The opinion of the court was delivered by: Cedarbaum, District Judge.
This is a dispute over a sales representative agreement that
plaintiffs and defendants each assert was breached by the other
side. Plaintiffs seek various forms of equitable relief against
defendants for claims based in contract as well as copyright and
trademark. Defendants assert counterclaims against plaintiffs for
damages and equitable relief based on the same contract relied on
by plaintiffs. Defendants also assert a counterclaim against a
third party, Durkin Hayes Publishing Ltd. ("Durkin Hayes"), for
tortious interference with this contract.
Plaintiffs and Durkin Hayes argue that the principal of a
defunct corporation cannot enforce a contract made in the name of
the corporation. They have filed motions for summary judgment
dismissing defendants' counterclaims on this ground. Plaintiffs
have agreed to withdraw of all of their claims against
defendants. Accordingly, the counterclaims are the only remaining
claims in the case. For the reasons discussed below, the motions
for summary judgment are granted. Defendants' counterclaims and
the complaint are dismissed in their entirety.
The facts relevant to this motion are not in dispute.
On November 22, 1996, Louis Lofredo Associates, Inc. ("LL
Associates") entered into a "Sales Representative Agreement"
("Agreement") with Florio Entertainment, Inc. ("FEI") and
Animazing, Inc. The Agreement was drafted and signed by Louis
Lofredo on behalf of LL Associates as the company's president.
The Agreement designated LL Associates as the "Exclusive
International Sales Representative" of FEI and Animazing and
provided that LL Associates would receive commissions for
licensing FEI's and Animazing's products worldwide.
Less than a year after the Agreement was signed, plaintiffs
FEI, Animazing, Florio Management, Inc. and Frank Florio filed
this lawsuit against LL Associates and Lofredo for breach of
contract, fraud in the inducement, copyright infringement and
trademark infringement. Plaintiffs sought declaratory judgment
and other equitable relief, but not damages. Defendants asserted
counterclaims against plaintiffs for breach of the Agreement and
torts bottomed on the existence of the Agreement. Defendants also
asserted a counterclaim against third party Durkin Hayes for
tortious interference with the Agreement. Defendants sought
damages on all of their counterclaims.
At his deposition, Lofredo revealed that LL Associates was
defunct when the Agreement was signed. Although LL Associates was
incorporated in New York in 1967, it was dissolved by
proclamation in 1977 and remained dissolved through the time of
Lofredo's deposition. Lofredo also testified that he knew of
these facts at the time he signed the Agreement in 1996. Although
Lofredo used letterhead indicating that LL Associates was
incorporated, he made no effort during the 1990s to reincorporate
his business and filed no corporate tax returns.
Lofredo did not disclose any of this information to plaintiffs
prior to the signing of the Agreement, or at any other time
before his deposition. Nor did Lofredo disclose this information
to Durkin Hayes prior to this litigation.
Durkin Hayes moves for summary judgment on defendants' claim
against it for tortious interference with contract on the ground
that Lofredo and LL Associates cannot prove an essential element
of their claim, the existence of a contract. Plaintiffs move for
summary judgment on defendants' counterclaims on the ground that
no contract existed that could have been breached. Defendants
argue that the Agreement is valid because LL Associates was a de
facto corporation at the time the Agreement was signed, because
LL Associates is a corporation by estoppel, and because Lofredo
himself should be treated as a party to the Agreement. Defendants
also argue that plaintiffs and Durkin Hayes have waived this
defense, which they describe as lack of capacity.
Defendants argue as an initial matter that plaintiffs' and
Durkin Hayes' contention that LL Associates did not exist at the
time the Agreement was signed is an affirmative defense that has
been waived because it was not pleaded in the answers to
Lofredo's counterclaims. Fed.R.Civ.P. 8(c) requires that "[i]n
pleading to a preceding pleading, a party shall set forth
affirmatively . . . any . . . matter constituting an avoidance or
affirmative defense." "[A] party's failure to plead an
affirmative defense bars its invocation at later stages of the
litigation." Doubleday & Co. v. Curtis, 763 F.2d 495, 503 (2d
Cir. 1985). See also Design Options, Inc. v. BellePointe, Inc.,
940 F. Supp. 86, 92 (S.D.N.Y. 1996).
Defendants contend that the present motions invoke the defense
of lack of capacity to sue and that this defense has been waived
because it was not raised in the answers to the counterclaims.
Fed. R.Civ.P. 9(a) requires that capacity to sue or be sued be
denied with specificity. The defense can be waived if not raised
in the initial responsive pleading to a claim. See Pressman v.
Estate of Steinvorth, 860 F. Supp. 171, 176 (S.D.N.Y. 1994)
("Under [Rule 9(a)] if ...