the pop singer, and MBO Tours, a corporation used by Bolton to arrange concert tours. In essence, MCP claims that defendants "unjustifiably repudiated" a 1996 concert agreement when Bolton abruptly cancelled an eight-concert tour of Australian cities just two weeks before the tour was scheduled to begin. (Am. Compl. P 1).
Defendants move to dismiss the complaint pursuant to Rule 12(b)(6). They contend that plaintiff has failed to state a claim for the following reasons: (1) MCP's telefax of April 22, 1996 constitutes a counteroffer extinguishing its prior offer; (2) defendants expressly made written acceptance and payment of an advance the preconditions for an enforceable contract; and (3) the complaint fails to sufficiently allege the existence of an oral contract.
For the reasons set forth below, defendants' motion is denied.
Plaintiff's Amended Complaint alleges that in early March of 1996 representatives of the parties
"orally agreed [to] the material terms" of a concert agreement. (Am. Compl. P 2). Under the terms of this alleged contract, Bolton promised to perform eight concerts in various Australian cities between May 14-28, 1996 (the "Australian Tour"). (See id. PP 1, 25). In return, Bolton would be paid "the greater of $ 1,200,000 or 85% of the net door receipts of ticket sales." (Id. PP 3, 25). With the apparent consent of defendants' booking agent and in accordance with the "prevailing custom and usage in the concert promotion and touring business," MCP immediately commenced ticket sales for six of the eight tour dates and engaged in extensive promotional activities. (Id. PP 13, 27-30).
The parties continued to exchange telefaxes and telephone calls regarding various issues relating to the tour. In separate telephone conversations in March of 1996, Podell of ICM allegedly requested that MCP delay ticket sales for one week due to problems with the Korean tour, and then assured MCP that ticket sales could begin on March 29, 1996.
On or about April 16, 1997 ICM sent MCP a short form of the alleged concert agreement (the "Short Form"). Approximately one week later, MCP received from ICM a contract rider (the "Rider").
Plaintiff alleges that the Short Form and Rider "fairly and accurately reflected the material terms" of the previous oral agreement, but also contained conflicting new terms, such as those concerning to which institution Bolton's advance should be paid. (Id. PP 18-20).
During the week of April 22, 1996, plaintiff learned that the Korean tour had been cancelled. Shortly thereafter, Podell called Coppel to suggest that MCP cancel the Australian Tour. Coppel refused, citing the expenses already incurred and the likelihood of a last-minute surge in ticket sales. (Id. P 34).
On or about April 26, 1996 Podell cancelled the Australian Tour on behalf of Bolton and MBO, citing poor ticket sales. Plaintiff alleges that defendants backed out of the agreement "either because Bolton did not wish to endure the embarrassment of playing to less than capacity crowds if ticket sales did not improve at the Australian venues, or because the cancellation of the Korean tour dates had decreased the potential profitability of his Southeast Asian tour plans, or both." (Id. P 37).
A. Applicable Standard
In reviewing a motion to dismiss, this Court must accept the factual allegations set forth in the complaint as true, and draw all reasonable inferences in favor of the plaintiff. See Bernheim v. Litt, 79 F.3d 318, 321 (2d Cir. 1996). A complaint may not be dismissed under Rule 12(b)(6) unless it "appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Id. (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957)). In other words, the issue before the Court "is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." Villager Pond, Inc. v. Town of Darien, 56 F.3d 375, 378 (2d Cir. 1995), cert. denied, 136 L. Ed. 2d 14, U.S. , 117 S. Ct. 50 (1996).
B. Defendants' Motion to Dismiss
Accepting as true the factual allegations set forth in the complaint and drawing all reasonable inferences in plaintiff's favor, I hold that plaintiff has stated a claim upon which relief may be granted.
1. The April 22, 1996 Telefax
Defendants insist that no agreement, oral or written, was ever reached, and that continued negotiations reflect the unresolved state of affairs. Defendants argue that Coppel's April 22, 1996 telefax to Nash (Am. Compl., Ex. C) represents a "counteroffer" that "extinguished" defendants' initial "offer." (Defs. Mem. at 7-9).
In the fax, Coppel states:
I've received three different sets of instructions for the transfer of the deposit, nominating variously: Chase Manhattan (fax dated 16 April), Barclays' Bank PLS, London (in all versions of the contract received to date), Chemical Bank, New York (fax dated 19 April. Even if I assume that the most recent instruction is the routing information actually required I cannot comply with your instruction to transfer funds directly to the artist's account -- these funds should be held by I.C.M. pending the performance of the contract, which is the way I have always operated.