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March 28, 2003


The opinion of the court was delivered by: Laura Taylor Swain, United States District Judge


Defendant seeks summary judgment dismissing this action, and Plaintiff cross-moves for summary judgment on its claims of breach of contract, breach of fiduciary duty, and unjust enrichment. The Court has considered thoroughly all submissions and argument related to these motions. For the following reasons, Defendant's and Plaintiff's respective motions are granted in part and denied in part.


The Court has subject matter jurisdiction of this matter pursuant to 28 U.S.C. § 1332.

The facts recited below are undisputed to the extent not characterized otherwise.

This action, brought by Development Specialists, Inc. ("Plaintiff" or "DSI"), as assignee for the benefit of creditors of Medical SelfCare, Inc. ("SelfCare"), arises from a dispute relating to an equity investment by Defendant National Broadcasting Co., Inc. ("NBC") in SelfCare, which was at the time a catalogue and internet retailer of personal medical care items. Two written agreements are relevant to the instant dispute: a letter agreement executed by the parties on February 2, 2000 (the "February Agreement"); and a letter agreement executed by the parties on September 21, 2000 (the "September Agreement").

The February Agreement provided for the sale by SelfCare of stock and stock-purchase warrants to NBC in exchange for cash and the right to use certain television advertising spots with a "Guaranteed Spot Value" of $9,000,000. See February Agreement, Ex. D to Def.'s Not. of Mot., introductory language; Decl. of Larry Bodner, annexed to Plaintiff's Notice of Cross-Motion ("Bodner Decl."), ¶ 7; Decl. of William C. Herman, annexed to Pl.'s Not. of Cross-Mot. ("Herman Decl."), ¶ 2. The February Agreement included provisions relating to the use of the advertising time on a schedule to be agreed between NBC and SelfCare, the submission of advertisements for broadcast and the effect in certain circumstances of failure to submit or to broadcast advertising, and provisions for waiver, modification, and assignment of the agreement. Paragraph 1(c) of the February Agreement provided in relevant part that:

On or before two weeks prior to the Advertiser's first scheduled Spot, Advertiser shall deliver to NBC commercial material for the first of Advertiser's Spots. Advertiser acknowledges that if it fails to deliver such commercial material by such date or such commercial material is rejected . . . then NBC TV shall be deemed to have telecast Advertiser's Spots for purposes hereof even if Advertiser's Spot is not actually shown when the Program is telecast.
(February Agreement ¶ 1(c).)

"Deemed telecast" language also appears in paragraph 5 of the February Agreement, which provided for the payment of certain amounts to SelfCare in the event of termination of the agreement under certain circumstances. In the event either party terminated the agreement after NBC had received its shares of SelfCare stock, NBC was to pay SelfCare the difference, in cash, between the Guaranteed Spot Value and the value of spots already telecast or "deemed telecast."

Paragraph 9 of the February Agreement, captioned "Liability for Failure to Broadcast Spots," provided, in relevant part, that "[i]n the event that NBC does not telecast Spots equal to the Guaranteed Spot Value during calendar year 2000 . . . then as liquidated damages . . . NBC shall pay [SelfCare] in cash an amount equal to the difference, if positive, between the sum of the Guaranteed Spot Value . . . less (sic) value of the Spots actually telecast." Id. ¶ 9.

"Deemed telecast" spots are not referred to in paragraph 9.

Paragraph 7 of the February Agreement provided that "no waiver or modification of any provision of this Agreement shall be effective unless in writing and signed by both parties," and further provided that The terms of this Letter Agreement shall apply to parties hereto and any of their successors or assigns; provided, however, that this Letter Agreement may not be transferred or assigned by [SelfCare], including, without limitation, the right to receive Spots to be telecast by NBC TV, without the prior written consent of NBC.
Id. ¶ 7.

In connection and contemporaneously with the February Agreement, the parties executed a stock purchase agreement that, inter alia, gave NBC the right to appoint one member of SelfCare's Board of Directors. An NBC vice president, Claudia Taylor, was appointed to SelfCare's Board in February 2000. NBC's shares provided it with a minority, non-controlling equity interest in SelfCare.

By June 2000, SelfCare was experiencing difficulties in raising operating funds and, in that month, SelfCare began discussions with NBC about the possibility of SelfCare receiving cash for its advertising inventory. Plaintiff contends that Taylor represented to SelfCare's Board that NBC would be willing to buy back certain of the time. At no time thereafter, however, did SelfCare and NBC enter into an agreement to convert any portion of ...

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