The opinion of the court was delivered by: TENNEY
In this diversity action, the plaintiff, A.M. Kashfi ("Kashfi"), is seeking to recover payment for services he claims to have rendered in Iran for the defendant, Phibro-Salomon, Inc. ("Phibro"), in 1976. The plaintiff's claims are based on a letter agreement entered into by the plaintiff and Lazar Beresiner ("Beresiner"), who is a third-party defendant in this action. The plaintiff contends that Beresiner was acting on behalf of the defendant and its English subsidiary, Derby & Co. ("Derby") when he entered into the letter agreement with the plaintiff. The plaintiff is also asserting a quantum meruit claim for services rendered.
The defendant, Phibro, now moves for summary judgment pursuant to Fed. R. Civ. P. ("Rule") 56(c). Phibro argues that (1) Phibro was not a party to the contract, and therefore has no liability under the contract; (2) the corporate veil cannot be pierced in order to impose liability on Phibro; (3) the plaintiff's claim is illegal under the law of Iran; and (4) the plaintiff's claim is barred by the statute of limitations. For the reasons set forth below, the defendant's motion for summary judgment is granted.
The plaintiff, Kashfi, is an Iranian citizen currently residing in California. Phibro is incorporated in Delaware, and has its offices in New York. It is a trading and marketing organization that deals with commodities, including oil, metals, and minerals. Phibro was formerly known as the Engelhard Minerals and Chemical Corporation ("EMC").
Phibro has European subsidiaries located in England, Switzerland and Italy. Beresiner was hired by the Swiss subsidiary, Philipp Brothers A.G. ("PBAG"), and received his salary from them. Beresiner had his office at Derby's headquarters in London, and he reported to Derby's officers.
The letter agreement at issue here was written on Derby's stationery and was signed by Beresiner under Derby's name.
Based on the letter agreement, the plaintiff claims that the defendant owes him $24 million for the services he rendered during 1976.
The letter agreement provided that Kashfi would be paid 1% of the value of any oil that was sold as part of the oil barter transaction that was being proposed. The agreement states: "In view of the services you have rendered and will be rendering in the future in connection with the [oil barter] transaction...we herewith confirm our undertaking to pay you...one percent of the f.o.b. invoice value of each shipment of crude oil which will be lifted by our Group under [the oilbarter] agreement."
The services rendered by Kashfi, and for which he is seeking compensation, consisted of arranging meetings between the defendant
and key officials of the Iranian Government in connection with the oil barter transaction.
In March of 1976, the plaintiff was contacted by Beresiner, who was attempting to arrange an oil barter transaction between the Iranian government and Phibro. According to the plaintiff, Phibro proposed to facilitate the sale of Iranian oil on behalf of Iran, and the proceeds of the oil sales would be used by Iran to purchase military equipment from the United States.
The plaintiff alleges that between March and June of 1976 he set up a series of meetings between the defendant and various "key" Iranian officials, and that he arranged to have Iranian officials forward Phibro's proposal to the Shah of Iran for his consideration and approval. The plaintiff contends that in June 1976, the Shah approved the oil barter transaction and that the agreement resulted in the sale of $2.4 billion worth of Iranian oil, the proceeds of which were used by the Iranian Government to purchase American-made military aircraft.
The defendant denies that the oil barter transaction was ever executed. The defendant moved for summary judgment in 1983 on that basis. The defendant also requested that the Court impose a stay on discovery until the motion for summary judgment was resolved, which the Court did. The motion for summary judgment was subsequently denied in a ruling from the bench, but the parties were directed to brief the issues now before the Court. Although the stay on discovery is still in effect, the Court permitted the parties to depose the plaintiff and Beresiner.
The defendant, Phibro, argues that summary judgment should be granted (1) because it was not a party to the letter agreement, and (2) because the agreement is illegal under Iranian law and therefore is unenforceable. The Court agrees.
Summary judgment may be granted if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Rule 56(c); see generally 6 J. Moore, W. Taggart and J. Wicker, Moore's Federal Practice P 56.15 [1.-0] (2d ed. 1983). The party moving for summary judgment has the burden of showing that there are no material facts in dispute, and the court will resolve all ambiguities in favor of the party opposing the motion. See Heyman v. Commerce and Indus. Ins. Co., 524 F.2d 1317, 1319-20 (2d Cir. 1975).
If, however, the motion for summary judgment is supported by affidavits or other sworn testimony as provided by Rule 56(e), so that the moving party makes a prima facie showing that there is no genuine issue of material fact, then the nonmoving party must adduce "specific facts showing that there is a genuine issue for trial." Id.; see Barnett v. Howaldt, 757 F.2d 23, 26 (2d Cir. 1985). Summary judgment will not be denied on the basis of mere conclusory allegations, made without factual support. See Project Release v. Prevost, 722 F.2d 960, 968 (2d Cir. 1983).
After careful consideration of the record, and having heard oral argument on this matter, the Court concludes that the defendant's motion for summary judgment must be granted.
A. Parties to the Contract
The May 5th letter, upon which the plaintiff's claim is based, clearly and unambiguously sets forth Kashfi and Derby as the contracting parties. The contract gives no indication that Phibro was a party to the agreement or that Phibro intended to be a party. Nor is there any indication that either Kashfi or Beresiner, who agreed on the terms of the contract, intended to bind Phibro under the contract.
Nevertheless, the plaintiff argues that the letter agreement was not between Kashfi and Derby, but rather was between Kashfi and Phibro. Even though the agreement was written on Derby's stationery and was signed by Beresiner under Derby's name, the plaintiff claims that Phibro was the contracting party. It is not enough, according to the plaintiff, to look at the contract itself, but rather all the circumstances surrounding it must be considered. The plaintiff argues that Phibro is a party to the contract because Beresiner was employed by Phibro and orally represented that he was signing the letter agreement on Phibro's behalf. The Court rejects this argument based on the plain language of the letter agreement.
The Plaintiff contends that initially he entered into an oral agreement with Beresiner, and that the oral agreement was subsequently reduced to writing in the letter agreement of May 5, 1976. The letter agreement contains the terms agreed upon, and it appears to be a completely integrated agreement. See Restatement (Second) of Contracts § 209 (1981) (A letter confirming an oral agreement is a completely integrated agreement); J. Calamari & J. Perillo, Contracts § 3-2, at 102(2d ed. 1977) (A letter of confirmation generally acts as a complete integration if the other party makes no objection to its terms.) Where, as here, the parties have reduced their agreement to a writing, the parol evidence rule operates to exclude evidence of any prior or contemporaneous oral agreement which contradicts, varies, or adds to the terms of the written agreement. See Cortlandt v. E.F. Hutton, Inc., 491 F. Supp. 1, 4 (S.D.N.Y. 1979); Conn Organ Corp. v. Walt Whitman Music Studios, Inc., 67 A.D.2d 995, 413 N.Y.S.2d 725, 727 (App.Div. 1979).
On its face, the contract shows Kashfi and Derby to be the parties to the contract. Parol evidence cannot be introduced to contradict an essential term of the contract, see Cortlandt v. E.F. Hutton, 491 F. Supp. at 4, and in this instance, the identity of the parties is an essential term.
The agreement is written on Derby stationery. The name Derby & Co. Ltd. appears in bold capital letters in the upper left-hand corner of the stationery, and Derby's address and phone number appear in the right hand corner. The letter agreement was signed as follows: "Yours sincerely, DERBY & CO. LTD, [signature], Lazar D. Beresiner, Senior Consultant to the Engelhard Group." The signature line designates Derby as the signing party. The phrase following Beresiner's name is a descriptive phrase that identifies Beresiner. The signature clearly indicates that Beresiner was signing on behalf of Derby, not on behalf the Engelhard Group. See In re ...