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CREATIVE TRANSACTION CORPORATION v. MONROE ALLEN PUBLISHERS

January 12, 2004.

CREATIVE TRANSACTION CORPORATION AND AMY LEE, Plaintiffs, -against- MONROE ALLEN PUBLISHERS, INC. AND PHILIP M. RIDEOUT, Defendants


The opinion of the court was delivered by: RICHARD CASEY, District Judge

MEMORANDUM OPINION & ORDER

Creative Transaction Corp. ("CTC") and its President, Amy Lee, ("Plaintiffs") sued Monroe Allen Publishers, Inc. ("MAP") and its President, Philip M. Rideout, ("Defendants") on various contract and tort causes of action arising from the parties' effort to publish and sell a dictionary. Rideout authored the dictionary; Lee provided capital and assisted Rideout in negotiations with a publishing company, Heinle & Heinle Publishers ("Heinle"). Successful in these negotiations, MAP and CTC entered into an agreement with Heinle, by which Heinle would publish and market the dictionary and would produce a derivative work. During subsequent negotiations with Heinle concerning Heinle's transfer of its rights in the dictionaries, relations between Plaintiffs and Defendants deteriorated; Plaintiffs brought suit on an eight-count complaint as a result.

Now before the Court are Defendants' motion for summary judgment and Plaintiffs' motion for partial summary judgment. For the reasons that follow Plaintiffs' motion is DENIED and Defendants' motion is GRANTED IN PART AND DENIED IN PART Page 2

 I. BACKGROUND

  In 1993, Lee and Rideout, on behalf of their companies, established a relationship to produce a dictionary entitled A Dictionary of Modern American English. According to a letter written in November 1993, that Defendants contend was a contract, Lee invested $27,000 to aid Rideout in completing his dictionary of modern American English. In exchange for the capital, Lee was to receive all of the proceeds from the Asian sales of the dictionary and any derivatives of the primary work. All other royalties were to go to Rideout. Plaintiffs dispute whether this letter represented a binding contract between the parties.

  Plaintiffs allege that Lee negotiated with Heinle on Rideout's behalf. In 1994, MAP and Heinle entered into an agreement to publish the dictionary under the title The Newbury House Dictionary of American English (the "NHD"). This 1994 agreement assigned all Asian royalties to CTC. In 1997, the parties reached a second agreement (the "1997 agreement") with Heinle to produce a derivative work called The Basic Newbury House Dictionary of American English (the "Basic NHD"). The 1997 agreement included both MAP and CTC as the dictionary's "Author." According to that contract, Heinle agreed "to pay the Author a royalty based on the net cash received by the publisher from the sale of the work." (Basic NHD Agreement, Defendants' Notice of Motion, Exh. C, at 1, 5, 6.)

  In 1998, MAP and CTC entered into another agreement (the "1998 agreement") that gave CTC: (1) the nonexclusive right to create derivations on the dictionaries for sale in Asia; (2) exclusive rights to exploit the dictionaries and derivations thereon in Asia; and (3) exclusive rights to exploit Asian-language derivations of the dictionaries throughout the world.

  Problems began after the 1998 agreement was executed. Lee and Heinle were negotiating to Page 3 transfer any rights Heinle had in the dictionaries in Asia to Plaintiffs. Rideout, unhappy about being left out of these negotiations, complained to both Heinle and Lee. Plaintiffs maintain that Defendants interfered with the negotiations by insisting that Heinle transfer to Defendants the rights to the dictionaries in the Asian market that Plaintiffs were attempting to procure from Heinle. As a result, Plaintiffs say Heinle withdrew from negotiations with them. Additionally, Plaintiffs contend that Defendants repudiated the 1998 agreement by these communications with Heinle and also by seeking to negotiate with Lee a license to exploit the dictionaries in Asia.

  Plaintiffs contend that the 1997 agreement — in which CTC was included in the definition of "Author," to whom Heinle was to pay royalties for all sales of the Basic NHD — entitles Plaintiffs to half of all royalties from the Basic NHD. Plaintiffs further allege that Defendants retained all such royalties and therefore breached the 1997 agreement. Counts one through five of the complaint relate to the 1997 agreement. The sixth cause of action alleges breach of the 1998 agreement between Heinle and the parties relating to Plaintiffs' exploitation of the dictionaries. The seventh cause of action claims that Defendants tortiously interfered with Plaintiffs' negotiations with Asian publishers regarding the dictionaries in Asia. Finally, the eighth cause of action seeks injunctive relief: (1) barring Defendants from interference with Plaintiffs' negotiations with publishing companies; (2) preventing Defendants from exploiting the dictionaries in Asia; and (3) requiring Defendants to turn over databases for the dictionaries to Plaintiffs.

  Plaintiffs move for partial summary judgment on their first cause of action, that is, that Defendants breached the 1997 agreement. Defendants move for summary judgement as to all claims.

 II. SUMMARY JUDGMENT STANDARD Page 4

  Federal Rule of Civil Procedure 56(c) provides that summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). Summary judgment should only be granted "if after discovery, the nonmoving party `has failed to make a sufficient showing on an essential element of its case with respect to which it has the burden of proof.'" Berger v. United States, 87 F.3d 60, 65 (2d Cir. 1996) (quoting Celotex Corp. v. Catrett 477 U.S. 317, 323 (1986)). When viewing the evidence, the Court must "assess the record in the light most favorable to the nonmovant, resolve all ambiguities and draw all reasonable inferences in its favor." Delaware & Hudson Ry. Co. v. Consolidated Rail Corp., 902 F.2d 174, 177 (2d Cir. 1990).

  An issue of fact is genuine when "a reasonable jury could return a verdict for the nonmoving party," and such contested facts are material to the outcome of the particular litigation if the substantive law at issue so renders them. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). "If, as to the issue on which summary judgment is sought, there is any evidence in the record from any source from which a reasonable inference could be drawn in favor of the nonmoving party, summary judgment is improper." Chambers v. TRM Copy Centers Corp., 43 F.3d 29, 37 (2d Cir. 1994). Only when it is apparent that no rational trier of fact "could find in favor of the nonmoving party ...


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