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March 17, 2000


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.


I. Waiver

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 ...

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