreement, but only if the performance is "unequivocally referable to the oral agreement to ...


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