throughout 1998 without any evidence of objection by Unitel.
Without proof that Unitel had a different interpretation of the
agreement than King World, MBL's conclusory allegations cannot
control the meaning of the contract. It is axiomatic that "where
the parties [to a contract] have attached the same meaning to a
promise or agreement or a term thereof, it is interpreted in
accordance with that meaning." Restatement (Second) of Contracts,
In addition, MEL cannot claim the status of intended
third-party beneficiary under the "other alterations" provision. MBL
argues that "MEL was the intended and only beneficiary of the
extra work that was ordered by King World." Pl. Mem. at 9.
However, the first test for third-party beneficiary status is not
met because, as discussed above, there is no evidence that King
World, as promisor, has breached its obligation to Unitel to
compensate it for "other alterations." See, e.g., Piccoli, 19
F. Supp.2d at 162 (dismissing an alleged third-party beneficiary
claim that could have been brought by a party to the contract but
was not); ESI, Inc. v. Coastal Power Prod. Co., 995 F. Supp. 419,
432 (S.D.N.Y. 1998) (same). Nor does the language of the contract
otherwise evidence an intent to permit enforcement by third
parties because it requires King World to pay the costs of all
such "other alterations" to Unitel and only authorizes recovery
by Unitel itself. Id. at 164 (finding that a third party cannot
establish intended beneficiary status where it is "apparent from
the face of the contract that the parties intended to limit to
themselves the ability to enforce the agreement"). Cf. Artwear,
Inc. v. Hughes, 202 A.D.2d 76, 84, 615 N.Y.S.2d 689, 694 (1st
Dep't 1994) (noting that "it is well settled that the
subcontractor or supplier of a general contractor on a
construction project is not invested with third-party beneficiary
status" and are, instead, "incidental beneficiaries") (citations
omitted). As such, the provision cannot confer on MBL the status
of an intended third-party beneficiary. Moreover, the fact that
King World paid Unitel the additional $10,000 and not MBL is
additional proof that MBL must look to Unitel for its payment.
Second, the indemnity provision of the Production Services
Agreement indemnifies Unitel against "all claims, actions, or
damages" arising out of "acts or omissions" by King World's
personnel or of any personnel provided by Unitel, to the extent
such personnel are acting under [King World's] direction and
control." PSA § 9. Plaintiff maintains that its employees
constitute such personnel provided by Unitel under the control of
King World, and that, therefore, the indemnity provision
authorizes it to proceed directly against King World. Pl. Mem. at
9. Such a reading of the indemnity provision is strained at best.
The intent of the indemnity agreement is clearly to protect
Unitel, not third-party claimants. Again, MBL cannot meet its
burden of establishing its intended third-party beneficiary
status because the indemnity clause was clearly drafted to allow
recovery by Unitel, not only MBL. Piccoli, 19 F. Supp.2d at 162.
In fact, § 9 does not evidence any intent to permit enforcement
by third parties. See id. at 164. It would be a wholly illogical
result were this Court to construe the intent of a general
indemnity provision to bind one party to a contract action to all
the debts of the other. As such, plaintiff's second and third
claims must be dismissed as well.
IV. Rule 11 Sanctions
Finally, the decision of whether to award sanctions pursuant to
Rule 11 is subject to the Court's discretion. See Simon DeBartolo
Group, L.P. v. Richard E. Jacobs Group, Inc., 186 F.3d 157, 166
(2d Cir. 1999). Although we have found an award of summary
judgment to be appropriate in this case, we also find that MEL's
complaint was not frivolous and that it was not clear under
existing legal precedent that it had no chance of success or that
it was filed solely for the purpose of harassment. See Kalint v.
Eichler, No. 99 Civ. 3306, 2000 WL 358379, *15 (S.D.N.Y. Mar. 31,
2000). Accordingly, the motion for Rule 11 sanctions is denied.
For the foregoing reasons, defendants' motion for summary
judgment is granted. The Clerk of the Court is directed to enter
judgment in favor of the defendant and close the above-captioned
IT IS SO ORDERED.