moves for the dismissal of the unfair competition claim; the other claims are each addressed in turn.
A. Breach of Contract
Both plaintiffs claim to have had long-term oral contracts with each of the publisher defendants, which did not permit cancellation "except for cause", compl. P 55, and the complaint asserts that the publisher defendants breached these agreements by terminating plaintiffs' distributorships without proper notice and without cause. Compl. PP 123,128,133,143,148,153. The publisher defendants argue that any such contract would be void under the New York statute of frauds which invalidates unwritten agreements that "by [their] terms [are] not performed within one year from the making thereof . . ." N.Y. Gen. Oblig. Law § 5-701(a)(1).
"An oral contract for an otherwise unlimited term cannot be brought within the one-year permissible period of section 5-701(a)(1) by a termination contingency that is exercisable only by the plaintiff." Burke v. Bevona, 866 F.2d 532, 537 (2d Cir. 1989). Furthermore, a contract is not "performed" if it is breached. Therefore, if defendant's only right to terminate an oral contract within a year is triggered by plaintiff's breach, the contract is void under the statute of frauds. D & N Boening, Inc. v. Kirsch Beverages Inc., 63 N.Y.2d 449, 483 N.Y.S.2d 164, 167-68, 472 N.E.2d 992 (1984). Plaintiffs claim the contracts were terminable only "for cause". Therefore, the question becomes whether the only "cause" contemplated by the parties was plaintiffs' breach of contract or whether defendants might have justified termination of the distributorships for reasons that did not constitute a breach by plaintiffs. The Second Circuit has held that one party may terminate a contract for a "just cause" that does not amount to a breach by the other party. Ohanian, 779 F.2d at 107-08; Wanamaker v. Columbian Rope Co., 740 F. Supp. 127, 136-37 (N.D.N.Y. 1990); see also Weiner v. McGraw-Hill, Inc., 57 N.Y.2d 458, 463, 457 N.Y.S.2d 193, 196, 443 N.E.2d 441 (1982); Buddman Distribs., Inc. v. Labatt Importers, Inc., 91 A.D.2d 838, 458 N.Y.S.2d 395, 396 (4th Dept. 1982). However, we are mindful of the holding in Burke, 866 F.2d at 538 (citing the dissent in Ohanian with approval), that the termination provision must be expressed, not implied, to bring an oral contract within the statute of frauds' one-year period. Thus, we underscore that if it is shown that the only "cause" contemplated by the parties in the instant case was plaintiffs' breach of contract, then the contract will not be enforced against defendants. However, unless and until such evidence is presented to the court, we cannot find these contracts void under the statute of frauds. The publisher defendants' motion to dismiss the contract claims is denied.
B. Tortious Interference with Contractual, Pre-Contractual, and Business Relationships
Plaintiffs' twenty-second and twenty-sixth claims for relief allege tortious interference with plaintiffs' contractual and pre-contractual relations and tortious interference with plaintiffs' existing and prospective business relationships against NMDU, La Chance, Pelham, American, and Orlando. The latter three defendants move to dismiss the claims. Defendants argue that the tortious interference with contractual relationships claim should be dismissed because the contracts with which they are alleged to have interfered are void under the statute of frauds. Since the relevant contracts have not been shown to be void under the statute of frauds, defendants argument is without merit and their motion is denied. However, to state a claim for tortious interference with pre-contractual relationships, a plaintiff must allege that a contract would have been entered into had it not been for the malicious, fraudulent or deceitful actions of defendants. CBS, Inc. v. Ahern, 108 F.R.D. 14, 27 (S.D.N.Y. 1985). The complaint in this case fails to state a claim for such a tort because it does not allege any contractual negotiations or expectations by plaintiffs with which defendants interfered.
If plaintiffs are unsuccessful in establishing that they had an enforceable contractual relationship with the publisher defendants, they may still establish that La Chance, NMDU, Pelham, American, and Orlando tortiously interfered with plaintiffs' existing and prospective business relationships. To state a claim for tortious interference with an at-will business relationship, plaintiffs must claim malice or use of unlawful means by defendants. NRT Metals, Inc. v. Laribee Wire, Inc., 102 A.D.2d 705, 476 N.Y.S.2d 335, 338 (1st Dept. 1984). Plaintiffs' allegations of bribery and extortion are sufficient to support this claim.
For the foregoing reasons the federal and state antitrust claims are dismissed along with the common law claim for tortious interference with pre contractual relations. However, the motion is denied as to the RICO claim and the other common law allegations.
Dated: New York, New York
May 22, 1993
William C. Conner
United States District Judge