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KAPLAN v. VINCENT

September 10, 1996

DAVID A. KAPLAN, Plaintiff, against FRANCES T. VINCENT, JR., Defendant.


The opinion of the court was delivered by: PARKER

 The plaintiff, David Kaplan, a writer, has brought an action for a declaratory judgment seeking co-ownership rights in an unpublished manuscript of the memoirs of defendant, former major league baseball commissioner, Frances T. Vincent, Jr. In addition, Kaplan also seeks damages from Vincent arising out of Vincent's alleged breach of contract, fraud and unjust enrichment. Vincent moves to dismiss the complaint pursuant to Rule 12(b)(6), Fed.R.Civ.P. In response, Kaplan cross-moves pursuant to Rule 56 Fed.R.Civ.P. for partial summary judgment, on his declaratory judgment claim.

 FACTS

 The Agreements

 This action stems from an arrangement between Kaplan, the legal affairs editor and senior writer for Newsweek magazine and Vincent to publish Vincent's memoirs. Underlying the principal factual contentions of this lawsuit are two alleged agreements concerning the publication of the book. The first, a Publishing Agreement, dated April 8, 1994, was signed by Kaplan and Vincent and Little, Brown and Company ("Little, Brown") in July 1994. The Publishing Agreement provided that Vincent and Kaplan, jointly referred to as "author", would submit the manuscript of Vincent's memoirs by January 2, 1995. The two were to receive an advance of $ 300,000, half of which, $ 150,000, was payable upon signing of the publishing agreement--before the manuscript was fully submitted. The other half was payable upon the submission of an acceptable manuscript.

 The Project

 According to Kaplan, he began working on the book long before he and Vincent signed the Publishing Agreement. The two first discussed the idea of a book about baseball in September 1992, and over the next few months, they casually discussed chapter topics and ideas for titles. In February 1993, recovering from back surgery, Vincent moved to England and put the project on hold. When Vincent returned that summer, he told Kaplan that he would go forward with project, and the two then signed with the William Morris Agency to represent them in finding a publisher. According to Kaplan, from June 1993 through February 1994, he spent "hundreds of hours" drafting a 42 page proposal -- at the request of William Morris and Vincent. Apparently, however, the contents of the proposal, although confidential, were published in the sports section of The New York Times. Eventually, Vincent began to experience misgivings about the project and at one point told Kaplan he no longer wanted to go through with the book. However, after a weekend, he changed his mind and accepted Little, Brown's offer.

 It was also during this time period that Kaplan and Vincent began working on the manuscript itself. Kaplan claims that he conducted over 45 hours of taped interviews of Vincent, reviewed Vincent's archived files, researched newspaper and magazine articles, interviewed Vincent's former employees and drafted the manuscript, while Vincent sat for the interviews and did some of the editing. By November 23, 1994, Kaplan had completed 90 percent of the work, including final versions of three quarters of the chapters. On that day, November 23, 1994, Vincent called Kaplan to say that he no longer wanted to work on the book. He returned the entire $ 150,000 to Little, Brown, but permitted Kaplan to keep his $ 60,000 share of the advance. The collaboration agreement was never signed.

 DISCUSSION

 I. The Declaratory Judgment Claim

 In his fourth claim, Kaplan seeks a declaration, pursuant to 28 U.S.C. § 2201 that he has the right to publish and use the materials at issue without Vincent's permission. Vincent moves to dismiss this claim pursuant to Rule 12(b)(6) on the theories that Kaplan is precluded from publishing the manuscript since no valid enforceable contract exists, or, alternatively, that Kaplan may not publish the materials based on promissory estoppel. Kaplan cross moves for summary judgment on this claim, arguing that, as a co-author of the manuscript, he has the right to publish based on Sections 102 and 201 of the Copyright Act, 17 U.S.C. §§ 102; 201 (1977). We consider each of these contentions in turn.

 A. Vincent's Motion

 1. Legal Standard

 A complaint must be dismissed under Fed.R.Civ.P. 12(b)(6) only if "it appears beyond a reasonable doubt that the plaintiff can prove no set of facts in support of his claim that would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957); see also Easton v. Sundram, 947 F.2d 1011, 1014 (2d Cir. 1991), cert. denied, 504 U.S. 911, 118 L. Ed. 2d 548, 112 S. Ct. 1943 (1992). In addition, in deciding a motion to dismiss, the court must read the facts alleged in the complaint "generously" drawing all reasonable inferences in favor of the party opposing the motion. Cosmas v. Hassett, 886 F.2d 8, 11 (2d Cir. 1989). The trial court's role is to appraise the legal merits of the complaint and not to weigh the evidence which might be introduced at trial. See Ricciuti v. New York City Transit Authority, 941 F.2d 119, 124 (2d Cir. 1991) (plaintiff is not compelled to prove her case at the pleading stage). The issue "is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." Scheuer v. Rhodes, 416 U.S. 232, 236, 40 L. Ed. 2d 90, 94 S. Ct. 1683 (1974). Finally, the trial court should grant a Rule 12(b)(6) motion "only if is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Hishon v. King & Spalding, 467 U.S. 69, 73, 81 L. Ed. 2d 59, 104 S. Ct. 2229 (1984) (citing Conley, 355 U.S. at 45-46).

 2. The Collaboration Agreement

 Vincent argues that Kaplan is precluded from publishing any of the materials because the two agreed not to in 1992. In support of this contention, Vincent claims that he told Kaplan that, since he was the main source for the book, he retained the final say on what use could be made from any of the information he divulged to Kaplan. Kaplan, according to Vincent, agreed.

 Essentially, this meant that Vincent could terminate the project at any time for any reason without concern that Kaplan would exploit information that he shared with him. Vincent contends that Kaplan's promises are reflected repeatedly in the drafts of the collaboration agreement that the two exchanged between May 13, 1994 and November 23, 1994. Vincent notes, that pursuant to paragraph 13(a) of the July 6, 1994, August 4, 1994, August 23, 1994, August 26 1994, October 19, 1994 and November 23, 1994 drafts of the collaboration agreement, he was entitled to terminate the project at any time. Paragraph 13(a) provides:

 
Vincent may terminate this agreement or discontinue working on the book at any time, for any reason, without the consent of Mr. Kaplan, provided that in such event Vincent shall be responsible for returning to the Publisher the monies theretofore paid by the publisher to Kaplan, as well as those paid to Vincent in the event these must be repaid. If such a termination occurs after Kaplan has prepared the entire text of the manuscript, Vincent shall also pay to Kaplan all additional monies that would become due to Kaplan from the Publisher as advances under paragraph 8 of the Author-Publisher Agreement upon delivery of a final, acceptable manuscript for the Work, provided the Publisher certifies that the manuscript is acceptable to it. *fn1"

 Vincent also argues that pursuant to P14(a), Kaplan is prevented from publishing the materials in the event of a termination. Paragraph 14(a) provides:

 
In the event there is any termination, any written material or manuscripts shall revert to and revest in such contributing party with the result that neither party shall be permitted to use the materials contributed by the other without such others written permission. *fn2"

 Kaplan's position on these draft agreements is that no binding promises had been made and that he did not intend to be bound in the absence of a formal, executed written agreement.

 Moreover, Vincent, some time after he received Kaplan's first draft, added a confidentiality clause which specifically prohibits Kaplan from disclosing information provided by Vincent without Vincent's consent. That clause, found in paragraph 14(b) of the July 18 1994 draft, provides:

 
All material whether oral or written contributed by either party for use in the manuscript, including materials and information provided prior to the execution hereof, shall be considered confidential, and neither party shall use any of such material or the facts or the information contained therein that have been provided with the parties' collaboration except as permitted hereunder or under an agreement with a third party to which both parties have previously agreed in writing, without the express prior written approval of the other party. In no event shall any confidential material otherwise be used by the party that has not furnished the same in the event there is any termination of the agreement. Specifically, Kaplan agrees not to participate in interviews, write any articles or books, or take any actions in or by which he discloses in any manner any of the unpublished information furnished to him hereunder, or any portion thereof, in connection with the work which is not publicly available or independently discovered by Kaplan, including any non-public aspect of the relationship of the parties involved in the preparation or the writing of the Work and/or its adaptation for use in any media whatsoever. . .

 The controversy here is whether this exchange of drafts constitutes an enforceable contract since, under New York law, a contract is unenforceable if the parties did not intend to be bound except by a formal written agreement. Totalplan Corporation of America v. Colborne, 14 F.3d 824, 831 (2d Cir. 1994); Jim Bouton Corp. v. WM Wrigley Jr, 902 F.2d 1074, 1080 (2d Cir. 1990), cert. denied, 498 U.S. 854, 112 L. Ed. 2d 116, 111 S. Ct. 150 (1990); Winston v. Mediafare Entertainment, 777 F.2d 78, 80 (2d Cir. 1985). This rule holds true even if the parties have orally agreed upon all terms of the proposed contract." R.G. Group, Inc. v. Horn & Hardart, 751 F.2d 69, 74. On the other hand, where the parties do not intend that an agreement must be reduced to writing to be binding, and there are no material terms of the contract left open for negotiation, an informal oral agreement may be binding even if the parties contemplate memorializing their agreement in writing. Consarc Corp. v. Marine Midland Bank, 996 F.2d 568 (2d Cir. 1993); Winston, 777 F.2d at 80; R.G. Group, 751 F.2d at 74. Thus, what matters are the parties' expressed intentions, the words and deeds which constitute objective signs in a given set of circumstances. R.G. Group, 751 F.2d at 74. When a party "gives forthright reasonable signals that it means to be bound only by a written agreement, that intent should be honored." See R.G. Group, 751 F.2d at 74. If, however, the parties' expressions and conduct would lead a reasonable person to conclude that they intended to reach a binding agreement, the agreement is enforceable. See Reprosystem, B.V. v. SCM Corp., 522 F. Supp. 1257, 1275 (S.D.N.Y. 1981), aff'd in part and rev'd in part, 727 F.2d 257 (2d Cir. 1984).

 We generally consider four factors in determining whether parties intend to be bound absent a writing. These are: (1) whether the parties expressed to one another that they would be bound only by a written agreement; (2) whether there has been partial performance of the contract and that partial performance has been accepted; (3) whether all of the terms have been agreed upon and there is nothing left to negotiate; and (4) whether the agreement is the sort that is usually written." Shearson Lehman CMO, Inc. v. TCF Banking & Sav., F.A., 710 F. Supp. 67, 70 (S.D.N.Y. 1989). *fn3" These factors may be shown by "oral testimony or by correspondence or other preliminary or partially complete writings." Winston v. Mediafare Entertainment Corp., 777 F.2d at 80 (quoting Restatement (Second) of Contracts § 27 comment c (1981)). No single factor is decisive. Consarc. Corp., 996 F.2d at 576. Addressing each of these factors in turn, the Court concludes that ...


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