apparently provided to the individual editors of the Computer Series. (Id.)
Eventually, defendants ceased sending Liebowitz the status reports. Defendants indicate that the 1988 report was the last and that Church died later that year. (Def. 3(g) Ex. 31) At a meeting in 1989, it seems that Liebowitz asked Peter T. Shepherd, who apparently replaced Church as editorial director of Pergamon Press plc, to resume providing status reports on the Computer Series journals. Shepherd wrote to Liebowitz after the meeting that he would "arrange for monthly production and circulation reports to be sent to you on a regular basis" for a number of journals, including most of the Computer Series journals, C&S, and some journals not involved in the present suit. (Pl. 3(g) Ex. 60) According to plaintiffs, however, Shepherd never fulfilled this promise. In 1992, after the commencement of this suit, Liebowitz wrote to Richards at Pergamon to demand that Pergamon resume supplying plaintiffs with status reports on the Computer Series journals. (Def. 3(g) Ex. 32) Shepherd responded to that letter for Pergamon, refusing to supply the reports in light of this litigation. (Id.) Plaintiffs then added defendants' refusal to supply the reports to their complaint as a cause of action for breach of contract.
Not every promise is a contract. The express terms of the parties' 1971 Agreement regarding the Computer Series make no reference to status reports. Plaintiffs' own statements indicate that any reports provided were provided only after Liebowitz requested such reports in 1975, four years after the 1971 Agreement initiating the Computer Series. It thus seems clear that the reports were not provided pursuant to the 1971 Agreement. For defendants to be bound by any promise to provide the status reports, there must be some contractual obligation independent of the 1971 Agreement.
Plaintiffs have failed to prove the existence of an implied contract that obligates defendants' to provide the status reports. They have offered no evidence that any consideration was offered by them in return for defendants' alleged promises to provide the status reports. Plaintiffs rely on defendants' intermittent provision of reports from 1976 through 1988 as evidence that defendants were obligated to provide such reports. To the extent that anyone would have an obligation, however, created by defendants' one-sided performance it would be plaintiffs, who have benefitted therefrom. While in some circumstances a contract may be implied by operation of law from the conduct of the parties, this normally is done when one party seeks to collect the benefit due to it in return for a benefit it has conferred on the other party.
See, e.g., Longo v. Shore & Reich, Ltd., 25 F.3d 94, 98 (2d Cir. 1994). Here plaintiffs seek to impose a continuing obligation on defendants to provide a benefit to plaintiffs without any corresponding obligation on plaintiffs.
Without consideration there is no contract. Roth v. Isomed, Inc., 746 F. Supp. 316, 319 (S.D.N.Y. 1990).
Defendants' motion for summary judgment dismissing Count III of the complaint is granted.
The Pre-1989 Payments (Count IV)
Plaintiffs claim that defendants withheld a portion of the payments due to plaintiffs under their various agreements over a period of years stretching back at least to 1982. Under an agreement reached between AERDCO and Pergamon in 1979 (the "1979 Agreement"), Pergamon promised to pay AERDCO $ 120,000 per year, subject to upward or downward adjustment depending on subscriptions. (Pl. 3(g) Ex. 61 P 1) For each journal which, as of the date of the agreement, had more than 450 "library subscribers" and that subsequently should fall below that 450 subscription level, AERDCO's compensation would be reduced by $ 10,000. For each journal which, as of the date of the agreement, had less than 450 "library subscribers" and that subsequently should rise above 500 subscriptions, AERDCO's compensation would be increased by $ 10,000. (Id.) Plaintiffs contend that subscription data provided to them by defendants in the course of this litigation show that they have been underpaid since perhaps as early as 1981 for two journals that by then had achieved subscription levels above 500.
Defendants assert that in fact they overpaid plaintiffs for certain years during the relevant period, that much of the period falls outside the statute of limitations, and that the entire Count is barred by laches and waiver. Since laches or waiver would dispose of the entire Count, the Court turns first to these defenses.
Plaintiffs' claim appears to be, principally, for damages caused by defendants failure to make payments allegedly due under their contract. (See Cpt, Prayer for Relief PP 2 & 4) Such a claim is an action at law, and not a suit in equity. Laches is a defense only against claims in equity and not at law. County of Oneida, New York v. Oneida Indian Nation of New York State, 470 U.S. 226, 244 n.16, 84 L. Ed. 2d 169, 105 S. Ct. 1245 (1985); United States v. Gordon, 78 F.3d 781, 786-87 (2d Cir. 1996); Golotrade Shipping and Chartering, Inc. v. Travelers Indemnity Co., 706 F. Supp. 214, 220 (S.D.N.Y. 1989); Kahn v. New York Times Co., 122 A.D.2d 655, 663, 503 N.Y.S.2d 561, 567 (1st Dept. 1986). Thus, plaintiffs' laches, if any, is no bar to any claim for damages arising from defendants' failure to make payments due under the contract.
Laches might be available to whatever extent plaintiffs prayer for an order terminating their various publishing agreements seeks an equitable remedy. (Cpt, Prayer for Relief P 8(b)). The point is of little significance, however, as defendants have failed to prove the absence of a genuine issue as to an essential element of laches.
Laches is a party's unexcused and unreasonable delay in asserting its rights and prejudice therefrom to another. Portland Audubon Society v. Lujan, 884 F.2d 1233 (9th Cir.) (knowledge, or reason to know, of legal right is indispensable element of laches), cert. denied, 494 U.S. 1026, 108 L. Ed. 2d 608, 110 S. Ct. 1470 (1989); Stone v. Williams, 873 F.2d 620 (2d Cir. 1989) (plaintiff must show "justified ignorance" of facts constituting cause of action), cert. denied, 493 U.S. 959, 110 S. Ct. 377, 107 L. Ed. 2d 362 (1989); Grant Airmass Corp. v. Gaymar Industries, Inc., 645 F. Supp. 1507 (S.D.N.Y. 1986) (laches depends upon plaintiff's actual or constructive knowledge of facts affecting his rights).
Plaintiffs' demand, in a complaint filed in 1993, for increased payments which may have accrued as early as 1981 certainly exhibits delay. They claim that they were unaware until they obtained discovery in this litigation that C&E and COMPUTERS & CHEMISTRY had exceeded 500 subscriptions some than ten years earlier because defendants had withheld subscription data.
Defendants, however, have called the Court's attention to plaintiff Liebowitz's own declaration, in which he stated that "For years, Pergamon also provided me with the circulation figures for each journal." (Dabney Decl. P 4 & Ex. H) Thus it would appear that any failure on plaintiffs' part to realize that they were being underpaid, if indeed they were, was due to their own lack of diligence.
Lack of diligence, by itself, however, is insufficient to support a claim of laches. The party seeking to prove laches must show also that it has been prejudiced by the other party's delay. Majorica, S.A. v. R.H. Macy & Co., Inc., 762 F.2d 7, 8 (2d Cir. 1985). Here, laches is inapplicable because defendants have failed to establish that they were prejudiced by plaintiffs' failure to assert their rights until now. The documentary evidence shows clearly that defendants were aware in 1983 that C&E and COMPUTERS & CHEMISTRY had achieved subscription levels in excess of 500. (Pl. 3(g) Ex. 62) Defendants' protestations now that they have been prejudiced by plaintiffs' delay is unconvincing when they have been aware all along of the existence of a possible claim. The only evidence of prejudice that defendants offer is the death of Robert Maxwell, a witness who might have been able to shed light on the terms of Pergamon's and AERDCO's 1979 negotiations. As plaintiffs point out, however, Pergamon employees Richards and Miranda, both of whom are alive, were closely involved in Pergamon's dealings with AERDCO in 1979. Moreover, the crucial evidence of what the parties intended by the 1989 Agreement is contained in the Agreement itself. Maxwell's testimony would not have been conclusive, and Miranda and Richards are available.
At the very least, questions of fact preclude summary judgment in defendants' favor on the ground of laches.
Defendants next contend that plaintiffs have waived any claim for the alleged underpayments. "A waiver is the voluntary abandonment or relinquishment of a known right. It is essentially a matter of intent which must be proved." Jefpaul Garage Corp. v. Presbyterian Hosp. in City of New York, 61 N.Y.2d 442, 446, 474 N.Y.S.2d 458, 459-60, 462 N.E.2d 1176 (1984). Defendants have offered no evidence to show that plaintiffs had actual knowledge of the existence of their claim until, as plaintiffs' say, they uncovered its existence in the course of discovery in this litigation. While it may be that plaintiffs' continued dealings with defendants over many years without objecting to the alleged underpayments could support an inference of waiver if plaintiffs actually had known of the underpayments, defendants have failed to establish such actual knowledge. At most, defendants have shown that plaintiffs should have known of the existence of their claim, but they have not demonstrated the absence of a genuine issue of fact as to whether plaintiffs intended to waive the claim.
Defendants next point out that claims for any alleged underpayments that accrued prior to July 2, 1987 fall outside the applicable six year limitations period,
calculated from the date that the third amended complaint was filed. Plaintiffs argue that the statute of limitations is tolled on the ground that defendants fraudulently concealed from them the existence of the claim by hiding subscription data.
Under New York law, unless the applicable statute of limitations contains a provision tolling the statute until discovery of the injury, the statute is not tolled by concealment, although a party may be estopped from raising the statute as a bar to the suit. See Simcuski v. Saeli, 44 N.Y.2d 442, 448-49, 406 N.Y.S.2d 259, 262, 377 N.E.2d 713 (1978) ("[A] defendant may be estopped to plead the Statute of Limitations where plaintiff was induced by fraud, misrepresentations or deception to refrain from filing a timely action."); General Stencils v. Chiappa, 18 N.Y.2d 125, 128 272 N.Y.S.2d 337, 340, 219 N.E.2d 169 (1966). The Court therefore will consider whether defendants are estopped to plead the defense of the statute of limitations.
Defendants correctly state that they were under no duty to apprise plaintiffs of the existence of their claim, if one existed, and that any failure to do so would not estop them to plead the statute of limitations. See Jordan v. Ford Motor Co., 73 A.D.2d 422, 424, 426 N.Y.S.2d 359, 361 (4th Dept. 1980). Plaintiffs, as the party invoking the exception to the statute of limitations, bear the burden of proving that defendants induced them to refrain from bringing suit by fraud, misrepresentation, or deceit. Park Associates v. Crescent Park Associates, 159 A.D.2d 460, 461, 552 N.Y.S.2d 314, 315 (2d Dept. 1990). Here, plaintiffs have alleged, at most, that defendants failed to share subscription information with them, although plaintiff Liebowitz's own declaration contradicts that assertion. (See Dabney Decl. P 4 & Ex. H) They have offered no evidence to show that they sought such information from defendants or that defendants actively concealed the information. Nor have they offered any evidence that would support an inference of diligence in trying to uncover the existence of their claim. To the extent that any evidence has been produced, plaintiff Liebowitz's declaration indicates that the circulation data in fact were made available to plaintiffs. In these circumstances, plaintiffs have failed to raise a genuine factual issue on their contention that defendants are estopped to rely upon the statute of limitations. See T & N PLC v. Fred S. James & Co. of New York Inc., 29 F.3d 57, 62 (2d Cir. 1994); Park Associates, 159 A.D.2d at 461, 552 N.Y.S.2d at 314.
Plaintiffs assert also that this count of the third amended complaint relates back to the first complaint, filed July 3, 1991, so that the statute, even if applicable, would bar only that portion of the claim that relates to underpayments alleged to have been made prior to July 3, 1985.
Rule 15(c) provides that a claim asserted in an amended complaint relates back to the original pleading if it "arose out of the conduct, transaction or occurrence set forth or attempted to he set forth in the original pleading." FED. R. CIV. P. 15(c)(2). Plaintiffs contend that their original complaint "put in issue the entire AERDCO-Pergamon relationship from its inception through 1991, which by definition includes the 1979 Agreement." (Pl. Mem. at 22) Both sides cite Green v. Wolf Corp., 50 F.R.D. 220, 224 (S.D.N.Y. 1970), which characterizes the question of relation back as a question whether "the original pleading gives fair notice of the general fact situation out of which the claim arises." Plaintiffs, however, read the words "general fact situation" quite broadly, apparently contending that the original complaint should be read to put in issue any claim that arises out of their relationship with defendants since 1967.
Green v. Wolf Co. held that the analysis in applying Rule 15(c) "should be focused upon the general wrong and conduct complained of in the original pleading and to what extent the claim sought to be added by way of amendment departs therefrom." Id. Following that approach, the Court observes that the original complaint alleged -- in some cases against defendants other than those now remaining in the case -- conversion of plaintiffs' trademarks, trademark infringement, breach of certain duties as co-venturers, and breach of the 1971 Agreement. Nowhere, however, did the original complaint allege even the existence of the 1979 Agreement which plaintiffs now contend has been breached. Nor did the original complaint refer to the alleged underpayments which form the basis for this new claim. In these circumstances, the wrong suffered and the conduct causing the wrong do not appear in the original complaint and the third amended complaint does not simply set forth more fully the same matter alleged in the original complaint. Nor is the subject of the controversy the same. See Koon v. Lakeshore Contractors, 128 F.R.D. 650, 653 (W.D.Mich. 1988). Count IV therefore does not relate back to the original complaint.
The statute of limitations bars that portion of the claim that accrued more than six years prior to the date of the third amended complaint.
Accordingly, defendants' motion is granted to the extent that so much of Count IV as seeks recovery of alleged underpayments prior to July 2, 1987 is dismissed.
What remains is defendants' motion for summary judgment dismissing on the merits that portion of Count IV pertaining to alleged underpayments made after July 2, 1987 and before January 1, 1989.
Defendants contend that they in fact overpaid plaintiffs during this period.
As defendants read the 1979 Agreement, it provides that Pergamon was to pay AERDCO a minimum payment of $ 120,000 per year, with an additional $ 10,000 for each Computer Series journal that exceeded the relevant subscription level. Thus, assuming arguendo that C&E and COMPUTERS & CHEMISTRY exceeded the applicable subscription level, they conclude that Pergamon owed AERDCO $ 140,000 per year. They contend that Pergamon paid AERDCO at the annual rates of $ 161,050 in 1987 and, apparently, $ 177,238 in 1988.
(Def. 3(g) PP 44-50 & Ex. 33)
Plaintiffs contend that the terms "Computer Journals" and "Computer Series," as used in the 1979 Agreement, did not include C&S and EFM. Much of the amounts paid to AERDCO in 1987 and 1988, plaintiffs contend, was paid on account of C&S and EFM. When payments for C&S and EFM are deducted from the total amounts paid to AERDCO by Pergamon in 1987 and 1988, plaintiffs assert that the remainder is less than the $ 140,000 allegedly due to AERDCO. Plaintiffs offer two letters from Pergamon to AERDCO, both dated in 1985, as evidence that the 1979 Agreement excluded C&S and EFM. The two letters indicate that Pergamon would pay AERDCO an "additional" $ 20,000 annually for each of C&S and EFM. (Pl. 3(g) Ex. 65) While these letters may not be determinative of the meaning of the terms "Computer Series" and "Computer Journals" as used in the 1979 Agreement, they clearly suggest that, at least as of 1986, $ 40,000 more was to be paid annually to AERDCO. Thus, plaintiffs contend, they were owed a minimum of$ 180,000 -- the sum of the $ 120,000 minimum payment provided for in the 1979 Agreement, plus a $ 10,000 bonus for C&E, plus a $ 10,000 bonus for COMPUTERS & CHEMISTRY, plus the additional $ 20,000 for EFM, plus the additional $ 20,000 for C&S. If so, both the $ 161,050 rate in 1987 and the $ 177,238 rate in 1988 at which Pergamon claims that it paid AERDCO would be less than what was due. Defendants' reply papers do not address the 1985 letters.
Defendants, however, claim that payments to AERDCO were reduced beginning in January 1988 by $ 16,666 per quarter, in order to repay a $ 200,000 interest-free loan that Pergamon extended to AERDCO. (Def. 3(g) Ex. 34) A letter sent to AERDCO by Pergamon after the commencement of this litigation purports to provide a schedule of payments to AERDCO from 1979 through 1988, including credits toward repayment of the loan.
This document separately accounts for amounts paid for EFM, while apparently including C&S in the Computer Series. Adding amounts credited toward reduction of the outstanding loan balance, this schedule indicates that Pergamon paid AERDCO a total of $ 161,050 for 1987 and $ 171,050 for 1988.
The 1992 letter allocates $ 21,050 of the 1987 payment and $ 31,050 of the 1988 payment to EFM. Thus, if EFM only were excluded from the Computer Series, and C&S were included, the amounts paid for the Computer Series, including credit for loan repayments, would total $ 140,000 for 1987 and $ 140,000 for 1988. This amount, however, still would not account for the additional $ 20,000 which Pergamon apparently agreed in 1985 to pay annually for C&S. Of course if C&S were excluded as well the amounts paid would be even more deficient
Defendants argue that the ambiguous term "Computer Series" in the 1979 Agreement included both C&S and EFM. Pergamon's 1992 letter suggests, however, that it regarded EFM as separate. The evidence that defendants rely upon to argue that both C&S and EFM were part of the Computer Series as that term was used in the 1979 Agreement is inconclusive. They look to the 1989 Agreement that replaced the 1979 Agreement. There, paragraphs one and two discuss EFM and C&S, while paragraph three discusses "the remaining current journals in the Computer Series." Defendants argue that the word "remaining" in paragraph three distinguishes the journals discussed there from those discussed in paragraphs one and two. It seems equally likely, however, that the words "remaining current journals" (emphasis added) distinguishes the journals discussed in paragraph three from those Computer Series journals that had been discontinued, rather than from those discussed in paragraphs one and two.
Moreover, the 1971 Agreement which created the Computer Series set forth a list of a number of journals that might be included in the series. (Pl. 3(g) Ex. 11E P 1) The list did not include C&S or EFM. (Id.) In fact, the same document expressly excluded C&S from the agreement creating the series. (Id. at P 6) Defendants note that plaintiff Liebowitz seems to have included C&S in the Computer Series in a 1975 letter. (Def. 3(g) Ex. 27) Thus there are documents that suggest that the 1979 Agreement did include C&S, and there are documents that suggest that it did not. There does not seem to be evidence that EFM was included in the 1979 Agreement. Thus, the most that defendants have established is that the term "Computer Series" as used in the 1979 Agreement is ambiguous.
There is clearly a genuine dispute as to whether the 1979 Agreement applied to C&S and EFM. In these circumstances, defendants have failed to carry their burden on a motion for summary judgment. Without proof that both EFM and C&S are included in the 1979 Agreement it appears that any of the various amounts that Pergamon is alleged to have paid to AERDCO in 1987 and 1988 would have been insufficient. The motion for summary judgment therefore is denied as to that portion of Count IV that is not time-barred.
The Claim Under Paragraph Three of the 1989 Agreement (Count V)
Plaintiffs claim that paragraph three of the 1989 Agreement obligated Pergamon in 1992 to commence paying AERDCO $ 10,000 per year for each journal in the Computer Series that, as of the date of the 1989 Agreement, had not been receiving a $ 10,000 annual subscription "bonus" payment of the kind at issue in the immediately preceding discussion. The relevant portion of the 1989 Agreement provides:
"For the remaining current journals in the Computer Series, AERDCO will receive from Pergamon Press One Hundred and Twenty Thousand Dollars ($ 120,000) paid per annum in four (4) equal installments commencing 31 March 1989. AERDCO will forego the Ten Thousand Dollars ($ 10,000) start-up fee at the initiation of a new journal in the Computer Series; however, AERDCO will receive from Pergamon Press an additional Ten Thousand Dollars ($ 10,000) per annum fee, payable in quarterly payments commencing 31 March 1992, for each remaining journal in which AERDCO is not as of the date of this letter receiving a Ten Thousand Dollar ($ 10,000) annual fee for said journal." (Pl. 3(g) Ex. 25 P 3)
Thus, plaintiffs claim that they are owed $ 10,000 per year since 1992 for each of the five journals for which they claim that they were not receiving the $ 10,000 bonus at the time that the 1989 Agreement was negotiated.
Defendants regard the $ 120,000 fee provided for in the first sentence of paragraph three as a fee of $ 10,000 for each of the twelve journals, excluding C&S and EFM, which they believe constituted the Computer Series. Thus, they argue that AERDCO was receiving for each journal in the series "a Ten Thousand Dollar ($ 10,000) annual fee for said journal." Therefore, according to defendants, no obligation arose in 1992 to make additional $ 10,000 payments because here were no Computer Series journals in publication in 1992 that, as of the date of the 1989 Agreement, were not receiving a $ 10,000 fee.
Nothing in the language of paragraph three suggests, however, that the $ 120,000 fee was attributable in separate $ 10,000 increments to each journal then included in the Computer Series. Nor have defendants offered any evidence that this was the intent of the parties in negotiating this provision. Plaintiffs argue that the additional payment provision would have been meaningless if they were already receiving $ 10,000 for each journal in publication at the time of the 1989 Agreement. Defendants do not dispute that a contract should be interpreted to give meaning to all of its provision. See, e.g., Morgan, Olmstead, Kennedy & Gardner, Inc. v. Federal Ins. Co., 637 F. Supp. 973, 977 (S.D.N.Y.), aff'd, 833 F.2d 1003 (2d Cir. 1986). Instead, they contend that there was a journal which they identify as COMPUTING SYSTEMS IN ENGINEERING, in the series at the time of the 1989 Agreement for which AERDCO was not receiving a fee of any kind. As evidence of this they direct the Court to a letter dated May 1, 1989 from Robert Miranda of Pergamon to Professor Liebowitz. The letter, in its entirety, states:
"Please accept this letter as confirmation that the Journal of COMPUTING SYSTEMS IN ENGINEERING is part of the computer series of journals established by AERDCO.