United States District Court, Southern District of New York
May 24, 1991
ARNOLD WEISS CORPORATION, PLAINTIFF,
MANISHA SPORTSWEAR, INC., DEFENDANT.
The opinion of the court was delivered by: Haight, District Judge:
MEMORANDUM OPINION AND ORDER
In this diversity action, plaintiff is a corporate sales
representative which entered into a written contract with
defendant, a manufacturer and importer of apparel. Defendant
terminated the contract in a manner which plaintiff contends
violated its terms. Plaintiff moves under Rule 56, Fed.R.Civ.P.,
for partial summary judgment on the issue of liability. Defendant
cross-moves for summary judgment dismissing the complaint.
Plaintiff Arnold Weiss Corporation and defendant Manisha
Sportswear, Inc. entered into a written contract dated September
1, 1982 pursuant to which plaintiff acted as defendant's sales
representative. The contract set forth a schedule of commissions
payable by defendant to plaintiff whose details I need not
consider on these motions.
The contractual provision central to the case appears in ¶ 3,
The period of this agreement shall be one year
effective September 1, 1982, and shall be
automatically renewed from year to year unless
revoked by either party with a 120 written notice of
Plaintiff and defendant maintained this relationship for a
number of years. However, in a letter dated June 23, 1989,
defendant's vice-president, Dilip S. Katara, advised Arnold Weiss
of the plaintiff corporation that owing to adverse business
conditions, "we feel that we have no choice but to terminate our
contract with you dated September 1, 1982." Defendant's June 23,
1989 letter continues:
As per clause three of the contract this is our
notice for a hundred twenty (120) days for such
termination. After October 21, 1989 the override on
all sales will not be given. Only the regular agreed
commission will be paid to all the salesman.
Plaintiff contends that under the unambiguous wording of ¶ 3 of
the contract, the contract was automatically renewed for a year
from September 1, 1989, so that it remained in effect through
August 31, 1990. That is so, plaintiff contends, because
defendant did not send the requisite 120 day written notice of
cancellation, which to prevent automatic renewal under ¶ 3 had to
be received by plaintiff not later than April 30, 1989. As noted,
defendant's letter of termination was dated June 23, 1989.
Defendant contends that under the contract, "either side could
give 120 days notice of termination which was equivalent to a
selling season and then at the end of that time the contract was
terminated." Affidavit of Sham Lund, defendant's vice-president,
at p. 2.
In these circumstances, plaintiff moves for partial summary
judgment on the issue of liability, with the amount of damages to
be determined in subsequent proceedings. Defendant cross-moves
for summary judgment dismissing the complaint.
Plaintiff is entitled to partial summary judgment on the issue
¶ 3 of the contract is clear and unambiguous. Plaintiff is
entitled to its benefit. On September 1, 1989, in the absence of
timely prior notice of cancellation, the contract was
automatically renewed for an additional year. That is what the
contract says. Defendant could not, consistent with the
contract's terms, give a valid notice of cancellation earlier
than 120 days before the next anniversary date, namely, September
1, 1990. Accordingly plaintiff is entitled to claim the
contract's benefits through August 31, 1990.
The parties were at liberty to include a termination clause
consistent with defendant's professed understanding, but they did
not do so. To give the contract the construction for which
defendant contends would nullify the explicit provision that on
September 1 of each year, the contract "shall be automatically
renewed from year to year . . ." Defendant is not entitled in law
to argue for an interpretation which files in the face of clear
and explicit language.
Defendant argues that its interpretation is consistent with the
selling season in the industry. But the contract makes no
reference to "selling seasons" at all, let alone a reference
which would affect or abrogate the clear language of ¶ 3.
Defendant offers notes made by Weiss "preparatory to drafting
the final agreement." Lund affidavit p. 2. Defendant perceives in
those notes an interpretation inconsistent with plaintiff's
construction of the contract. That is by no means clear, but in
any event notes such as these, created before the contract was
entered into, are inadmissible under the parol evidence rule.
See, e.g., Leslie Fay, Inc. v. Rich, 478 F. Supp. 1109, 1113
(S.D.N.Y. 1979) (Sofaer, J.).
Plaintiff's motion is granted. Defendant's cross-motion is
denied. Counsel for plaintiff are directed to settle a judgment
consistent with this Opinion on seven (7) days' notice within
twenty (20) days of the date of this Opinion and Order.
The parties are directed to attend a status conference in Room
307 at 2:30 p.m. on July 12, 1991.
It is SO ORDERED.
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