plaintiffs failed to fulfill the requirements for filing a cross-motion for summary judgment, review of plaintiffs' assertion regarding the definition of "Products" is appropriate in order to delineate material issues for trial. See Fraser v. Doubleday & Co., 587 F. Supp. 1284, 1287 (S.D.N.Y. 1984) (stating that pursuant to Fed. R. Civ. P. 56(d), a court may issue an order specifying the facts which do not appear to be in substantial controversy if it finds that full summary judgment cannot be granted because there are other genuine issues of material fact to be tried).
The Second Circuit has held that "summary judgment as to the meaning of a contract term may not be granted when the term's meaning is not clear or is reasonably susceptible to more than one interpretation." Record Club of Amer. v. United Artists Records, 890 F.2d 1264, 1270 (2d Cir. 1989); see also Brass, 987 F.2d at 148; Hunt Ltd. v. Lifschultz Fast Freight, Inc., 889 F.2d 1274, 1277 (2d Cir. 1989). Ambiguous language as been defined as that which is "capable of more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire integrated agreement and who is cognizant of the customs, practices, usages and terminology as generally understood in the particular trade or business." Seiden Associates, 959 F.2d at 428 (citations and internal quotations omitted); see also Curry Road, 893 F.2d at 511.
Applying the foregoing guidelines, the Court finds that both plaintiffs' and defendant's claimed definitions of the term "Products" are plausible and that the Agreement is thereby ambiguous on the meaning of the term. Plaintiffs' interpretation of the term is attractive in that the definition, "food products. . .," would directly match the defined term "Products." Defendant's asserted meaning does not comport as elegantly with the text of the recital. Defendant's reading would require concluding that the recital was poorly drafted, as the term "Products" would have no noun as a direct referent.
Defendant's proposed definition, on the other hand, is more in accord with the Agreement as a whole. If plaintiffs' suggested meaning of "Products" were used, the provisions in Section 10 for transferring rights and obligations under the Agreement would impose obligations contrary to common sense. Section 10 provides that the "Purchaser" may transfer the trademarks and the technical information to any person, provided that the person, inter alia, assumes all of the "Purchaser's" obligations under the Agreement, including those requiring payment of sales commissions. Upon such assumption, the "Purchaser" would be relieved of all its obligations under the Agreement, except for those requiring payments for products sold prior to the date of assignment. Under plaintiffs' interpretation of the term "Products," a transferee would be liable for commissions not only on flat breads the transferee produces using the technical information assigned but also on any flat breads sold after the transfer by the prior "Purchaser," whether or not made using the assigned technical information. The Court seriously doubts that any transferee with an ounce of business sense would agree to assume an obligation to pay commissions on sales of goods over which the transferee would have no control and from which it would receive no benefit.
Although the Agreement is ambiguous as to the proper meaning of the term "Products," clarity as to the meaning of the term is not essential in deciding whether to issue an order under Fed. R. Civ. P. 56(d). Section 3 of the Agreement provides that defendant is obligated to pay Golden Associates a commission on the "net sales proceeds received by Purchaser from sales of the Products." (Emphasis added). According to a stipulation of the parties filed on October 5, 1992, Devonsheer, the "Purchaser" under the Agreement, was acquired by Arnold. Arnold is therefore to be substituted for Devonsheer as the "Purchaser." Unless in the assignment of the Agreement from Devonsheer to Arnold, Arnold agreed that its affiliates would have the same contractual obligation to pay commissions as Arnold, and neither party has presented any agreement to this effect, the Court cannot see how JJ Flats, Arnold's indirect affiliate, could be liable to plaintiffs for commissions. Lack of clarity on the meaning of "Products" does not in any way obscure the unambiguous language in Section 3 limiting plaintiffs' rights to commissions only on net proceeds "received by Purchaser." The Court cannot rewrite a clear provision simply because plaintiffs now perceive the bargain they struck to be unfair.
Although the Court does need not refer to parol evidence to decide that plaintiffs are not entitled to commissions on sales of JJ Flats flat bread products,
the Court notes that Golden's sworn affidavit confirms the Court's reasoning:
The defendant's obligation was to pay me my commission indefinitely. This was our intent so long as the defendant produced and sold a flat bread product. The defendant sought to get out of this agreement and caused another company (J.J. flats [sic]) to sell it an identical product. This though should not permit the defendant to avoid its obligations under the agreement.
(Golden Aff. at 5.)
The Court therefore concludes that an order pursuant to Fed. R. Civ. P. 56(d) is appropriate and finds that plaintiffs are not entitled under Section 3 of the Agreement to commissions on flat breads sold under the JJ Flats trademark. Obviously, this conclusion does not preclude defendant's liability for any breach of its good faith obligation to promote plaintiffs' flat breads.
C. Defendant's Motion for Summary Judgment with Respect to the Tortious Interference Claim
Defendant is entitled to summary judgment with respect to plaintiffs' claim that defendant tortiously interfered with the Agreement between plaintiffs and Devonsheer. The elements of tortious interference are (1) the existence of a valid contract between plaintiff and a third-party; (2) the defendant's knowledge of the contract; (3) the defendant's intentional procurement of a breach by the third party; and (4) resulting damages. See Resource Developers, Inc. v. Statue of Liberty-Ellis Island, 926 F.2d 134, 142 (2d Cir. 1991); Enercomp, Inc. v. McCorhill Publishing, Inc., 873 F.2d 536, 541 (2d Cir. 1988); Universal City Studios, Inc. v. Nintendo of Am., Inc., 797 F.2d 70, 75 (2d Cir. 1986), cert. denied, 479 U.S. 987, 93 L. Ed. 2d 581, 107 S. Ct. 578 (1986) (citations omitted). Arnold is the successor in interest to Devonsheer under the Agreement. As such, Arnold cannot be liable in tort for inducing the breach of its own rights and obligations under the Agreement. See Janmort Leasing, Inc. v. Econo-Car Int'l, 475 F. Supp. 1282, 1292 (S.D.N.Y. 1979). Moreover, Plaintiffs have not alleged that Arnold's purchase of Devonsheer in 1985 was tortious; rather, the tortious interference claimed relates to CPC's purchase of JJ Flats in 1989, an event in which Arnold was not directly involved. Therefore, summary judgment in favor of defendant Arnold is appropriate with respect to this claim.
Based on the foregoing, defendant's motion for summary judgment is denied as to plaintiffs' breach of contract claim, and granted as to plaintiffs' improper termination and tortious interference claims. Pursuant to Fed. R. Civ. P. 56(d), the Court rules that Section 3 of the Agreement does not entitle plaintiffs to commissions from sales of JJ Flats flat bread products.
Joanna Seybert, U.S.D.J.
Dated: December 5, 1994